EXO CBX unit members Baekhyun, Chen, and Xiumin have contract disagreements with SM Entertainment. The EXO stars have discussed taking legal action as their demands have been unmet.
For the unversed, EXO members Baekhyun, Chen, and Xiumin moved to label INB100 in January to promote their solo activities. The members decided to keep their group contract with SM Entertainment so as not to cause disbandment. Baekhyun established the new music label INB100, and his bandmates joined him in January 2024.
Six months after the new arrangement, the K-pop stars told the press that SM Entertainment was not fulfilling the initially agreed-upon demand. The lawyers of EXO CBX members revealed details that fans were unaware of.
EXO CBX vs SM Entertainment: Baekhyun, Chen & Xiumin likely to file criminal complaint against K-pop label
EXO CBX faced the press on June 10, 2024, to accuse SM Entertainment of not abiding by contract obligations. Their legal representative, Lee Jae Hak, alleged, “SM Entertainment is not fulfilling the 5.5 percent commission rate for albums and music guaranteed to INB100. The condition was a part of the settlement condition.”
The representative added, “They are engaging in unfair practices by demanding 10 percent of the artists’ revenue generated from individual album releases, concerts, and advertisements.”
Earlier, another INB100 representative explained the cause of concern and detailed the contract between the parties. The representative said, “Last year in June, EXO-CBX and SM released a joint statement. They announced that they resolved the legal dispute. The contradiction initially concerned the termination of exclusive contracts and filing a complaint with the Korea Fair Trade Commission (KFTC).”
The representative added, “At the time, the situation was resolved through negotiation because both sides believed in EXO. According to the agreement at the time, INB100 was established for the artists’ individual activities as well as activities under EXO-CBX.”
Per their latest contract, EXO CBX members agreed to pay SM Entertainment a 5.5% commission. However, the representative accused the music label of demanding more and said there was an alleged breach in the contract. So, the K-pop stars plan to cancel the agreement made on June 18, 2024. The cause of termination includes non-fulfillment of obligations. The EXO members are also considering filing a criminal complaint. They also wish to inform the Korea Fair Trade Commission of the agreement’s signing.
SM Entertainment responds to CBX’s allegations
Hours after the press conference of CBX members, SM also responded to the allegations. They stated that EXO CBX members are enjoying the ‘benefits’ of being in the K-pop supergroup without wanting to pay the due price, “In reality, after signing the agreement through mutual consent, CBX independently signed contracts for music and album distribution through their individual business and engaged in various individual activities such as concerts and starring in broadcasts.”
About the commission, the latter added, “Regarding this, the 10 percent payment of the individual business’s revenue is the standard implemented through court mediation during the exclusive contract dispute with EXO’s Chinese members. It is already being applied as a reasonable standard with precedent. The standard derived through court mediation was also applied to CBX’s case. We want to convey that these rates were mutually discussed and finalized during the agreement process.”
Recently, INB100 became a subsidiary of ONE HUNDRED, which also houses BPM Entertainment. Highlighting the complexities, SM noted, “INB100 has since been incorporated as a subsidiary of MC Mong and Cha Ga Won. The label has now sent us a certification of contents indicating that the agreement need not be upheld. This indicates they want to enjoy the rights and benefits as EXO members but not fulfill their obligations. CBX continues to ignore the legally valid contract repeatedly.”
The statement added, “After receiving INB100’s certification of contents, we considered that EXO members D.O., Chen, and Suho were actively engaged in their solo album releases, concerts, and projects, so we chose not to raise the issue to avoid disrupting their activities. We emphasize that despite all this, CBX is distorting our consideration.”
SM also denied parts of INB100’s claims. SM announced that INB100’s claim that they unfairly handled the distribution commission rate is not true. “[The rates] were mentioned to support CBX by helping them negotiate better terms with the distribution company during the dispute with CBX. From the beginning, we do not have the authority to determine the distribution commission rate of other distribution companies. In fact, during the agreement process, CBX asked to include the distribution commission rate as a condition. However, we deleted the relevant clause after explaining that it could not be included because we did not have the authority to decide. So, it was excluded from the final agreement.”
SM concluded with a warning for CBX members. The label said: “We will not tolerate CBX’s actions of repeatedly claiming that the exclusive contract is invalid. They are trying to justify their wrongdoings through the manipulation of public opinion. But we will calmly respond according to the law and principles and hold CBX accountable through the courts.”
EXO CBX is yet to respond to SM’s claims. Per their earlier statement, fans must wait until June 18 to see if CBX members cancel their contract with SM.
