SM Entertainment announces that it will sue EXO-CBX members

We express deep regret at the content of today’s press conference held by INB100 [empresa responsável pelas atividades individuais dos idols] about Chen, Baekhyun and Xiumin (hereinafter referred to as EXO-CBX) and the way it was carried out, and we convey our position as follows:

MC Mong and Cha Ga Won denying tampering and claiming it is a relationship that is more than family

First, we want to clarify that the essence of this entire incident is MC Mong and Cha Ga Won’s unfair encouragement (tampering) towards our artists. A long time ago, MC Mong and Cha Ga Won approached several artists who have valid exclusive contracts with us. Subsequently, CBX began to criticize to invalidate the valid renewal contract they signed. Despite this, we patiently listened to their voices and ultimately accepted CBX’s request to conduct individual activities independently. In other words, although the exclusivity agreement between us and CBX is still valid, we allowed them to conduct solo activities through their individual businesses, with CBX personally signing the agreement to pay 10% of the revenue from their independent businesses. We made this agreement even if we were not required to change a valid contract because we did not think it would be fair to the other EXO members who are doing their best for EXO’s promotional activities, as well as the fans who support EXO if the group activities were interrupted due to the ongoing legal dispute with CBX.

However, as confirmed today, INB100’s CBX was not operated independently by CBX. INB100 has already been established as a subsidiary of MC Mong and Cha Ga Won. Although we had already suspected this, the information revealed at today’s press conference confirmed the tampering regarding CBX. When we signed the agreement with CBX last year, we even distributed an external message to protect EXO, saying that we would not raise the issue of tampering between MC Mong and Cha Ga Won regarding CBX. We are deeply saddened by today’s press conference. We hope that our genuine feelings for EXO will no longer be distorted.

CBX enjoys rights/benefits as EXO members but ignores promises/obligations

In reality, after signing the agreement by mutual consent, CBX independently signed contracts for distribution of songs and albums through its individual businesses and engaged in various individual activities such as concerts and broadcast appearances.

In this regard, the payment of 10 percent of individual business revenue is the standard that was actually implemented through court mediation during the exclusive contract dispute with EXO’s Chinese members, and is already being applied as a reasonable standard with precedent. The standard achieved through court mediation was also applied to the CBX case, and we want to convey that these fees were mutually discussed and finalized during the settlement process itself.

However, INB100 was incorporated as a subsidiary of MC Mong and Cha Ga Won and has now sent us a content certification indicating that the agreement does not need to be maintained. This indicates that they want to enjoy the rights and benefits as members of EXO, but do not fulfill their obligations. CBX continues to repeatedly ignore the legally binding contract.

After receiving content certification from INB100, we took into consideration that EXO DO members Chen and Suho were actively involved in the release of their solo albums, concerts and projects, so we chose not to raise the matter to avoid interrupting their activities . We emphasize that despite all this, CBX is distorting our consideration.

Distorting our multifaceted efforts to protect EXO despite financial losses

INB100’s claim about the distribution commission rate being treated unfairly by us is not true. [As tarifas] were mentioned to support CBX, helping them negotiate better terms with the distributor during the dispute with CBX. From the outset, we do not have the authority to determine the distribution commission rate of other distribution companies. In fact, during the settlement process, CBX requested the inclusion of the distribution commission rate as a condition of the settlement, but we deleted the relevant clause after explaining that it could not be included because we did not have the authority to decide, and therefore it was deleted of the final agreement.

Furthermore, when it became difficult to adjust the distribution commission rate as CBX wanted, despite our efforts, we made other accommodations for them (such as allowing Baekhyun’s solo album, which we had been preparing since early 2023, to be released under his own agency and covering the cancellation fee for Baekhyun’s unilateral cancellation of a Japanese show). Furthermore, CBX and INB100 have signed contracts on favorable terms with another distributor of which we are the majority shareholder and, consequently, their distribution of songs and albums is running smoothly, so they have not suffered any particular losses.

At today’s press conference, CBX’s legal representative, Attorney Lee, stated that CBX are ‘adults who can think for themselves and take responsibility for their own decisions, acting independently’. Despite this, we can no longer tolerate their repeated claims of invalidating the renewal contract they signed over a year and six months of negotiations between us and the large law firm they hired.

We will not tolerate CBX’s actions of repeatedly claiming that the exclusivity agreement and subsequent agreement are invalid in order to pursue its own interests. While they attempt to justify their mistakes by manipulating public opinion, we will respond calmly in accordance with the law and principles and hold CBX accountable through the courts.

Thanks”.