Posted by jennywill Saturday, March 11, 2017

Official documents reveal SM's 'slave contract' with JYJ did not exist to begin with

JYJ had filed a lawsuit against SM Entertainmenton July 31st, 2009. The lawsuit ended in 2012 with both sides reaching an agreement. Because of requests from JYJ's lawyers, the agreement had not been revealed, but in 2015, a law was passed that allowed anyone who requested documents from a civil case to see them.

The documents from the case were requested, and the site TVXQtime.comorganized points for quite some surprising results.

Claims from both sides

SM to JYJ:

The contract between SM and JYJ is written with profit division in JYJ's favor, and therefore is valid. Therefore, there is a liability to JYJ to pay SM for damages. JYJ needs to pay 2.2 billion KRW (approximately 1.9 million USD) that SM suffered in damages that resulted from JYJ refusing to do schedules such as the SimcheonConcert and the CF deals.

JYJ to SM:

1. If SM interferes with JYJ promotions, they must pay 20 million KRW (approximately 17,000 USD) each time.

2. The profit division in SM's contract is unfair, so SM must pay JYJ the difference as calculated by the ratio JYJ wants according to the February 15th, 2007 contract (2nd revision) for all profits before and after.

3. Pay JYJ the profits from 2009 that they did not receive due to the lawsuit.

4. Pay about 5 billion KRW (approximately 4.3 million KRW) total as a sum of 2 and 3. Also include an interest of 20% per year not paid.

Conciliation protocol from the court

1. The contract between JYJ and SM is valid until July 31st, 2009, and it is now over.

2. Out of JYJ's claims, only the pay not given in 2009 is recognized. SM Entertainment must pay each of the JYJ members 650 million KRW (approximately 570,000 USD) within 10 days.

3. SM and JYJ must not get in each other's way.

4. The lawsuit fees must be paid by themselves, and all demand for damages is dismissed.

In other words, the 'slave contract' that JYJ had insisted upon was not true, as if it were, the court would have ordered SM Entertainment to pay the full amount JYJ had demanded, not to mention dismiss that the contract had ever been valid. Instead, the court only ordered SM Entertainment pay them the amount for 2009 that JYJ members had not received because of the lawsuit.

As for unfair contract terms, the court had agreed that SM Entertainment's contract terms were not unfair. All of the costs are taken in by SM Entertainment themselves, and the members get a percentage of not the pure profit, but the total sales (meaning before costs and such are subtracted). It was also recognized that there is profit only after 50,000 albums were sold. On top of that, SM Entertainment gives an incentive of 50 million KRW when they reach over 500,000 albums sold, and 100 million when over 1 million albums are sold. This means that the members are paid extra when they reached that amount sold. Additionally, for CFs and overseas promotions, the members' profit ratio to SM's ratio was actually 7:3, in TVXQ's favor.

As for the 13 year contract, it was revealed that originally, the contract period was 10 years. After rumors that Jaejoongwas being rotated out, the five members and parents themselves requested that the contract period be lengthened.

In a temporary disposition, made quickly so JYJ could promote, the court had ruled the contract unfair. However, that ruling was temporary and had already expired by 2012. The recent revisions to contracts are for trainees, not for current label artists.

Additionally, proof to SM Entertainment pressuring broadcast stations against featuring JYJ had never been found even after investigations. Instead, station PDs revealed that JYJ had never even requested deliberation for broadcast (like everyone must do), and that no one had blocked them even when JYJ was recruited for radio shows.

What do you think of this turnout?

  1. JYJ
  2. TVXQ
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