HYBE, South Korea’s leading entertainment company, has been in conflict with Min Hee-jin, the CEO of its subsidiary ADOR. This conflict exposes the group’s weak decision-making structure. HYBE, which owns several labels, had previously given full authority to label representatives to oversee original music activities.
However, HYBE initiated an audit on Apr. 22, alleging that executives such as Min Hee-jin, CEO of the girl group NewJeans’ agency ADOR, attempted to seize control of the company. In response, observers in business circles emphasize the necessity of establishing a control tower to optimize each label’s creative activities while effectively managing administrative functions.
According to the Korea Fair Trade Commission on Apr. 30, HYBE boasted 76 affiliates, including 11 labels, by the end of last year. Bang Si-hyuk, Chairman of HYBE, envisions HYBE as a platform company. Under this model, multiple unique labels operate beneath the platform without a distinct council where Chairman Bang, HYBE CEO Park Ji-won, and label representatives convene to address significant matters.
Historically, the ‘single-label’ system was dominated by figures like Lee Soo-man (SM), Park Jin-young (JYP), and Yang Hyun-seok (YG), with a single individual overseeing their respective artists. Consequently, releases were often perceived as stylistically similar, and the process of debuting new artists was protracted. In contrast, the multi-label approach enables concurrent activities, leading to quicker profit realization.
For instance, starting with TWS (Pledis) in January of this year, followed by Le Sserafim (Source Music, February-March), Tomorrow X Together (Big Hit Music, April), ILLIT (Belif Lab, March-April), and Boynextdoor (KOZ Entertainment, April), albums have been released consecutively, facilitated by the multi-label structure.
However, the issue arises from HYBE’s expansion into a sizable organization, where inadequate communication has fueled conflicts like the present one. When HYBE communicates a company-wide business strategy, labels perceive it as managerial interference. Conversely, labels regard HYBE and other labels as rivals rather than collaborators, leading to disputes like Min’s claim that “ILLIT copied the NewJeans concept.”
An HYBE representative said, “The multi-label system represents the most advanced structure adopted by major global music companies such as Universal Music Group (UMG) and Sony Music. It offers the advantages of diversifying artist portfolios and enabling multiple artists to operate independently and reliably.”
“However, ascending to excessive management and compensation demands from labels marked the onset of this situation, and we recognize the necessity of bolstering our governance structure, such as establishing a council, to prevent recurrences.”
Consequently, HYBE is contemplating enhancements to its governance structure. SK Group, the country’s second-largest conglomerate, boasts a well-established control tower among Korean conglomerates. With 186 affiliates, SK Group employs the SUPEX (Super Excellent Level) Council to coordinate synergies and mitigate risks between companies. This council assesses the circumstances of each affiliate and devises solutions during bi-monthly Supex meetings, exemplifying SK Group Chairman Chey Tae-won’s ‘separate but together’ philosophy.
