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The rift between SM Entertainment and EXO members Chen, Baekhyun, and Xiumin deepens.

In a report by Newsis, industry sources revealed that Chen, Baekhyun, and Xiumin’s agency, INB 100, hadn’t paid SM Entertainment for using SM-related intellectual property, including that of EXO, from January to June 2024.

As reported, both sides drafted an agreement related to the trio’s individual activities in June 2023; SM allowed INB100 to use Intellectual Property in return for INB100 paying usage fees. However, differing opinions exist regarding a 5.5% distribution fee for albums and digital music AND 10% of the three members’ personal revenue. Now, both sides are clashing over the payment of IP usage fees.

Today, the three EXO members’ label, INB100, countered this issue: “The agreement allowed us to use IP but did not specify any payment terms. We haven’t received any request to pay IP usage fees, so their claim we haven’t paid is unreasonable.” They added, “At a press conference, we even proposed that we are willing to pay the IP usage fees, but SM has not responded to our stance and is using the media to claim we haven’t paid, which is regrettable.”

Earlier this week, the trio’s agency sent a notice to SM arguing that demanding 10% from their personal revenue is unfair as SM didn’t adhere to the 5.5% distribution fee for albums and digital music. A lawyer from the law firm Lin, representing EXO’s Chen, Baekhyun, and Xiumin, expressed the three’s position in an emergency press conference held at the Shilla Hotel In Jung-gu, Seoul, on June 10, 2024.

In June 2023, Chen, Baekhyun, and Xiumin claimed that SM’s long-term contracts and opaque settlements were unfair, and legal action was announced. During the process, tampering suspicions and external interference arose, immediately refuted by the EXO members and MC Mong. After 19 days of negotiation, the dispute was resolved following the contract termination notice.

ChenBaekXi promised to remain in EXO and returned as a full group in July. In January, the three officially started under their independent label, INB100. Founded by Chairman Cha Ga-Won and MC Mong, it effectively led the parent company of Big Planet Made Entertainment and Million Market.

Today, INB100 released a statement explaining that SM is demanding 10% of the artists’ personal activity revenue from INB100, disregarding the negotiated agreement terms. Despite sending a notice of unfairness, SM Entertainment did not respond for over two months.

SM Entertainment countered, “The agreement allowed individual activities through a personal corporation, and ChenBaekXi themselves signed it agreeing to pay 10% of the personal corporation’s revenue.” SM Entertainment filed a lawsuit against Chen, Baekhyun, and Xiumin, seeking to enforce the contract and alleging that their unreasonable actions can no longer be tolerated.

INB100 announced their plans to counter-sue SM Entertainment for settlement payments and file an official complaint with the Fair Trade Commission regarding the exclusive contract.

This ongoing problem may affect EXO’s comeback, which is poised this winter, as people watch how this situation will impact EXO’s plans.

Source: Newsis

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