From left are Baekhyun, Xiumin and Chen of K-pop boy group EXO. Courtesy of INB100

A conflict between the three members of the K-pop boy band EXO — Chen, Baekhyun, and Xiumin — and their agency, SM Entertainment, has resurfaced, with both sides accusing each other of demanding rights without fulfilling their respective duties.

During a press conference at The Shilla hotel in central Seoul, Monday, attorney Lee Jae-hak of the law firm Lin, representing the three EXO members, asserted that SM Entertainment is unfairly demanding a share of the trio's sales without honoring its promise regarding music distribution fees.

"Our artists and SM signed an agreement on June 18, 2023, which stated that the singers should give SM 10 percent of the sales made from their individual activities," he said. "However, it was only based on the condition that SM would help them pay lower-than-normal distribution fees to the local music distributor Kakao Entertainment, the largest shareholder of SM."

Although most K-pop singers and their agencies pay 15-20 percent in distribution fees, SM's then-CEO Lee Sung-soo made a verbal promise that the company would lower the fees to 5.5 percent, the attorney said.

"Our artists signed the agreement on the premise that SM would remain loyal to its promise," he noted. "But SM did not. Nevertheless, it is still asking them for royalties, although it hardly contributed to the sales made from the trio's individual activities. We sent a certification of contents addressing SM's injustice, but it has not been responding for over two months."

The legal representative added, "If SM was not willing to, or was not capable of lowering distribution fees but still made our artists sign an agreement and end a legal dispute, this can be seen as a case of fraud ... If the label continues to demand royalties, we will pursue further legal action."

From left are attorney Lee Jae-hak, p_Arc. Chairwoman Cha Ga-won and INB100 CEO Kim Dong-jun during a press conference at The Shilla hotel in central Seoul, Monday. Yonhap

In June 2023, the three EXO members — who formed the sub-unit EXO-CBX in 2016 — were entangled in a legal tussle with SM Entertainment over their exclusive contracts. The trio sought contract termination, citing a lack of transparency in financial settlements and excessively long contract durations. They also filed a complaint with the antitrust regulator, alleging unfair terms.

SM Entertainment denied there was any coercion in renewing the members' contracts, further claiming that the trio attempted to sign a double contract with a third party.

Although EXO-CBX and SM were at odds for a while, their dispute appeared to have ended amicably when they revealed a few weeks later that they decided to maintain their contractual relationships after engaging in a candid conversation.

"We are glad to announce that SM and the three artists have resolved our differences and reached a mutually amicable settlement," SM and EXO-CBX said in a joint statement at the time. "We will hold negotiations and make modifications to our contracts and further solidify our relationship."

SM added that it had a misunderstanding over the involvement of a third party and apologized to the people involved.

Currently, SM is in charge of EXO's group-based activities, while INB100 — a record label founded by Baekhyun earlier this year — handles the three members' solo careers. The latter also represents EXO-CBX.

K-pop boy band EXO / Courtesy of SM Entertainment

SM throws counterpunch

A few hours after the press conference, SM issued a statement to counter the claims made by the trio, insisting that they are the ones who reneged on the promise.

"The 10-percent share deal was agreed upon through mutual discussion," the label stressed. "But unexpectedly, INB100 became a subsidiary of ONE HUNDRED, which then sent a certification of contents seemingly indicating that it does not have to adhere to the terms of the agreement. This suggests that the three members only seek to enjoy the benefits of being part of EXO without fulfilling their responsibilities."

In May, INB100 joined the music production company ONE HUNDRED as a subsidiary. ONE HUNDRED, which has Big Planet Made (BPM Entertainment) and Million Market as its sub-labels, was established by rapper MC Mong and Cha Ga-won, the chairwoman of the construction company, p_Arc.

Regarding music distribution fees, SM said it would only support EXO-CBX in negotiations with Kakao.

"We have no authority to decide on the percentage of distribution fees," SM said in the statement. "EXO-CBX asked us to include this issue in our written agreement, but we told them that we were not a decision maker. So we deleted that part in the end."

It added, "When we realized that we would not be able to support them, we provided help in different ways ... They actually inked a contract with another distributor that has SM as a major shareholder and as a result, their distribution of music is proceeding smoothly. They have not suffered any particular losses."

SM also maintained that EXO-CBX has been attempting to find fault with the company by questioning its financial settlements. However, it emphasized that the core issue of the ongoing feud is "tampering."

"The nature of everything is MC Mong and Cha Ga-won's poaching of the artists from SM," it said. "They have approached several artists who are under contract with us. But we still allowed EXO-CBX to pursue their solo activities on their own for the sake of EXO and its fans. But as we learned today, EXO-CBX does not run its company independently. It has become a subsidiary of MC Mong and Cha's company and it is evident that there was tampering."

SM concluded by issuing a warning of potential legal action.

"We will hold EXO-CBX accountable through legal proceedings in court."