Source: Joongang Ilbo
The aftermath surrounding founder Lee Soo-man's future at SM Entertainment is getting fierce.
The backlash began when SM announced it's vision for the future on the 3rd and officially announced Lee Soo-man's resignation from the company. Lee Soo-man has been in charge of SM's production for 27 years. However, since then, opposition from artists and disputes among internal staff has continued, resulting in infightings between SM executives and staff.
When SM officially announced Chief Producer Lee Soo-man's resignation, a storm began to brew.
"Lee Soo-man is absolutely essential" vs. "We need to escape from the glory of the past"
On the 3rd, SM announced it's future strategy dubbed 'SM 3.0.' The key was to change the production system led by Lee Soo-man by introducing a multi-production center/label system. On the same day, SM co-CEO's Lee Seong-soo and Tak Young-joon officially announced Lee Soo-man's resignation stating, "Lee Soo-man's contract with SM as executive producer has ended. We want to sincerely thank teacher Lee Soo-man who will continue to support SM as a shareholder."
However, some executives are protesting the announcement that Lee Soo-man will be excluded from SM productions. Singer-actor Kim Min-jong sent an email to all SM staff on the morning of the 5th and stated, "Contrary to Lee Seong-soo and Tak Young-joon's claims that "they're on teacher Lee Soo-man and SM family side," they've cut off all contact with teacher (Lee Soo-man) without any goodbyes and unilaterally announced his resignation without discussions with him. Lee Soo-man's unique sense and production capabilities are absolutely essential for all SM artist activities including me."
Lee Soo-man also expressed his "uncomfortable feelings" related to SM 3.0 through various channels.
However, within SM, there's a lot of support for "SM without Lee Soo-man."
On the 6th, criticisms over Kim Min-jong's claims and support of 'SM 3.0' was shared on SM bulletin board on Blind and leaked publicly by an anonymous insider. In the leaked posts, one employee is seen writing, "We're a trillion unit market cap company. But entering the 4th gen idol era, I feel that our governance isn't sophisticated when it comes to song, concept, and marketing. Without significant changes, we're likely to fall behind in the industry. We need to stop getting drunk off the glory of the past and stay alert!"
SM's share price surpasses 90,000 won mark for the first-time since its listing.
Since it's founding in 1995, Lee Soo-man has led SM as the executive producer. After stepping down as registered director in 2010, he has received over 20 billion won annually in the name of "producing" through his private company. As of 2021, Lee Soo-man has received 24 billion won through his company 'Like Planning', which amounts to one-third of SM's annual operating profit.
In response, Align Partners, a minority shareholder activist fund put brakes on it. Since September last year, Align has taken issue with Lee Soo-man's contract with SM and announced a lawsuit in January this year. However, on 20th of last month, all lawsuits were withdrawn after an agreement was reached on 12 items related to the company's management. The multi-production system included in 'SM 3.0' was one of the items agreed upon at the time. At a subsequent board meeting, SM announced that a majority of its board would be made up of outside directors and at least 20% of its net profit would be returned to shareholders over 3 years.
As a result, investor outlook is more positive following the governance structure improvements and income return to shareholders. According to the Korea Exchange, SM stocks closed at 92,200 won on the 6th, up 1.32% from the previous business day's closing price, recording a 52-week high. The stock exceeded the 90,000 won mark for the first time since its founding after the 'SM 3.0' announcement on the 3rd and continues to rise every day.
On same day, Samsung Securities also raised the target price for SM stock from 104,000 to 124,000. Choi Min-ha, a researcher at Samsung Securities analyzed, "Areas that have been pointed out in the markets as chronic problems such as Like Planning and a number of non-core businesses unrelated to the main business will be improved in earnest from this year."
- [+792, -282] When is Moon Jae-myung getting arrested???
- [+506, -10] First off, if this was the U.S, any private subsidiary getting over 20 billion won a year from the parent company would've been hit with lawsuits and fined astronomical damages in compensation . What kind of contract or company does he have worth receiving 24 billion won, over one-third of the parent's profits ㅋㅋ
- [+459, -5] Lee Soo-man set up a private company where he owns 100% of the shares and earned over 160 billion won through the years shifting all the work from SM employees to his own staff. If anyone does this in any other regular entertainment agency, the CEO and execs will be thrown in prison for breach of duty. Looks like his intents were to rob the company blind. Soo-man harabeoji [grandpa].. stop with your greed!!
- [+168, -12] What's to defend.. with what sense exactly is he getting a monthly salary on top of the tens of billions of won a month he's making through his private company.
- [+146, -6] So what's for dinner tonight guys..
- [+113, -2] Honestly, looking at Le Sserafim, IVE, and NewJeans these days.. aespa really feels comparatively old and dated.. I can tell Kim Min-jong is the loyal type but loyalty is not the way to do business.
- [+100, -2] Yes, we can all admit that Lee Soo-man was an excellent producer and planner in the past but that's not the case anymore. He's a 70yr old grandpa now and his intuition is just not the same anymore. So many 4th gen idols are topping charts but SM is getting left behind. The internal staff absolutely know best. After listening to Got The Beat this time, I realized not just Lee Soo-man but also Yoo Young-jin need to get kicked. For how long do they think that music produced by grandpas in their 70s and 50s is going to keep up with the trends and idols of this generation?? The adults need to realize when to back off and retire from their jobs!!
- [+53, -1] He needs to start eating in moderation.. one-third of SM profitsㅋㅋ???
- [+52, -2] This old man needs to let go now.. it's like he's working with blinds on. Look at NewJeans and take a few lessons..
- [+47, -2] Well, if he hadn't put in Chinese kids he wouldn't be getting kicked like this. Why is he so obsessed with the Chinese???
- [+29, -0] Looks like he still hasn't realized why aespa and Got The Beat are flops.. SM is seriously going to hit rock bottom at this rate and disband forever if Lee Soo-man and Yoo Young-jin aren't kicked! No.. SM is already in ruins.
- [+28, -1] It's not just once or twice that he's been stabbed in the back by the CCP.. but even then, he still continues to use CCP kids. It's time for him to go to a nursing home now.
- [+17, -1] After seeing NCT and SM idols doing Kwangya, I'm convinced SM is totally headed for disbandment..