NewJeans Facing Over $400 Million USD Penalty for Contract Termination?

Recently, NewJeans conducted a live broadcast just one day prior to HYBE’s general shareholders’ meeting, where they demanded the return of Min Hee-jin, shared concerns regarding their future, and claimed to be facing mistreatment under HYBE.

The timing of the broadcast has sparked suspicions that NewJeans may be preparing to file for contract termination with HYBE, inspired by Min Hee-jin’s situation. This has led to the resurfacing of older articles regarding the conflict between Min Hee-jin and HYBE.

One particular article titled “Will NewJeans Follow Min Hee-jin? Expected Penalty of Hundreds of Billions of Won” is being widely discussed again.

The article explains that if NewJeans delays leaving ADOR, the penalty fee for contract termination will increase significantly. As ADOR’s revenue has been consistently rising since last year, delaying the termination of the contract results in a higher penalty, calculated as the “average monthly revenue in the two years preceding the contract termination.”

In 2022, ADOR’s revenue was just KRW 18.6 billion (approximately USD 13.9 million), but this figure soared to KRW 110.2 billion (around USD 82.2 million) in 2023, demonstrating a sixfold increase.

On the other hand, if the exclusive contract duration is less than 7 years, the associated penalty may decrease slightly but will still amount to billions of KRW.

Lawyer Seon Moon-jong, in an interview with the Korea Times, remarked, “If the members of NewJeans unilaterally terminate the contract without any fault on the part of the company, the penalty could reach KRW 600 billion (approximately USD 447 million) based on the standard contract.”

Source: KMIB