[HYBE Owner Risk] Bang Si-hyuk at a Crossroads of Arrest, Warning Lights for HYBE's Business

As Bang Si-hyuk, Chairman of HYBE, faces the risk of arrest, HYBE-once anticipated to see improved earnings thanks to the BTS comeback-is now under pressure. Despite generating over 2.6 trillion won in revenue last year, HYBE posted disappointing results with profit falling short of even 50 billion won, due to BTS’s military service and sluggish performance in its U.S. operations. This year, as BTS makes a full group comeback and Chairman Bang, who has led HYBE’s global expansion, faces mounting legal risks, concerns are growing that HYBE’s ongoing projects may encounter serious obstacles.

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On the 21st, the Financial Crime Investigation Division of the Seoul Metropolitan Police Agency requested an arrest warrant for Chairman Bang from the Seoul Southern District Prosecutors’ Office on charges of fraudulent transactions under the Capital Markets Act. Chairman Bang is suspected of telling existing HYBE (then Big Hit Entertainment) investors in 2019 that there were no plans for an initial public offering (IPO), and then having them sell their shares to a special purpose company (SPC) created by a private equity fund (PEF) formed and funded by HYBE executives. The SPC went on to sell HYBE shares after the IPO, and according to the police, Chairman Bang allegedly received about 30% of the capital gains through a prearranged agreement with the SPC, obtaining approximately 190 billion won in undue profits. Chairman Bang’s side maintains there was no deception of investors.

With the possibility of Chairman Bang’s detention, HYBE is now facing heightened owner risk. Expectations had been high that, with HYBE’s artists resuming activities this year, performance would improve. Last month, BTS released their fifth full-length album, ‘ARIRANG,’ on the 20th, and comebacks for artists such as LE SSERAFIM, ILLIT, KOR-TIS, and TOMORROW X TOGETHER are also scheduled for the second quarter. Chairman Bang has long been deeply involved in the production of his artists’ albums. The recent BTS comeback album, ‘ARIRANG,’ is also said to be his idea, with reports that he persuaded the members to participate.

The group BTS held a free comeback concert titled "BTS Comeback Live: Arirang" (BTSTHECOMEBACKLIVE｜ARIRANG) on the 21st at Gwanghwamun Square in Seoul. BTS is performing at the concert. 2026.03.21. Photo by Joint Press Corps

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If the arrest warrant is issued, Chairman Bang’s overseas activities will be blocked, raising the prospect of setbacks for HYBE’s international business as well. According to HYBE’s 2025 business report, the company has invested in a total of 23 joint ventures and associates, 15 of which are U.S.-based. These U.S. entities not only support artists with record label and management agency functions but also handle food distribution and consumer goods, as HYBE has sought to diversify into food and apparel. In particular, though HYBE secured various network channels through its acquisition of Ithaca Holdings in the U.S., it incurred significant costs across multiple genres without corresponding gains.

As the owner risk intensifies, HYBE’s share price has also been shaken. Negative forecasts for recent earnings are emerging, especially among securities analysts. On the 21st, IBK Investment & Securities lowered its target price for HYBE from 480,000 won to 400,000 won. Yoo Hyuk Kim, a researcher at IBK Investment & Securities, explained, “HYBE’s operating profit in the first quarter of this year is estimated at 39.9 billion won, falling short of the market expectation of 43 billion won, and there is an additional burden from higher settlement rates due to BTS’s third contract renewal.” Meritz Securities also lowered its target price for HYBE from 450,000 won to 390,000 won, forecasting that first-quarter results will likely fall short of expectations.

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There are also criticisms that HYBE’s revenue structure itself has reached its limits. Within entertainment companies, revenue from albums, concerts, and advertisements is classified as direct participation revenue, while content leveraging intellectual property (IP), merchandise planning (MD), licensing, and fan clubs are categorized as indirect participation revenue. As the proportion of indirect revenue relying on external partnerships has grown, the cost ratio has also increased. According to HYBE’s 2025 business report, the share of album and music sales in total revenue fell to 29.17% in 2025, down from 38.17% in 2024. Meanwhile, the share of MD and licensing revenue rose from 18.63% in 2024 to 21.53% last year. Hyunji Lee, a researcher at Eugene Investment & Securities, commented, “Due to the higher cost ratio resulting from BTS’s increased contribution in the first quarter and the advance booking of production costs related to albums and tours, HYBE’s profits are likely to have been somewhat sluggish.”

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