Much attention has been put on SM Entertainment and its future actions as the Courts have sided with the three TVXQ members YoungWoong Jaejoong, Micky Yoochun and Xiah Junsu on the legal dispute between the three and their agency regarding their exclusive contract.
On the 27th, the Seoul District Courts partially accepted the exclusive contract suspension request against SM Entertainment submitted by Xiah Junsu, YoungWoong Jaejoong and Micky Yoochun.
To have the Courts partially accept the exclusive contract suspension request is to have the Courts decided that the contract between SM and the members of TVXQ is in fact unlawful. According to the decision of the Courts, SM is not allowed to interfere or question any individual activities of the three members or create contracts regarding group activities without the consent of the three members.
For now, SM has stated that the agency cannot accept the Courts' ruling. SM Entertainment released a notice stating "Although the entire contract was not suspended, the Courts stated that some parts of the contract was questionable and that is why we are submitting an appeal," and "Till now, we have kept some information from the media as the Courts requested that neither side be interacting with the press during the trial. Now we will reveal that information and release an official statement.
Unless an extremely controversial secret is revealed by SM Entertainment that could turn the tables, it can be said that the contract between SM and TVXQ has already been nullified.
The dilemma that SM faces now is the fact that the agency's other singers may attempt to leave the agency in the same method. TVXQ is not the only reason why SM is being so adamant and firm of their stance in this dispute. To state that conclusion first, there is close to no chance of TVXQ disbanding or ending their activities. This is because all three members involved in this dispute have no thoughts of leaving the group names TVXQ. Some representatives to the entertainment business stated that, "There is a high chance that SM and the three members will become equal partners regarding activities such as the release of a new album in the future."
The problem is how the two sides will fix the contract and the income division. Although the income SM receives from album sales or commercial activities will reduce, it is not so much that the company will run into bankruptcy.
The biggest problem for SM Entertainment is the fact that the majority of agencies works under a system that invests money to raise trainees into singers in a span of 1~7 years that does not guarantee profit after the singer's debut. In the case of TVXQ, if they are allowed to leave the agency stating that the contract was unlawful after gaining popularity, the agencies will have no incentive to continue on with this method of raising stars. This is also why the Fair Trade Committee constantly fails to come to a consensus with agencies when it comes to creating a basis contract.
The reason that SM is being carefully watched for its future actions regarding this trial and the consequences that follow is because this is not merely a problem between SM and TVXQ.
Source: [mk news+DNBN]
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