SEOUL, SOUTH KOREA – A prominent K-pop girl group, NewJeans, created waves in the industry on Thursday when they announced their decision to terminate their contract with Hybe sub-label ADOR. This move resulted in South Korea’s largest K-pop agency, Hybe, losing over $423 million in market capitalization the following day.
NewJeans, a five-member group formed in 2022, cited breach of contract by ADOR as the reason for their departure during a press conference. The group outlined their grievances, including mistreatment, preventions, contradictions, and deliberate miscommunication within the agency. These issues, compounded by a reported months-long management dispute, led to their decision to sever ties with ADOR.
The rift between NewJeans and Hybe escalated when the group sent a list of demands to Hybe, including the reinstatement of former ADOR CEO Min Hee-jin. Failure to meet these demands prompted the members to take the drastic step of terminating their contracts. This move was a culmination of mounting tensions between the group and the agency, further fueled by allegations of workplace harassment levied by member Hanni during a parliamentary testimony.
The departure of NewJeans is a significant blow to Hybe, as the group had quickly risen to fame since their debut in 2022. Recognized for their accomplishments in the industry, NewJeans had been awarded the Group of the Year Award at Billboard’s Women in Music ceremony in 2024, solidifying their position as one of K-pop’s most popular acts.
Hybe’s financial woes exacerbated following the departure of NewJeans, with the company reporting a steep decline in net profit in the third quarter of 2024. Analysts attribute this decline to limited artists and activities during the 2024 Olympics, along with increased costs associated with the launch of KATSEYE in the U.S.
The fallout from NewJeans’ departure underscores the challenges faced by K-pop agencies in maintaining their top talent amid internal disputes and increasing competition. This incident serves as a reminder of the complexities within the K-pop industry and the pressures faced by both artists and agencies in sustaining their success.