Posted on February 26, 2011 by dctvxqgall
Part V. Wrapping up the series -Understanding the 625 meeting
On February 17, 2011 Seoul Central District Court in Korea has dismissed SM Entertainment (SME)’s objection to the injunctive relief that allows the individual activities of JYJ. This court judgment explained why the contract between SME and JYJ is unfair in great details and not in its usual abstract way so that even common people can easily understand.
The Korean Court demonstrated and rebutted firsthand the claims of SME, its followers, and the malicious rumor spreaders (including HoTels) that the contents of contracts are fair and that JYJ should abide by the 13-year contract. This judgment virtually proves the point that the three members’ family wanted to make on the members’ behalf at the 625 meeting, that one of the reasons why the three filed the lawsuit to leave SME is “unfair conditions and clauses of the contract.”
Also, regarding the HoTels’ attack on the three members’ financial investment on the cosmetic company claiming that the three members left SM because of the cosmetic business, another court judgment proves that the three members’ decision to leave SM, in fact, was not to pursue a career in the cosmetic business. In 2010, Company C sued SME and its CEO, Kim Young Min, for defamation but lost and was counter-sued by SME. At the news of the counter-suit, HoTels and some haters of TVXQ bashed JYJ for their association with the C company, arguing that “Indeed, C company is a problematic one. Therefore, three members and their families who invested the company must be also problematic.”
However, in December 2010, SM’s counter-suit case against Cosmetic Company C was fully dismissed by the court on all three accounts:
1) False accusations => dismissed because there is no ground for charging the cosmetic company for making false accusations.
2) Defamation => dismissed because the evidence that proves that the three members were deeply involved in the business other than making a financial investment is lacking, and the cosmetic company’s media interview is merely a clarification on the three members’ participation in the investment of the business.
3) Obstruction of business => dismissed because the evidence that the CEO of Cosmetic Company C directly violated the trademark rights and portraits rights of the three members is lacking, and his use of these rights cannot be connected back to the causation of obstruction of business.
(Note: http://blog.naver.com/dctvxqgall, http://www.tvreport.co.kr/?c=news&m=newsview&idx=94470, http://www.maxmovie.com/movie_info/ent_news_view.asp?mi_id=MI0091784717&contain=&keyword=, http://news.jkn.co.kr/article/news/20110218/5508739.htm).
The direct parties interested in this case are President of SME, Kim Young-min, and CEO of Cosmetic Company C, Kang Seok Won. However, the court’s ruling concluded that the three members’ investment in the cosmetics company was a simple financial one, not a significant investment as a huge stockholder contrary to SM and the HoTels’ accusations. This means that the court reconfirmed the investment decision of three members in the cosmetics company can be legally interpreted as a mere sideline business investment.
In fact, celebrities in Korea, such as singers, actors, comedians, entertainers, and etc., often have a sideline job t in order to make the most of their short and limited lifespan of celebrity status. Anyone, including the celebrities, can make financial investments, since it is just another means of survival. As we all know, profession of an artist or a celebrity is a financially unstable one. When the celebrities make it big, they might lead a life free from financial concerns, but after their golden days, some easily go bankrupt.
(Note: http://www.etoday.co.kr/news/section/newsview.php?TM=news&SM=5102&idxno=375383, http://www.asiatoday.co.kr/news/view.asp?seq=307786)
Now, it actually took 4-5 years for TVXQ to reach the top in the business. Even though they were at the top and popular enough to be called the Star of Asia, the profit settlement that TVXQ received from SME barely met their expenses. Eventually, these circumstances must have them anxious for their future – and like other celebrities, three members and their family considered sideline jobs and financial investments.
Then, why must they be criticized for their investments? Have three members of TVXQ ever refused to carry out SM and AVEX’s schedule demands in the first half of 2009 after they invested in the cosmetics business? Why should the three be bashed for their participation in a sideline business any more than other celebrities who also juggle their entertainment activities and sideline business?
1. 625 meeting was a meeting to explain the truth to their fans about the rumors of Jaejoong, Yuchun, and Junsu.
Those who spread malicious rumors (HoTel fans) claimed that the purpose of 25 June 2009 meeting was to ask fans to spread rumors about other two members, Yunho and Changmin.
Let us be clear.
The purpose of the 625 meeting is to explain the truth about their sons and brother, who suffers from malicious rumors, and to resolve the misunderstandings about them. In addition, they wanted to explain the purpose and background of lawsuit properly:
1) To let the fans know that the contract between SME and three members are unfair because of the circumstance that the former is an absolute superior, while the latter, a subordinate, had to passively sign the contract presented by the former,
2) To reveal to the fans that the three had actively asked SM to improve their conditions throughout their activities in the hopes to grow into more mature artists, but SM only answered with silence and evasion and in addition forced TVXQ to follow SM’s order without betterment of working conditions.
Again, the purpose of 625 meeting was to explain the truth about the rumors of Jaejoong, Yuchun, and Junsu, not to spread rumors about other two members, Yunho and Changmin.
‘Currently true and false information are mixed, so please judge wisely.’ ‘We want a five-member TVXQ together and stay as one,’ ‘It is not true that Junsu, Yuchun and Jaejoong are leaving SM because of the cosmetic business or just because of money,’ ‘Investment for Cosmetic Company was preceded after SME’s permission,’ ‘They requested fans to explain the three members’ stance because of rapid spreading rumors,’ It would affect the teenage fans during their exam term and the administrators would have difficulties dealing with it too if the three’s lawsuit or explanation of rumors were announced on fan sites. How about using personal blogs or other ways?’
None of conversations in 625 meeting include three members disrespecting the two other members in any way.
Just the day before, three members’ judicial representative sent SM a certification of contents on June 24 2009 that included the backgrounds and the purpose of the lawsuit, not that the three are withdrawing from TVXQ. HoTels’ arguments that the lawsuit against SM on the invalidity of contract means leaving TVXQ have a logical fallacy of regarding TVXQ as a product, just like SM does. Do not forget the patent application of TVXQ’s trademark rights by SME has been rejected several occasions due to the symbolic meaning of TVXQ. Five members of TVXQ are still TVXQ “as a whole” or “in part”, until five members say “I’m done with TVXQ”.
Junsu, Yuchun, and Jaejoong, three members of TVXQ who we know, are not the type of people who will slanderer and push others around to stand out themselves. They never were and never will be. Five members of TVXQ, Junsu, Yuchun, Jaejoong, Yunho, and Changmin, who we have supported for the past seven years, won through the difficulties and were born again as artists from nothing, even though the management did not support them enough. We all know that they are brothers and family to one another, and maybe more.
2. SM needs to make reforms to be born again as a socially and ethically responsible entertainment company as required by the society.
SM Entertainment, founded in 1995 by Lee Su Man, is the first incorporated entertainment agency as well as the first entertainment company listed on KOSDAQ stock market in April 2000. Revenues earned from the huge success of H.O.T in 1996, one of the influential first generation idol stars in Korea that also caused sensation in China, Southeast Asia, have set the foundation for SM Entertainment’s IPO (Initial Public Offering).
However, as the poor treatment and terrible working conditions of H.O.T. compared to the revenues they were making for SME was made public by the press when H.O.T disbanded (Moon Hee Jun, and Kang Ta stayed with SME while JTL-Jang Woo Hyuk, Lee Jae Won and Tony- left), the awful working conditions of artists under management was revealed to be prevalent not only in SME, but in other Korean entertainment companies as well.
(Note: http://news.naver.com/main/read.nhn? mode = LSD & mid = sec & sid1 = 106 & oid = 038 & aid = 0000054226)
Even after that, SME has continually had conflicts with its artists, such as SES, Shinhwa, Fly To The Sky, The Grace (Chonsangjihi) with respect to their contracts.
In addition, Kim Ji Hoon (actor), No Min Woo (a former TRAX member), and Hankyung (a former Super Junior member) have sued SME for the unfair contract and prevailed.
SME have been ordered to correct its unfair contacts by the Korean Fair Trade Commission (KFTC) since 2002, right after the disbandment of H.O.T. and exposure of their contracts to the public. Unashamedly SM filed litigation for revocation of KFTC’s corrective order in April, 2004. The Seoul High Court ruled against SME and confirmed that the excessive penalty for the breach of contract clause in SME’s contract is indeed unfair.
mode = LSD & mid = sec & sid1 = 106 & oid = 016 & aid = 0000131503)
According to the decision, the penalty for the breach of contract, which include the contract deposit, the total investment, and the expected damages for the remaining of contract duration, are 3-5 times higher than the industry average (usually 1~2 times of the loss amount) in plaintiff’s exclusive contracts. Even if the original intention of the provision is for preventing free riding to the competing agency, this immense penalty for the breach of contract provision is excessive for it imposes too much restriction on individual freedom. Long before this lawsuit by JYJ, the term “slave contract” was coined because of such provisions that block artists from breaking contractual relationship as well as from claiming one’s rights on his/her creative productions.
Even after its defeat in 2004, SME preserved this problematic clause in contracts without revision. In 2007, SME (CEO Kim Young-min) lost another unfair contract lawsuit filed by actor Kim Ji Hoon which revealed that SME still used the same “slave” contract. (Reference: http://www.newsen.com/news_view.php?uid=200709131535541001). At that time, the artist also called to question SM’s lack of support for the artist as an exclusive agency. However, SME used the media to make “Betrayal after fame” excuse.
Anyway, SME already was aware that its contractual relationship with TVXQ is unfair since KFTC’s corrective order was issued in 2002 and TVXQ’s official debut was December 2003. Therefore, there is no legal justification for SME’s imposition on TVXQ to fulfill the contract altogether.
SME was not willing or trying to improve the conditions of Junsu, Yuchun, and Jaejoong’s entertainment activities so that TVXQ will be continued. If SME had known the importance of TVXQ as a 5-member group or was willing to maintain TVXQ regardless of the lawsuit, SME would have modified the contract before or even during the dispute or contemplate on other ways to continue TVXQ’s activities after the lawsuit even if the three are no longer under SM’s management. Unfortunately, SM chose to adhere to its usual strategies like it had done to its former artists – dissolving the group itself in five to seven year cycles, and/or proposing renewal with only some members of one idol group.
(Note: http://news.kukinews.com/article/view.asp?page=1&gCode=ent&arcid=0002456916&cp=nv, http://www.asiatoday.co.kr/news/view.asp?seq=273846, http://www.mydaily.co.kr/news/read.html?newsid=200803270132291117&ext=na)
In spite of this, SME repeatedly claimed that “we are trying to negotiate but three members will not comply to our request,” during hearings of the civil trial, and even attempted to intimidate the members in feigned suggestion of conciliation saying only verbally that “We will negotiate,” and “Come back first then we will revise the contract, “while it made no efforts to correct the fundamental problem. On November 2, 2009, SME called for a press conference, where it criticized three members’ lawsuit against SM as a “hoax against the general public, ” and demonstrated its will to expel the three members from the Korean entertainment industry using Yunho, Changmin, and their parents.
And those who spread malicious rumors in pace with SME and continuously call the three members traitors disloyal to other TVXQ members as well as SME, as if the three members’ assertions of their rights against SM is same as showing hostility against the two members who stayed with SM.
Assume that you’re the one whose freedom was restricted, activities were blocked, and names and images were defamed.
This is an issue of trust before loyalty. Can you go back to the company you no longer trust no matter what they promise?
SME claims that it treated TVXQ as the best in the business. But, it is a known fact that its contractual conditions are worst in the industry.
Since 2002, SME repeatedly have received warnings and corrective orders for its contracts from KFTC. Finally, on 23 December 2010, SME promotes that it has reformed, that it “voluntarily corrected the following clauses of the contracts: 1) the exclusive contract duration with its artists and trainees, 2) the standard of penalty estimation for breach and 3) unilateral decisions on schedules of artists.” However, the correction is too superficial that it is impossible to monitor its implementations properly. Still, this action is significant because SME’s correction abiding the KFTC order shows that SME conceded to the fact that 13-year contract duration of TVXQ is indeed unfair.
Even though the media mistakenly labels SME as the pioneer of Hanryu (Korean Wave) when in truth it has just jumped on the bandwagon at the right time, it also led to more imbalanced Korean music industry. Also, the public remembers well that SME was under the spotlight for various legal conflicts involved with its exclusive contracts with HOT, Shinhwa, Fly to the Sky, SES, others over 10 years. Moreover, assessment that SM is the culprit of making a negative image about idol stars, its numerous scandals including the founder of SME Lee Su Man’s tax evasion charges only add to its negative business image to the public.
Therefore, based on SME’s history, it could be said that the three members of TVXQ working again with SME is basically impossible unless SME is converted into Yuhan Kimberly or Microsoft, a fine example of companies that demonstrate corporate social responsibility.
SME is a listed company on the stock market and its president Lee Su Man is the richest entertainment mogul in Korea whose estimated holding is over KRW100 billion stocks.
And who contributed to skyrocketing SME stock from KRW500 to a whopping KRW 20,000? Undoubtedly, it is SME’s artists.
News that SME’s artists was at the forefront of Korean Wave made the stock price go up, and as a result, the president and executives of SME became rich. President Lee Su Man is already rich due to his SME stock, but he also gets paid the salary and profits from the successes of SME artists’ hard works. In the end, the profits of SME shareholders rely heavily on the success and hard works of SME artists. If so, SM’s board of directors’ wealth can be accumulated only when SME artists are successful.
However, the life span of a celebrity, especially idol stars, who can make money for the entertainment company, is very limited. Above all, many experts pointed out SME’s most harmful influence on the entertainment and music industry is bringing the idol-focused music market and the short shelf life of artists. Since the artists became a commodity, the management companies started to focus more on their display and issues rather than on their talents and practice. The life-span of idols became shorter and shorter, and easily replaced. This distortion results in lower quality of music industry and the faster burning-out of talents in musicians after in his/her later teens and mid-twenties. The spotlighted Idols are easily forgotten and some fall into the abyss plagued by the disillusionment. However, the entertainment companies and Korean society evade this problem under the name of competition and ignore it under the name of social selection as an individual.
So then, why wouldn’t SME’s board of directors invest their revenue and profits back to their own company like a reasonable company would? If even small portion of huge profits they receive is invested back to their artists and trainee, the artists can build up their skills a little more leisurely, and be truly loyal to the company.
Why does SME want to cross-subsidize the expenses of failed idol stars from the profit of the successful one, without making any investment of its own at all? If a trainee requires a staggering amount of investment as SME argued, how come the leader of TVXQ, Jeong Yunho, confessed about being a homeless when he was a SME trainee on a national TV?
CEO with right leadership should care for not only in his profits, but also for the employee’s welfare and interests which is a long-term investment. In addition, SME’s artists as well as its employees are famous for being underpaid and working under poor conditions.
The society categorizes Lee Su Man as a successful business man, but not a respectful, or good business man. Why is that?
3. How did we come to this? – TVXQ Act II, fans, and the haters
For the past 1.5 years, the question fans who support Junsu, Yuchun and Jaejoong got the most was “why did you not fight back when the HoTels and haters attacked you and the three members?” The biggest reason why we kept silent, bigger reason than our complacent belief that ‘the truth will prevail,’ was because it was JYJ’s wish and volition to keep the fans from getting hurt by getting caught up this dirty fight. In addition, it was the fans’ sincere wish to see the five-member TVXQ resume its activities as one, and the fans truly believed that it was SM who the three members and the fans were fighting against and that the two members are with Junsu, Yuchun and Jaejoong in heart although they were split in their decisions 3 to 2. That is the reason why the fans withstood the rumor spreaders and TVXQ haters’ attacks on the three members and the fans using SM’s twisted logic. Meanwhile, the three members have criticized SM for its wrongdoings, but have never slandered the two.
What made the fans abandon their genuine heart was Yunho and Changmin’s releasing of TVXQ’s 5th album as a duo with SM fully supporting its promotion unlike it has ever done before. Old TVXQ Act I fans and JYJ fans who recently had joined them in their long wait doubted that the two will actually betray their expectations just like that. But the fans who had kept their patience for a long time were outraged by series of comments they made (i.e. “TVXQ’s legitimacy can only be carried on under SME,” referring to themselves as TVXQ Act II, and their “thanks to” message in the album) and its aftereffects (Junsu’s response to the two’s remarks via twitter and SM artists’ group attack on Junsu that soon followed).
Furthermore, Yunho and Changmin’s comments about the three members – “I’ll give them a hug when they come back after I give them a light tap on their forehead,” “wild goose that left the flock,” and other comments devaluing TVXQ Act I’s efforts and accomplishments – in the media interviews that followed pushed all-fans who had kept their faith in TVXQ to desert the fandom. In the midst of this chaos, people spreading malicious rumors, who we call HoTels now, continued their attacks and repeated the same nonsense about the cosmetics, money, betrayals, and “awakening” to not only fans in Korea but in Japan, China, America and more.
The 625 meeting is what started everything, the HoTels and TVXQ haters say in unison. For that reason, we went back in time to June 25, 2009 by looking at the recording to find out what happened. We have posted the full transcription of that recording.
It is pathetic to say, but we have to admit that it is the fans that started the fight and that want to end it.
People who attended that meeting as representatives of their fan sites had only one mission: to indirectly inform the fans who couldn’t be present at the meeting about the situation. Whether passing on such information indirectly was a good idea or not, the responsibility for providing that information still falls on the fan that spread the information.
We do not believe that all of Yunho and Changmin’s fans are like HoTels, but have you done your part as someone who once loved TVXQ Act I? How is what HoTels are doing now different from what TVXQ haters, who were like our common enemy back when this problem didn’t stand between us, had done? Do you truly support TVXQ Act II as a fan? Are you not confusing your attacks on Junsu, Yuchun and Jaejoong with your support for TVXQ Act II?
Again, the decision is up to us. As we speak, Korean society is watching Junsu, Yuchun, Jaejoong and their fans pioneering ways to break this vicious cycle of unfair practices in the entertainment business.
We cannot just stand and watch the wicked ways of SM and HoTels anymore. We are here because of JYJ and TVXQ Act I.
Junsu, Yuchun and Jaejoong said that it was only their faith in the fans and not anything else that gave them the courage to leave SME. We are the only shield that can protect the three.
The present is important for the future, and for us to build a solid foundation today, we need to grasp what happened in the past and how that was distorted.
We hope that this series of posts helped you to face up the reality and make your decision on who you would like to be as a fan, as someone who support and love Junsu, Yuchun, Jaejoong and TVXQ Act I.