(Photo courtesy of ADOR)

[Hanteo News = Reporter KIM YEONWOO] The exclusive contracts signed between NewJeans and ADOR have sparked debate over contractual practices in the K-POP industry after being disclosed by The New York Times (NYT). As questions emerged surrounding the protection of minors, appearance-related expenses, contractual penalties, and the use of artists' images and voices after contract termination, HYBE issued an official statement challenging the report's claims.

On November 5 (local time), The New York Times reported that it had obtained the exclusive contracts signed by the five NewJeans members with ADOR in 2022 and analyzed several key provisions. At the time, the members were between 14 and 17 years old.

The NYT pointed out that the contracts omitted protections for physical and mental health, education, sleep, and rest included in the government's standard exclusive contract. Meanwhile, they explicitly outlined restrictions concerning "insincere attitudes", "neglect of self-management", and "inappropriate romantic relationships".

The report also raised concerns about the members' training conditions and appearance-related expenses. Citing accounts from individuals familiar with the situation, the NYT reported that the members sometimes practiced until 2 AM during their trainee days without being guaranteed sufficient rest. It also noted that four of the five members had left school.

According to the report, the contracts required artists to cover a portion of beauty-related expenses, including cosmetic surgery and skincare treatments. The NYT also cited accounts alleging that some members had been encouraged to undergo appearance-related procedures.

The calculation of contractual penalties and the use of artists' rights after contract termination were additional points of contention.

Under the contracts, penalties were calculated by multiplying the average monthly revenue from months in which actual sales were generated by the remaining contract period. The NYT argued that excluding months without revenue could increase the financial burden on artists.

The report also raised questions about provisions allowing ADOR to continue using the members' names, likenesses, and voices after their contracts ended. Related concerns included AI voice cloning, chatbot creation, and continued sales of previously released music.
 


In response, HYBE released an official statement on November 6, disputing claims that the contracts lacked sufficient protections or that there had been problems with the signing process.

HYBE explained that its subsidiary labels sign standard youth supplementary agreements with trainees, as prescribed by the government. These agreements include protections for personal rights, sleep, education, and rest, and remain effective until the artists reach adulthood. The company added that NewJeans' exclusive contracts also contained fundamental human rights protections covering the relevant issues.

HYBE further emphasized that the contracts had been finalized following extensive discussions.

According to the company, the initial draft was shared on January 7, 2022. Over the approximately three months leading up to the contracts' signing in April, the parties exchanged questions and answers, communicated via email, and discussed revisions following reviews by attorneys representing the artists.

The company specifically mentioned that one member's mother had submitted suggestions regarding a contractual provision.

HYBE explained that the request concerned a clause requiring artists to immediately notify the company if an outside party attempted to engage in tampering, or improper interference with an existing contractual relationship.

According to HYBE, after receiving a detailed explanation, the mother expressed her gratitude and replied that she had no further objections.

However, the NYT reported that ADOR's vice president had sent an email suggesting that the parties reconsider entering into the contract altogether if they did not agree with the proposed terms.

Regarding the allocation of expenses, HYBE stated that one member's mother had requested a reduction in the costs borne by the artists. The company's legal team subsequently proposed several alternatives to ADOR.

HYBE claimed, however, that ADOR's vice president at the time rejected those proposals, resulting in the contracts being signed under the original terms.

On the calculation of contractual penalties, HYBE maintained that although the wording differed from the standard exclusive contract, the actual financial effect was identical.

The company explained that NewJeans began generating revenue immediately after debut, meaning that the only period without revenue was before the group's debut.

HYBE also stated that the penalties in the lawsuit involving DANIELLE had been calculated using the same formula as the standard contract. It added that the Seoul High Court had also found no issues with the relevant provision.

Addressing concerns that ADOR could continue using the members' faces and voices after their contracts ended, HYBE stated that such uses, including AI-generated content, would require each artist's individual consent.

The company further explained that a former agency's unauthorized use of intellectual property associated with an artist who had signed with another agency could potentially violate relevant laws.

HYBE also addressed other concerns raised in the report.

The company stated that CCTV cameras were installed only in shared spaces, such as practice rooms, and that it maintained a policy of respecting the wishes of artists and their parents regarding education.

It also maintained that provisions concerning defamation and inappropriate romantic relationships were intended to protect artists and had been agreed upon with parental consent.

Finally, HYBE emphasized that Min Hee-jin had been serving as ADOR's CEO when the contracts were signed.

According to HYBE, the contractual language had been negotiated among ADOR's vice president, who was appointed by Min, the members and their parents, and legal representatives for some of the members.

The company claimed that it had provided supporting documents to the NYT and requested that the article reflect these facts, but that its requests were not incorporated into the report.

HYBE explained that it had decided to issue its statement because exclusive contracts and litigation materials accessible only to the parties involved had been leaked to an overseas media outlet and were being used as a means of attacking the K-POP industry.

While the NYT critically examined contractual practices in the K-POP industry based on the disclosed provisions and expert assessments, HYBE has defended the legality and reasonableness of the agreements, citing separate protective arrangements and the extensive negotiations conducted before the contracts were signed.

With the two sides presenting conflicting accounts, attention is turning to whether the controversy will prompt renewed scrutiny of exclusive contract practices in the K-POP industry and the protections afforded to underage artists.

 yeonwoo38@hanteo.com