SM Entertainment sues EXO-CBX over contract disputes
What's the story
SM Entertainment, a leading South Korean entertainment agency, has initiated legal proceedings against K-pop group EXO's members Chen, Baekhyun, and Xiumin, collectively known as EXO-CBX. The lawsuit was filed on Wednesday (KST) at the Seoul Eastern District Court. A representative of SM Entertainment confirmed the lawsuit to media portals on Thursday, stating, "It's true that a lawsuit has been filed against CBX. The matter will be dealt with according to the law."
Contract dispute
EXO-CBX's contract renewal and termination request
EXO-CBX renewed their contracts with SM Entertainment in December 2022. However, by June 2023, they sought to terminate these contracts citing unfairness. This led to a month-long legal dispute that concluded with a settlement agreement. Under this agreement, the trio would continue group activities under SM Entertainment while pursuing individual promotions under an independent label, with 10% of all sales from the new label going to SM Entertainment.
Payment dispute
INB100 claimed unfairness over contractual payments
In January 2024, Baekhyun established his agency, INB100, and listed Chen and Xiumin as the label's artists. Months later, on Monday, INB100 held a press conference claiming unfairness over the required 10% payment outlined in their settlement contract with SM Entertainment. They also accused SM Entertainment of not paying 5.5% of all earnings from album sales and streaming as per another clause in the contract. Despite sending a formal objection, SM Entertainment had apparently not responded for two months.
Counterclaim
SM Entertainment refuted INB100's claims
SM Entertainment has refuted INB100's claims, stating that the 10% of all sales by independent labels was a standard set by the court in a previous lawsuit against EXO's Chinese members. The entertainment agency emphasized that this is considered a reasonable payment based on precedents. They have expressed their intent to hold EXO-CBX accountable for denying the contract terms and have taken legal action to enforce this.