NewJeans 'failed' with HYBE, 'ultimatum' to be destroyed, became 'debtor'?

It has been about a week since NewJeans sent an "ultimatum" to ADOR, warning that they would terminate the exclusive contract if their demands were not met as previously expected.

Since then, many netizens have been concerned about the group’s uncertain future as there is a high possibility that NewJeans will no longer continue with ADOR. In the event that NewJeans terminates their contract, will the group continue to accompany each other or will they each go their separate ways?

The members seem to be aware of this fact as well, as they shared emotional thoughts about the group's future at the 2024 Korea Grand Music Awards.

Hanni shared: "Honestly, we don't know how much longer we will be NewJeans... But the bond between the five of us and the Bunnies is definitely unbreakable. So let's stick together until the end." Danielle also added: "Even if we are no longer NewJeans, NewJeans will never di.e."

NewJeans's sharing has made fans extremely confused and worried. Most opinions expressed concern that if they leave HYBE, the group will likely disband and will not be able to continue using the NewJeans brand. Because of the current situation, the relationship between NewJeans and HYBE is extremely tense.

According to music industry officials, the group NewJeans submitted documents using their legal names instead of their professional stage names, respectively: Kim Minji, Hanni Pham, Danielle Marsh, Kang Haerin and Lee Hyein.

The members asked ADOR to respond to the requests made in response to the company's alleged violation of its exclusive contract and to make corrections within 14 days of receipt. NewJeans also emphasized: "If we do not accept the correction request, we will terminate the exclusive contract."

Yonhap also released a page of the document. According to it, part of the document refers to the internal report recently revealed by HYBE, which contains negative plans and opinions about NewJeans.

Amidst the news of the group NewJeans sending a confirmation letter to ADOR, warnings have been making the rounds. Korean netizens have turned their attention to the amount of mone.y the group will have to pay in case they terminate their exclusive management contract.

Specific contract terms for NewJeans, which will launch in 2022, have not been disclosed. However, according to standard exclusivity contract guidelines set by the Fair Trade Commission, the termination fee is calculated by multiplying the average monthly revenue over the past two years by the number of months remaining in the contract.

According to previous reports, ADOR recorded sales of about 190 billion KRW ($125.6 million) in the 24 months from the second half of 2022 to the first half of this year.

Since ADOR's revenue is solely based on NewJeans, this amount can be considered NewJeans' sales revenue. Based on the Fair Trade Commission's standard exclusive contract guidelines, the estimated penalty will exceed at least 300 billion KRW (about 214.1 million USD).

Additionally, if NewJeans were to leave the company and go independent, there would be the issue of having to give up their group name and related intellectual property (IP). Since ADOR and HYBE own NewJeans’ IP, the group would likely need to promote under a new name if they were to terminate their management contract.

Finally, considering the current situation, it seems that separating from HYBE will not be an easy task for NewJeans, in other words, "favorite" Min Hee Jin will struggle with many financial and legal issues if she wants to terminate the contract before the deadline.

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