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Girl group NewJeans split sinks South Korea’s biggest K-pop agency by $423 million

by admin November 29, 2024
November 29, 2024
Girl group NewJeans split sinks South Korea’s biggest K-pop agency by $423 million

South Korea’s largest K-pop agency, Hybe, suffered a dramatic $423 million loss in market capitalization on Friday after NewJeans, one of its most popular girl groups, announced it was terminating its contract with the sub-label ADOR.

The announcement, made during a press conference on Thursday night, followed months of escalating disputes between NewJeans and the label. The decision sent shockwaves through the K-pop industry and caused Hybe shares to plunge by nearly 7%.

The five-member group, which debuted in 2022, accused ADOR of breaching their contract and fostering a toxic work environment.

At the press conference, group member Hanni detailed the group’s grievances.

“Staying here would be a waste of time and would only bring pain, mentally,” she said.

The group collectively decided there was no professional benefit to remaining under ADOR’s management.

The controversy reportedly began with a legal notice sent by NewJeans to Hybe earlier this month, demanding the reinstatement of former ADOR CEO Min Hee-jin and action against alleged mistreatment.

Failure to meet these demands, the group warned, would result in their departure. South Korean media outlet JoongAng Ilbo further reported that an internal Hybe memo suggested “getting rid of NewJeans and starting anew,” fueling tensions between the agency and the group.

Workplace harassment at ADOR?

Hanni also revealed instances of alleged mistreatment during her testimony before South Korea’s parliament in October, claiming she had faced workplace harassment at ADOR.

She highlighted what she called “countless preventions and contradictions, deliberate miscommunication, and manipulation” within the label.

These claims, though not elaborated upon in detail, added to the group’s decision to leave.

The fallout extends beyond the group. Former ADOR CEO Min Hee-jin, who was accused by Hybe of attempting to take the sub-label independent earlier this year, stepped down from her role in August.

Although she remained a director at ADOR, Min resigned from the company entirely on November 20.

She had previously denounced Hybe’s management, accusing the agency of copying NewJeans’ concepts for another group under a different subsidiary.

Significant blow to Hybe

The loss of NewJeans is a significant blow to Hybe, given the group’s meteoric rise in the K-pop scene.

Since their debut, the group has won numerous accolades, including the Group of the Year award at Billboard’s Women in Music ceremony in 2024.

Billboard cited their success across 10 of its charts, including the Billboard Hot 100, Billboard 200, and Billboard Global 200.

Hybe’s struggles aren’t limited to this controversy.

The agency’s third-quarter net profit for 2024 plunged nearly 99% year-on-year, with analysts attributing the decline to fewer artist activities during the Olympics and the high costs associated with launching KATSEYE, a localized group in the US Hybe’s stock has already lost 15.72% this year, mirroring a broader downtrend in the K-pop sector, which has seen all of the “Big Four” agencies facing declining valuations.

As Hybe navigates this crisis, industry experts are closely watching how it manages the fallout and its potential long-term impact on the company’s reputation and financial health.

The departure of NewJeans underscores the growing challenges of retaining top talent in the competitive and often contentious K-pop landscape.

The post Girl group NewJeans split sinks South Korea’s biggest K-pop agency by $423 million appeared first on Invezz

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