Will NewJeans Successfully Create a Family-Owned Company? Insights on Why It May Fail

On December 13, exciting rumors circulated about NewJeans exploring the creation of a family-owned management company. This news sparked conversations among fans and industry observers alike.

However, the potential for establishing such a venture is met with significant concerns. Issues such as high penalty lawsuits, trademark risks, and the looming risk of losing popularity cast doubts on their ability to attract investors. Furthermore, the uncertainty surrounding NewJeans’ exclusive contract with ADOR leaves little interest from other agencies eager to sign the group.

An insider from the industry shared insights with the media outlet TenAsia, indicating, “There is widespread talk that NewJeans members and their families are contemplating the formation of a family-funded management company. Following their contract termination notice to ADOR, they require both material and human resources to manage new schedules, hence considering a family-owned company as a quick fix.”

Despite these discussions, experts in the entertainment and legal sectors remain skeptical regarding the feasibility of this plan. Notably, NewJeans’ assertion of contract termination is a unilateral claim, and legally, their exclusive contract with ADOR is still in effect.

The stipulations within their exclusive contract explicitly state that any independent entertainment engagements by members—or through third parties—would be considered a breach. This encompasses activities carried out through external agencies, including ventures initiated by family-owned entities formed by the artists or their relatives.

As outlined in the clauses of the Ministry of Culture’s standard exclusive contract (Articles 2, 6, and 14), every aspect of an artist’s career must be managed through their assigned agency. This means artists cannot negotiate appearances or provide entertainment services independently without the agency’s consent. Engaging in similar agreements with outside parties—particularly those that could undermine the agency’s interests—remains strictly prohibited.

Moreover, establishing a personal or family-operated agency, undertaking solo entertainment roles, or acting independently all violate the terms of the exclusive contract. Typically, the management rights encompass global activities unless there are explicit exceptions. Any third-party entities that knowingly contribute to such breaches may also face civil and criminal repercussions.

A legal expert weighed in, stating, “An exclusive contract mandates that artists engage in all activities solely through their agency. Allowing artists to operate independently could lead to leveraging the agency’s investment for personal gain while monopolizing the profits. This is why poaching—that is, attracting artists to external influences—raises significant concerns.”

NewJeans is currently under considerable scrutiny from the Korea Music Content Association, which has threatened to exclude the group from Circle Chart updates and withhold related data from Korean music shows and award ceremonies, as mentioned in a recent report.

In a press conference held on November 28, NewJeans made headlines with their announcement regarding the termination of their contract with ADOR, citing a breakdown of trust stemming from managerial changes and differing artistic directions.

They have firmly rejected the notion of incurring significant penalties, asserting, “We have not breached the contract; thus, all responsibility must rest with ADOR and HYBE.” Additionally, they have expressed a wish to retain the use of their group name and a desire to collaborate with CEO Min Hee-jin in the future.

Meanwhile, accusations of misconduct have emerged against Min Hee-jin, with allegations that she used NewJeans as a means to further her personal interests, particularly during her emergency press conference. Reports have surfaced suggesting that she orchestrated the group’s public appearances, including live broadcasts and Hanni’s involvement in a government hearing, to bolster her position as ADOR’s CEO. These allegations are substantiated by photos and evidence suggesting prior meetings with external companies concerning investment talks.

Although Min Hee-jin has not addressed the specific claims made against her, she has confirmed that she has initiated legal action. Critics argue that, given the ongoing allegations of interference within HYBE and Min Hee-jin’s contentious history dating back to April, a comprehensive response and clarification are essential.

Source: Daum

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