The E&M, Selected as Lead Consortium for Cheongna Video Culture Complex: "Underwent Proper Review... Focused on Coexistence with Small and Medium Production Companies"

[Asia Economy Reporter Jang Hyowon] The E&M Consortium stated on the 21st that it followed proper evaluation procedures in response to allegations of inadequate review related to the priority negotiation candidate assessment for the Cheongna International City Video and Culture Complex.

The E&M Consortium recently scored the highest in the evaluation of proposals for the Cheongna Video and Culture Complex project, including assessments of applicant evaluation, comprehensive development plans, and management operation plans. This project aims to create a globally competitive video and culture cluster by attracting the video industry, a core strategic industry within Cheongna International City. It will establish video production infrastructure such as indoor and outdoor studios and tourism cultural facilities on a site of approximately 188,000 square meters.

According to the Incheon Free Economic Zone Authority, the appropriateness evaluation of investor composition judges the excellence of the consortium’s shareholding structure and the adequacy of responsibilities and authorities, rather than comparing individual companies.

A company official said, “The KT Consortium includes KT, the lead company but not a core business operator, holding 30% of shares, and three real estate development companies participated. The shares of core business operators submitted by the KT Consortium, such as CJ E&M and KT Skylife, are only 0.25% each, totaling 0.5%.”

He added, “The E&M Consortium’s shareholding structure consists of core business operators and foreign investment companies in a 7 to 3 ratio, receiving excellent evaluations for its shareholding structure and management operation plan.”

The company further explained that while the basic structure of the public offering is designed to reinvest profits from officetels into the development of the video culture complex, the KT Consortium separated the corporation during the development and operation stages. This means that only the profitable facilities such as approximately 2,000 officetel units worth about 1.2 trillion KRW are sold off and dissolved, and a separate KT-owned operating corporation purchases the facilities of the video culture complex.

In contrast, the E&M Consortium established a business plan to reinvest 90 billion KRW of profits generated from the officetels into the operation of the video complex according to the public offering guidelines. Their plan to supply about 200 officetel units at low prices to foster small and medium-sized video companies also received high marks.

A company official said, “In design evaluation scores, the E&M Consortium’s open-type studios outperformed the box-type design of the KT Consortium,” adding, “The evaluators positively assessed the intention to create an experiential video culture complex that discovers video industry talent and allows visitors to enjoy it together.”

He continued, “Until now, the K-content industry has faced difficulties in the growth of small and medium-sized production companies due to issues such as IP monopolization and profit distribution by OTT (online video service) platforms and large media companies, as seen in cases like ‘Squid Game.’ The consortium partners in this project are centered on small and medium-sized production companies, the actual creators of content, and will work with more diverse and capable small and medium-sized producers in the future.”

The E&M Consortium also stated that there are no concerns regarding funding for the smooth progress of the development project. A company official explained, “We have invested in various fields of the content industry and have achieved operating profits for three consecutive years, demonstrating excellent financial stability,” adding, “Detailed plans for securing self-funding, including investor fund recovery, have been finalized.”

The E&M Consortium’s credit rating is A-, and regarding concerns about project financing (PF) due to high interest rates, the company said, “Financial investors (FIs) and construction companies have already been confirmed.” Meritz Securities, KB Securities, and Hanyang Securities have submitted letters of intent for loans as FIs, and Hyundai Construction and Kumho Construction have been confirmed as participating contractors.

A company official stated, “Popcorn TV is completely unrelated to this project,” emphasizing, “There is nothing related to Popcorn TV in the project concept plan or the public offering proposal.” Regarding connections with the KH Group and the background of selection, the company said, “Some media outlets have published articles based on unverified facts,” adding, “Our company and the consortium have no relation to the KH Group, and there is no issue with the fairness of the priority negotiation candidate selection.”

He said, “The first step toward K-content coexistence led by small and medium-sized production companies rather than large corporations is being hindered by articles written with distorted information,” urging, “We will respond strongly to speculative articles for the sake of small and medium-sized production companies that support and encourage us and the consortium, so please stop the slander.”

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