Leaked "shareholder letter" reveals HYBE plans to prioritize comebacks and top tier "choreos", "songs", and "trainees" for their idol groups

Article: SM 'Letter to Shareholders'.. "New Jeans' HYBE will prioritize good songs for their artists first"

Source: Yonhap News

SM Entertainment has sent a letter to shareholders amid a fierce battle for management rights.

According to a music industry insider on the 1st, SM recently sent a letter to shareholders titled "To the Shareholders of SM" ahead of the shareholders meeting scheduled for the end of this month. 

On the outside of the letter's envelope, promise of "an independent Board for all shareholders and not specific shareholders" and "dividend of 1,200 won per share" is written. In the bottom left, "SM Board Recommendation" is circled and "former major shareholder Lee Soo-man's proposal" listed on the right is marked out with an X drawing attention. 

In the leaked letter, SM writes, "This incident is an important event that will never happen again in the history of Korean entertainment. This year's shareholder meeting is the last opportunity to completely resolve SM's governance issues that have been going on for the past decade and raise corporate value to the next level as an entertainment company with the best artist pool in Korea."

SM also attached a separate Q&A document to persuade shareholders. In response to the question, "Isn't it a good thing if SM is acquired by HYBE, a huge agency that's also in the same industry?" SM retorts writing, "Well, we'll have no choice but to accept their first priorities being their own affiliate labels like Big Hit (BTS), Ador (New Jeans), Source Music (Le Sserafim), and Pledis (Seventeen). The best songs, choreographies, trainees, concerts, and comebacks will go to their artists."

"If HYBE owns up to 40% of SM shares and the remaining 60% is held by general shareholders, conflicts of interest will inevitably arise between SM and HYBE shareholders as competitors."

SM also presented an explanation as to why they're supporting Kakao's paid-in capital increase through issuance of convertible bonds at 90,000 won and opposing HYBE's 120,000 won tender offer.

SM explains, "Kakao's paid-in capital increase and bond issuance is for strategic collaborations with the company. We can expect synergies."

1. [+403, -31] SM is such sore loser with this pathetic media play. Did they only learn dirty things from Kakaoㅎㅎㅎ?
2. [+246, -12] They really think other agencies operate through fist fights like they doㅋㅋㅋㅋㅋ. HYBE has a separate producer and A&R team for each label..ㅋㅋ 
3. [+185, -2] This is seriously making me think they know nothing about managing a huge agency. So what were they planning to do with 'SM 3.0' exactly? 
4. [+134, -5] An independent labelᆢ who?? To whom?? Is he saying he plans to gift it out?? He's basically confirming Min Hee-jin's seat on his own.ᆢ He must really think everyone operates like SM. So why is he losing brains trying to make 'SM 3.0' happen?ᆢ Looks like the Board is on a tight leash and they're selling aespa here and there clawing like rabid animals to stay alive. 
5. [+130, -9] An SM-Kakao collab is seriously nothing to look at ㅋㅋㅋ.. New Jeans is doing great with their own songs.. so why take things to the media for a public opinion battle? 
6. [+69, -1] I never thought SM would stoop so low to take things to the media like this. Le Sserafim and New Jeans are two completely different idol groups, managed through separate labels. They seem to think they're managed like your neighborhood corner store. This is making me want to support a HYBE takeover now. 
7. [+53, -1] Well, if that's the case, then Kakao is prioritizing their best songs to IU first before IVE, Monsta X ㅋㅋ. This clearly shows he knows nothing about how affiliate labels work. 
8. [+50, -0] New Jeans' songs were prepared by the Ador CEO but he's talking like their songs were gifted directly by HYBEㅋㅋㅋㅋ. 
9. [+36, -0] Is he seriously telling minority shareholders who know nothing that if they're acquired by HYBE all their singers will be ruinedㅋㅋㅋ? Each label has its own A&R and producer team. HYBE is only in charge as general manager. They don't give out songs based on share ownerships ㅋㅋㅋ. This director is saying things to shareholders that fans write on Twitter. 
10. [+25, -1] Is this a comedyㅋㅋㅋ? Even BTS and TXT who are in the same label have different producers ㅋㅋㅋ
11. [+15, -1] SM's management level is seriously sh*t tier ;;; 
12. [+12, -0] Is this director a choding who only made it through elementaryㅋㅋㅋㅋ? Why is he so hyper focused on Ador ㅋㅋㅋㅋ