SM Lee Soo-man to Quit Producing Through Personal Company

Early Termination of Like Planning and Producing Contract
If Producing is Withdrawn, SM Remains Only as 'Major Shareholder'

[Image source=Yonhap News]

Lee Soo-man, the Chief Producer of SM Entertainment, will stop producing through his personal company Like Planning starting next year.

SM Entertainment announced on the 14th that it held a board meeting and decided to terminate the producing license contract with Like Planning early. Like Planning received 24 billion KRW from SM Entertainment last year under the name of producing. According to the producing contract with SM Entertainment, it took a certain percentage of related sales as royalties.

According to the Financial Supervisory Service's electronic disclosure system, SM Entertainment paid 11.4 billion KRW to Like Planning in the first half of this year for producing services. During the same period, SM Entertainment's operating profit was 38.6 billion KRW. The amount paid to the Chief Producer personally corresponds to 29.6% of the company's total operating profit.

Minority shareholders of SM Entertainment opposed this as "preferential treatment." In particular, Align Partners Asset Management, which holds about 1.1% of the shares, criticized the Chief Producer for months, saying that "it damaged the value of shareholders and the company."

These minority shareholders appointed an auditor they recommended at the shareholders' meeting in March. In August, through a shareholder letter, they continued to raise issues, stating, "Even though nearly five months have passed since the shareholders' meeting, no improvement plans or progress have been announced."

Under pressure, the Chief Producer announced last month his intention to terminate the producing contract early. Align Partners welcomed the final decision on that day.

Once the Chief Producer steps away from producing, he will remain only as a 'major shareholder' in SM Entertainment. In the music industry, there is speculation that he may be involved in album production through other means. This is because he is the founder of SM Entertainment and the key figure who nurtured its representative artists.

The Chief Producer influences not only songwriting and composing but also the musical direction and worldview of the affiliated artists. Externally, he is discussing the development of cultural industries and performance infrastructure with the Saudi Arabian government, which has a strong interest in fostering the cultural industry.

This content was produced with the assistance of AI translation services.