June 10 – The controversy erupted when INB100, representing EXO-CBX members Baekhyun, Chen, and Xiumin, stated during an emergency press conference at the Shilla Hotel that it would not pay the 10% royalties for personal activities to SM Entertainment, the former agency of CBX. [Click here for the full press conference].
SM Entertainment’s Position
SM Entertainment clarified in an official statement that the exclusive contract with CBX remains valid. The agreement permits CBX to engage in individual activities through private corporations, provided they pay 10% of the sales from these activities to SM. The agency noted that CBX has been conducting individual activities freely under this arrangement since its inception.
The policy, SM explained, aligns with a precedent set by court arbitration involving EXO’s Chinese members, who previously had disputes over exclusive contracts. According to SM, this standard was designed to ensure fairness and consistency across its artist agreements.
SM accused INB100 of attempting to sidestep the agreement after being incorporated into One Hundred. SM claimed that INB100 sent a notice suggesting that the agency should not adhere to the agreed terms, allowing CBX to benefit from their rights as EXO members without fulfilling their contractual obligations.
SM addressing the issue of the 5.5% distribution commission rate claimed by INB100, SM stated that this rate was mentioned to support negotiations but was not within SM’s authority to determine. They explained that CBX had requested this rate as a condition of the agreement, but it was not included due to regulatory limitations. Consequently, SM permitted the release of Baekhyun’s solo album and covered the penalty for a canceled Japanese performance to mitigate the issue.
ISM Entertainment has vowed to take legal action against CBX. The company declared it would not tolerate CBX’s continued claims that the agreement is invalid and intends to hold the members accountable through the court system.
This unfolding drama between SM Entertainment and EXO-CBX underscores the complexities and potential conflicts inherent in managing exclusive contracts and royalty agreements within the entertainment industry. As the legal proceedings advance, the outcome could set significant precedents for future artist-agency relationships.
Article source 1 / source 2 image courtesy of INB100 / SM Entertainment
