Archive: Truth and Distortions around SM-JYJ Dispute Aug 4 2009

[| Reporters Song Eun Ju, Na Ji Yeon]
August 4, 2009

“[They] are angry with SM’s lies”

The fate of idol group Dong Bang Shin Ki is uncertain. The relationship between 3 members of Dong Bang Shin Ki (Micky Yoochun, Xiah Junsu, Youngwoong Jaejoong) and SM Entertainment has soured beyond repair. Although everyone is saying, ‘They must not disband’, if one closely examines the current situation the breakup has already happened. Even if they manage to avoid the worst-case scenario of a disbandment, their separation with SM is a given in the current mood.

On the third, insiders close to the three members of Dong Bang Shin Ki revealed that “they (Dong Bang Shin Ki) already attempted many times to negotiate with SM. However, neither side could come to an agreement” and so “the reason why it has reached the level of the courts is because they couldn’t find common ground.” At this stage, further dialogue is meaningless, according to these evaluations.

The insiders that we met are those closest to Dong Bang Shin Ki on the level of acquaintances. These are people who’ve known [the Dong Bang Shin Ki members] from before their debut and have gone through thick and thin with them. According to them, the position of Dong Bang Shin Ki is single-minded and simple. Alleviate the burdens of the unequal exclusive contract. However, instead of addressing this core issue, the dialogue between the two parties ran in parallels that never approached agreement. They (the three DBSK members) “requested that the length of the contract and the earnings distribution scheme be changed. Because anyone could see the terms were irrational,” and “they tried until they could to solve all problems through dialogue. However, they got the clear impression that SM was trying to avoid it. In the end, both sides only grated on the other’s nerves. Now, the three members are feeling greater anger at SM’s response.”

◆ “The truth behind 3 of SM’s distortions”

In truth, after this controversy broke out, SM issued two press statements on the 1st and 3rd, respectively. On the first day of the heated controversy, [SM said], “we will try our best to resolve this issue which was caused by a cosmetics business” as their official position, and the day that the terms of the contract became the focus of attention, they responded, “but we gave them 11 million USD in cash and foreign sports cars as gifts.”

On this, the insiders told us, “the core issue of this case is the unfair contract not cosmetics. And yet, SM is not even bothering to address the terms of this irrationally unfair contract but instead are manipulating the media to make it seem like the cosmetics business is the reason why this controversy arose,” in refuting [SM’s position].

Then, they focused on the 11 million USD cash amount. They said, “According to SM, [DBSK members] received 11 million USD over six years. But this amount is pre-tax profit. If we calculate the amount received after tax deductions and then divide among five, the amount they received over six years comes out to be barely 200,000 USD per person per year,” adding that “in the latter half of this year Dong Bang Shin Ki earned 250 million yen (33 million USD) in album sales. However, Dong Bang Shin Ki was working for 200,000 USD per year.”

To give an illustration, Dong Bang Shin Ki thus far has released 48 albums. Of those, the ones released only in Korea, including singles, sold 1,960,000 units. In Japan, they released 4 full-length albums as well as 27 singles, of which 8 sold 100,000 units and 1 sold 250,000 units. If one includes sales from Southeast Asia, the number of albums sold goes up to at least 4 million. [The insiders] pointed out the absurd methods of calculation. They said, “SM arbitrarily removed fees for back-dancers and even meals. It appears overhead costs were paid for using Dong Bang Shin Ki’s share [of earnings],” and added, “even in Japan, several local subsidiary companies were used so that Dong Bang Shin Ki’s earnings were further depleted. For example, Avex shared the earnings with SM Japan, and then again with SM Korea. In the complicated distribution structure, Dong Bang Shin Ki’s share could only shrink further.”

They also revealed that the company did indeed give foreign cars as gifts. They said, “After [DBSK] received an award at a music awards show, SM gave [DBSK] cars as gifts. However, the cars are ultimately the property of SM. Dong Bang Shin Ki does not own them,” clarifying the parameters of the gifts.

◆ “Currently the 3 are fed up and exhausted”

According to the insiders, the three members of Dong Bang Shin Ki are fed up with SM’s manipulation of the media. They no longer have any desire to talk to a company that takes the truth and distorts it; their hearts have been sufficiently scarred by disappointment of the company’s comportments.

The three “predicted that SM would use the media to a certain extent but not that it would fall to the level of distorting facts. The more it continues in this fashion, the more they find it unreasonable to continue working together. It would be preferable to eventually separate with SM and go a different road.”

Obviously a separation with SM does not necessarily signify the disbandment of Dong Bang Shin Ki. At the moment, the insiders are confident that there is no discord between the members. They are getting along well as a family, and they plan hereafter, under whatever circumstances, to continue activities together; on this point they all agree.

At the same time, an insider revealed, “In truth, in the beginning the five all moved with one mind, together. However, in the process of discussing with one another the other two started showing slight differences of opinion. Because of this, in the end only the three followed through on the decision to fight the company,” in spite of the fact that “all [five] of them agree that the terms of the contract are irrational. It’s just that their preferred methods of dealing with this were different.”

◆ “Even after separating with SM, we’ll continue with Dong Bang Shin Ki”

Right now, the resolve of Micky Yoochun, Xiah Junsu and Youngwoong Jaejoong is stronger than ever. According to the insiders, “they are showing a stronger resolve than even before they debuted. No matter what difficulty or animosity they meet, the three are absolutely determined to pull together and push through.”

They are also just as determined to reunite as five under the name Dong Bang Shin Ki. They said, “Even if the three end up permanently leaving their management company through this lawsuit, this just means they are parting ways with SM not that Dong Bang Shin Ki is disbanded,” and so “whether the other two follow them out on a later date or whether they each end up in different management companies, the [three members] want to continue working as five as the group Dong Bang Shin Ki.”

If that is case, can the three members who left use the name ‘Dong Bang Shin Ki’ for themselves? Upon investigating, we found out that ‘Dong Bang Shin Ki’ as a group name is not trademarked or patented. In 2004, SM submitted an application to have the name trademarked but was denied. To repeat, SM has no rights to the team name ‘Dong Bang Shin Ki’. According to Hwang Seong Pil, patent lawyer at the Office of Patent Law, “The term ‘Dong Bang’ signifies the East and so is not a unique enough term to merit an exclusive use [through trademark]. This is probably why the Patent Office rejected the application,” and “SM currently can’t claim an exclusive trademark. There is no problem with the five members using the name Dong Bang Shin Ki, regardless of SM’s position on the matter.”

At the present moment, what Dong Bang Shin Ki feels more than anything is apologetic toward their fans. It’s because they wanted to complete all their scheduled appearances as promised. The insiders revealed, “if they lose the lawsuit they might have to pay an incredibly high contract cancellation fee. However, they are finding it harder to handle the inevitable separation from their fans during the lawsuit,” communicating also their (the insiders’) regret with regards to this situation.

<Photographs = Reporter Lee Seung Hun, SM Entertainment, Singles>

Translated by: Jimmie of TheJYJFiles

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