SM is guilty of interfering with JYJ’s promotional activities in Korean, according to a recent report from Palm News concerning an investigation by the Korean Fair Trade Commission (KFTC).
SM, JYJ’s former management agency, repeatedly violated a court decision by purposely interfering with JYJ’s ability to promote their music. Early in the dispute between JYJ and SM, the Court ruled that SM would be fined for each incident of documented interference.
In addition, the KFTC announced back in early 2010 that they had begun an investigation into SM over not just the allegations around JYJ, but would also be investigating a number of artists and their contractual obligations to SM.
The scrutiny was sparked by SM’s lousy treatment of their artists, and in particular, members of the group JYJ. JYJ put their careers on the line and spoke out about the unacceptable policies which were part of SM’s business practices.
Either because of their investigation or just prior to it, the KFTC ordered SM to revise the “unfair exclusive contracts that their celebrities and trainees have signed.” (6)
Back in March 2011, the KFTC raided SM’s offices in connection with the investigation looking for evidence pertinent to SM’s business practices.
According to reports, the major Korean press purposely covered up the raid by refusing to cover it at the time. It’s the public’s first time hearing about a raid of SM’s headquarters in connection to this case.
Some observers are asking why there was, for all intents and purposes, a media blackout of coverage for this event. Others are using this as proof that SM has some control over broadcasters, and thus, could easily intimidate producers and owners into blacklisting JYJ.
SM could be fined upwards of 100 Million Won and are ‘negotiating’ the amount of their fine with the KFTC for their underhanded business practices.
JYJ put their careers on the line and spoke out about the unacceptable policies which were part of SM’s business practices.
<> SM is in Serious Trouble <>
Among other things, the public finally realized SM made a habit of signing underaged performers to extended contracts and didn’t pay their artists for TV appearances.
SM also had incredibly lopsided profit splits as part of their contracts and had ironclad control over almost every facet of their artists’ professional and private lives, including how much sleep they would get.
Particular to JYJ, SM forged the 3 members’ (Jaejoong, Yoochun, Junsu) signatures on an ‘intent to perform’ document in China promising to perform at a concert (2).
The concert, of course, was canceled and SM tried to blame the 3 members for it. In response, the attorney for the 3 members demanded to see the document because they knew the members hadn’t signed it.
In the end, the person who forged their signatures made public a confession.
These incidences are just the tip of the iceberg apparently because the public subsequently found out SM may still owe thousands to the members for the sale of their Mirotic album (3).
Part of this nonsense includes the repeated cancellations and blocks against JYJ on nearly all TV shows in Korea and Japan. This sorry state is best encapsulated by the run-ins JYJ have had with broadcasting company KBS (4).
One highlight/lowlight is when KBS removed JYJ from performing at a planned event to promote Jeju Island for inclusion into the New 7 Wonders of the World…. and replaced them with SM artists.
The controversy around KBS’s decision caused such embarrassment to Jeju Island, and set international fans ablaze with anger, that Jeju officials issued an apology to members of JYJ and their fans (7). A large number of international fans voted for Jeju Island because of their support for JYJ.
In addition, KBS claimed they would consider allowing the trio to perform on one of their music programs once they released an album. So JYJ released an album and…… of course KBS refused to allow them to promote it citing the lawsuit between JYJ and SM as the reason.
<> KEPA and KFCAI Part of the Investigation <>
Also coming under fire are two groups: KFCAI and KEPA. The Palm News report showed letters sent out by these organizations allegedly designed to interfere with decisions made by producers and networks about whether or not to allow JYJ on their programs.
If you remember, KEPA (Korean Entertainment Producer’s Association) bigfooted its way into this controversy by releasing a statement expressing negative concern about the effect a ‘JYJ vs SM’ lawsuit would have on the entertainment industry (5).
KEPA apparently lied about JYJ, accusing them of only suing for “personal monetary profit”. KEPA also denied the existence of “slave contracts” and claimed that other artists would try to “take advantage” of their management companies by suing.
Another obscure group calling itself the Korean Federation of Pop Culture and Art Industry (KFPCAI) also sent out letters apparently meant to intimidate people from getting involved with JYJ.
The KFPCAI claimed JYJ would “harm” the effect of Korea’s famed hallyu wave. They falsely accused JYJ of being under a dual contract. This was such an issue that a member of the Korean Parliament publicly asked for the KFTC to investigate this issue as well (8).
Member Park Sunsook called for an investigation after KFPCAI demanded JYJ be banned from appearing on various shows and programs.
He’s the one who asked for an industrywide adoption of a “Model Exclusive Contract”, which is a draft contract for members of the entertainment industry to use as part of their contracting practices. This draft contract would be a legally binding agreement designed to ensure fairness between artists and their agencies.
<> What now? <>
The investigation made by the KFTC is reportedly finished but must pass the “review board” before the decision is released to the public.
According to Lee Tae Hwi (FTC head), a statement containing the findings will be released as soon as the results are finalized.
As of this writing, a final decision is yet to be made by the courts regarding the main lawsuit between JYJ and SM.