Thousands of Billions Lost in Air? The De Facto End of K-pop's 'Miracle of Small and Medium Enterprises'

Dispute Over Exclusive Contract with Fifty Fifty's Agency
Industry and Public Opinion Unilaterally Support Agency
Agency, Members, and Investors All Essentially 'Losers'

The legendary run of 'FIFTY FIFTY,' which entered the Billboard 'Hot 100' for the longest period in K-pop girl group history (15 weeks) and reached a peak position of 17, hailed as the 'miracle of a small company,' has effectively come to an end. After the members filed an injunction lawsuit to suspend the exclusive contract with their agency Attract, a public backlash ensued, making it difficult to guarantee future activities regardless of the court's decision.

The industry is also reacting sensitively to this unprecedented situation. The Korea Entertainment Producers Association stated, "Opportunistic talent poaching by unscrupulous forces backed by capital undermines the foundation of growth for production companies and artists who have built the roots of K-pop." They also expressed support for the 'miracle of a small company.' If idols created with investments ranging from tens to hundreds of millions of won gain popularity and move to large companies, small companies have no reason to nurture idols. Large companies can simply take well-developed idols away.

The Seed of the Dispute: 'Outsourced Production'

The seed of the dispute began with Attract's 'outsourced production.' The entire debut and production of FIFTY FIFTY was entrusted to 'The Givers,' led by CEO Ahn Sung-il, a former composer. Outsourcing production is common among small and medium-sized entertainment companies lacking in-house production capabilities. Attract CEO Jeon Hong-jun raised activity funds externally by working tirelessly, reportedly selling his car and watch and even borrowing money from his mother. The Givers were responsible for the artists' activities.

The cooperative relationship between the two companies broke down amid suspicions of 'member poaching.' Attract raised the issue first, claiming that external forces were illegally inducing FIFTY FIFTY to sign contracts elsewhere, disregarding the exclusive contract. The external force was none other than The Givers. Attract filed a complaint against Ahn Sung-il, CEO of The Givers, and three others for fraud and breach of trust. The next day, the members issued a statement saying that a contract termination lawsuit was underway. CEO Ahn also denied the allegations as "baseless."

No Justification or Benefit?

FIFTY FIFTY's justification can be summarized in three points: the agency's incompetence and lack of support, opaque settlements, and forced activities. There was no claim of toxic clauses in the contract itself. After repeated incidents involving 'slave contracts' in the past, the Ministry of Culture, Sports and Tourism created a standard contract form, which most entertainment companies adopt, including Attract.

It is rare for a group that debuted less than a year ago to receive settlements. In the entertainment industry, settlements occur after the agency recovers all investment costs and then shares profits with the artists. The investment amount revealed during the trial reached 8 billion won. However, the members earned little as their activities were almost limited to music shows. Considering the agency's efforts to raise funds and contribute to the Billboard surge through viral marketing, claims of incompetence and lack of support are hard to accept. These assertions contradict industry norms, and public backlash intensified when it was revealed that Attract provided a three-room Gangnam accommodation costing 2.7 million won per month.

There are also suspicions that The Givers deliberately neglected group activities to reduce penalty fees. Penalties are calculated based on expected profits from existing sales. Coincidentally, it was revealed that on the day the contract termination lawsuit was filed, the members applied for trademarks such as 'FIFTY FIFTY,' lending credibility to the theory that 'cutting ties with Attract' was meticulously planned. CEO Jeon claims, "I fully trusted The Givers," and alleges that Ahn Sung-il gaslighted the members. The members believed and followed CEO Ahn as if he were the 'real CEO.' In fact, CEO Jeon reportedly never properly met the members.

Billions Lost in the Air: 'Everyone is a Loser'

Regardless of the court's decision, it is said that the agency, investors, and members are all 'losers.' Even if the court sides with FIFTY FIFTY, the industry and fans have turned their backs, meaning 'Korea passing' must be considered. Until now, no K-pop artist has existed without any base in Korea. Even K-pop artists with overwhelming overseas popularity never neglect Korea.

This incident has effectively caused billions of won to vanish, considering both invested funds and future earnings. Attract received 1 billion won each from Hansae Co., Ltd. and Yes24, and utilized the Korea Technology Finance Corporation's 'Investment-Linked Guarantee,' a system that provides guarantees for companies unable to secure direct loans from financial institutions. The Givers also secured 10 billion won in investment from Kyobo Book Centre. Additionally, schedules such as appearing in the movie 'Barbie' music video, major corporation commercials, and variety show appearances were canceled or fell through. Performances commemorating the 140th anniversary of Korea-UK diplomatic relations in London and KCON LA also became impossible. Opportunities to meet global fans directly were lost. Warner Music once considered investing 25 billion won but that too fell through. The phrase "The goose that laid the golden eggs has cut open its own belly" has been used to describe the situation.

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