The Fallout of SM Entertainment's Leadership Shakeup

SM Entertainment CEO Reveals Internal Struggles with Founder Lee Soo-man, Plans for Future

In a recent press conference, SM Entertainment CEO, Alain, shared the company's internal struggles with founder Lee Soo-man and the company's plans for the future.

 

Alain explained that the company has been facing issues with Lee Soo-man's private overseas company, CTP, which has been pre-empting production royalties abroad. The company's previous production contract with Like Planning has also ended, leading to the need for reorganization and planning for future production centers.

 

However, Lee Soo-man has instructed the company to not announce any future production plans and expressed his intention to pursue private interests more openly. He has even gone as far as to request that the company make a statement to the media that the artist needs him and to sign direct contracts with his overseas subsidiary, CTP.

 

To make matters worse, it was revealed that SM Entertainment has been paying Lee Soo-man 6% of previously released album-related sales for 70 years and 3% of management sales for 3 years from 2023, which is estimated to be around 80 billion won.

 

In response to these issues, SM Entertainment has made the decision to break off its relationship with Lee Soo-man and run the company through an independent board of directors. The decision was made with the goal of improving corporate governance and protecting the interests of shareholders and the company.

 

Despite the challenges faced by the company, Alain emphasized the importance of building on the positive influence of K-pop and preparing for a brighter future. The company's independent board of directors aims to increase shareholder value for all shareholders, not just specific ones.

 

Fans of SM Entertainment and investors alike are eagerly waiting to see how the company will navigate these challenges and what its future holds.