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EXO’s Baekhyun, Chen, Xiumin allege SM Entertainment is “unfairly” demanding 10 per cent of their earnings

EXO members Baekhyun, Chen and Xiumin – under their label INB100 – have alleged that SM Entertainment made “unfair” demands of their individual earnings outside of the company.

INB100 held a press conference today (June 10) to announce its intention to file a complaint against SM Entertainment for what it claims is an “unfair” demand of 10 per cent of earning of individual activities by EXO members Baekhyun, Chen and Xiumin – also known as EXO-CBX.

The press conference was held by INB100 CEO Kim Dong-jun and chairman Cha Ga-won, the latter of whom is also a co-founder INB100’s parent company. The label’s legal representative, Lee Jae-hak, was also in attendance to speak on behalf of the company and Baekhyun, Chen and Xiumin.

“Negotiations with SM Entertainment, made on behalf of CBX in the first half of last year, have broken down. We have been taking legal action, including the termination of CBX’s exclusive contract, since June [2023],” Lee told press, per Newsen. “Many citizens and fans will remember that afterward, both sides renegotiated and settled the situation with an official statement.”

INB100’s executives and legal counsel then claimed that despite past negotiations with SM Entertainment, the K-pop agency has “changed its position” and “defaulted on the 5.5 per cent album distribution fee it promised”. They also allege that SM are now “demanding 10 per cent of sales from artists’ personal activities”.

“We are claiming unfair action. Therefore, we are asking SM to stop demanding 10 per cent of sales from artists because SM went back on the terms of the agreement promised last year,” the INB100 executives said, adding that the rate at which CBX have been receiving their distributions has been “the core of the conflict with SM”.

“CBX believed in SM’s conditions when it guaranteed the [agreed-upon] distribution receipt rate,” they said, claiming that the rate the EXO trio agreed to was made verbally. “We have disclosed a recording of [SM Entertainment] COO Lee Seong-soo stating these conditions during the agreement,” their legal counsel said.

“After signing the agreement, the three people resolved all legal issues, including withdrawing the report to the Fair Trade Commission, believing that the terms of the agreement presented by SM would be fulfilled. They also each gave up a large deposit in the newly signed renewal contract,” INB100 continued.

INB100 and their legal counsel also alleged that there was a clause in the agreement stating that CBX are obligated to remunerate SM Entertainment 10 per cent in royalties from their solo activities, despite both parties both agreeing to 5.5 per cent in a previous agreement.

“We are not obligated to pay SM the 10 per cent of sales mentioned here because CBX established their own label and independently raised sales under their own name,” INB100 added.

INB100 and its legal counsel rounded off by reiterating their stance from contract negotiations with SM Entertainment last year: “CBX would like to review the settlement data relating to their existing contract [with SM]. We ask that SM provide the required information immediately. If the above requirements are not fulfilled, CBX and INB100 will pursue legal action.”

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