EXO Chen, Baekhyun, Xiumin Dispute SM Entertainment Over Distribution

Almost exactly one year after Chen, Baekhyun and Xiumin of K-pop boy band EXO first pursued legal action against their longtime label and management agency, SM Entertainment, over contractual issues, a company established by the trio has now declared “full-on war” on the K-pop giant, according to Korean media reports.

Representatives for INB100, the newly established company Baekhyun founded in 2023 — which signed Chen and Xiumin for their respective solo careers, though all three remain contracted under SM for EXO’s group activities — held what has been described as an “emergency press conference” in central Seoul on Monday (June 10). Chen, Baekhyun and Xiumin were not in attendance. 

During the press conference, as reported by Korea JoongAng Daily, three reps for the trio — who also perform together in a splinter unit called EXO-CBX — said that Chen, Baekhyun and Xiumin have been in a monthlong dispute over fees and contracts with SM. Cha Ga-won, president and majority shareholder of INB100’s holding company, One Hundred, and one of the representatives to speak at the press conference, claimed a former SM CEO verbally promised in a recorded agreement to charge INB100 only a 5.5% fee for distributing its music releases through Kakao (the current majority shareholder of SM Entertainment), as opposed to the 15% to 20% percent typically charged to companies outside Kakao’s umbrella. But Cha says SM is now demanding a 10% royalty fee for the members’ use of the agency’s intellectual property (such as the members’ stage names, as well as EXO and EXO-CBX) in exchange for the discounted distribution fee.

“We declare a full-on war against SM Entertainment, which has made a promise that it could not keep and committed what could be perceived as fraud,” said Cha during the press conference, during which INB100 representatives also demanded that SM disclose the breakdown of EXO’s earnings — reigniting the same contract issues that were reportedly resolved last June. The representatives additionally claimed that INB100 sent a formal letter of complaint to SM Entertainment over two months ago concerning the fees and the earnings disclosure but had not received a response.

On Monday evening, SM Entertainment refuted the allegations in a press release. According to SM, an outside company imposed the 10% intellectual property fee following court mediation over past issues with previous EXO members who had exited the label while still under contract. (Between 2014-2105, three other EXO members left the group and broke their contracts with SM to focus on the China market.) SM also claims EXO-CBX’s contract is still valid, and that the trio benefits from the EXO brand but are not fulfilling their contractual obligations with SM despite the agency acting in good faith with a lower distribution rate.

SM’s statement also alleges that Chen, Baekhyun and Xiumin were “poached” by Cha and MC Mong — a one-time rapper-producer in Korea who fell out of public favor following allegations that he had dodged the country’s mandatory military draft, and who went on to launch agencies of his own, including BPM Entertainment, which now houses ex-SM artist Taemin of SHINee.

SM added that it did not previously respond to INB100’s letter of complaint to avoid distracting from new EPs released by EXO members Chen, D.O., and Suho over the past month. The company concluded its statement by saying that it will respond with legal action as opposed to trying to sway public opinion through press conferences.