The K-pop group NewJeans performs at the Billboard Women In Music 2024 event held at YouTube Theater on March 6, 2024 in Inglewood, California. Rich Polk/Billboard/Getty Images/File
South Korea's leading K-pop agency, Hybe, suffered a market value loss of over $423 million on Friday after NewJeans, the popular rookie girl group, announced their decision to terminate their contract with Hybe's subsidiary label, ADOR. The move, stemming from a prolonged management dispute, triggered a significant 6.97% drop in Hybe's stock price.
Formed in 2022, the five-member group held a press conference late Thursday to announce their departure. They cited contractual breaches by ADOR and highlighted a toxic work environment as key reasons for their decision. “Staying here would only bring us mental pain,” said Hanni, one of the group members. “There’s no professional growth left for us at ADOR, so we see no reason to stay,” she added, as reported by South Korean outlet Yonhap.
The members of NewJeans announce the termination of their contract with ADOR during a press conference on November 28, 2024 in Seoul. Chung Sung-Jun/Getty Images
The fallout follows a legal notice sent by NewJeans to Hybe earlier this month. The group demanded the reinstatement of former ADOR CEO Min Hee-jin and resolution of grievances, warning they would terminate their contracts if the issues were not addressed. Reports from JoongAng Ilbo revealed that their demands also included addressing an alleged internal Hybe report suggesting the group be replaced entirely.
During the press conference, Hanni alleged mistreatment of both the group and their staff, citing “deliberate miscommunication, manipulation, and countless contradictions.” She had previously testified before South Korea’s parliament in October, alleging workplace harassment at ADOR. “This is not the kind of work ethic we can respect or tolerate,” she said, emphasizing the harmful impact of continuing under such conditions.
The controversy also ties back to internal tensions at ADOR. Earlier this year, Hybe accused Min Hee-jin, then CEO of ADOR, of attempting to make the label independent. Min denied the allegations, countering that Hybe had copied NewJeans’ concept for another group. She stepped down as CEO in August and resigned from her remaining position as a director on November 20.
NewJeans, widely regarded as one of K-pop’s breakout successes, rose to prominence shortly after their debut in 2022. They’ve garnered numerous accolades, including the Group of the Year Award at Billboard’s Women in Music event in 2024. Their achievements include charting across 10 Billboard categories, such as the Billboard Hot 100 and Global 200.
The controversy comes at a challenging time for Hybe, which saw its net profit plummet by nearly 99% in the third quarter of 2024. Analysts attributed the decline to limited artist activity during the 2024 Olympics and high costs associated with launching KATSEYE, a new U.S.-based group. Hybe's shares have dropped 15.72% this year, reflecting broader struggles in the K-pop industry as all of the “Big Four” agencies face declining stock prices.
