This is Why K-Pop Companies Have Harsh Contracts

If you’re a K-pop fan, companies and their cruel contractual agreements are not old news. Young aspirants sign contracts to be trainees in entertainment companies in the hopes of making their debut as an idol, whether in a group or as a soloist. Many contracts have intense clauses, and this is the reason why.

A company puts their all in investing in their talents. Most companies will pay for the housing of trainees as well as their food, and some bigger companies even give them allowances. If you’re a foreigner, you get Korean lessons. They do all of this so that their trainees will be in tip-top shape when they debut. Sounds good, right?

But it’s not all for free. When an idol debuts, they need to repay the company for how they invested in them, and the contract is there to bind them to their debts. There are two ways an idol can pay back their debt: by either paying them back little by little over time or by receiving reduced income until the debt is all cleared. The division between revenues depends on the company. The fairest is 50/50, but some are 70/30 and 80/20.

This is done because of how expensive it is to train and debut a K-pop act. The beginning price of debuting a group can go up to hundreds of thousands of dollars. LOONA, a girl group from Blockberry Creative, cost millions to debut. It is said their debut was higher than the GDP of the island Niue, who saw a GDP of $10 million USD in 2003. 

You might be wondering, what is the most expensive cost a company pays for? Is it the production costs, music video filming, hair, makeup? Nope. It’s the food. Their idols need to be healthy and nutritious to perform on stage.

For example, SEVENTEEN is a group of thirteen members and it costs $300 a meal for the group, which means they spend over $1,000 a day, making $30,000 a month just for food. The company needs their money back!

However, the big three companies – SM Entertainment, JYP Entertainment, and YG Entertainment – are claimed to be forcing idols to pay them back. However, they do enforce the reduced income method on their artists upon debut. When they become more popular, the larger their paycheck becomes. Things like tours, variety shows, and concerts may seem like it gets them a lot of money, but its the company that does all the footwork and booking, so most of the profit from those activities goes to them.

Now it may sound bad, but it isn’t all like that. Companies use some of the money they get back from trainee debts for the group’s promotions. They use the money to produce reality shows, music videos, and more. K-pop is the genre in which all their artists have numerous activities and that all need funding, which is why their contracts state that they need to repay back their debts or have reduced incomes. The company is basically re-investing back into the idols.

However, smaller companies are known to be a little harsher than bigger companies. That’s not to say they are all bad, but there have been cases of small companies just not giving their artists paychecks at all, putting them in harsh living conditions, and giving them little to no activities for promotions. Some contracts from smaller companies force groups to sign 7-year contracts, binding them to the company despite mistreatment.

Smaller companies usually don’t have the money to re-invest in a group when they debut, which means they are just a mistake away from crashing and burning. And it that happens, then the group will disband and the idols will be left jobless.

Some of the more intense contracts also state that an idol must still repay their trainee debuts even when they chose to leave the company. It is only nullified if the contract is terminated.

Some idols fight back against contracts that bind them, however. In the past, groups have filed lawsuits against their companies. For example, B.A.P filed a lawsuit against TS Entertainment due to unfair living conditions and wage distributions. Block B had filed a lawsuit against Stardom Entertainment, stating that they weren’t paid for over a year despite their contract saying they would be paid on the 25th of every month.

Even big companies have had lawsuits scandals! The former Chinese members of EXO (Kris, Luhan, and Tao) all filed lawsuits against SM Entertainment, citing mistreatment, the difference in treatment between Chinese and Korean members, as well as unpaid wages.

With these lawsuits, though, it seems companies are doing their best to cater to their idols and their needs. We hope that all idols continue doing what they love and that they get paid the wages they deserve.

Hopefully, all idols trapped in bad contracts can be freed soon.