The written accusation submitted argues that his contract with SME is unfair due to 6 reasons.
First, the accusation argues that SME was the dominant party in signing of the contract and thus it was written in their favor. When the contract was first signed in January 2003, Hankyung was only 17 years old and he did not have sufficient information on the Korean entertainment industry. Two updates made to the contract in February and December of 2007 were also led by SME and Hankyung had no choice but to accept what was offered by SME.
Second, the length of the contract is 13 years. When the contract was first signed, it was to last for 10 years after the release of Super Junior’s first album. After the two updates, the length was extended to 13 years. The contract would last at least until December 2018, when Hankyung would become 34 years old. The contract extends automatically when Hankyung takes break for personal reasons, so the actual length could be much longer than 13 years. The accusation calls this a great invasion of Hankyung’s basic human rights.
Third, the contract enforces heavy financial punishment in case of a breach of contract, preventing Hankyung from seeking release. If Hankyung was to breach the contract and move to another entertainment company, he has to compensate SME for 3 times what they invested in him and double what he would have earned for SME during remaining period of the contract. The accusation argues that this makes it impossible for Hankyung to leave SME.
Fourth, the terms on rights and division of responsibilities are unfair towards Hankyung. SME is responsible for vague tasks such as “management of the artist’s popularity” and natural tasks such as “notifying the artist of new schedules”. On the other hand, Hankyung is to follow SME’s decisions without question and without having any rights for adjustment of the contract, making the contract unfair for Hankyung, according to the accusation.
Fifth, the contract made Hankyung overwork. He was forced to pay $10 during his training period for his first offense of being late, being absent, disobedience etc. and $20 per offense after. When he could not be contacted for more than a day, SME was given the right to null their contract. After his debut as a member of Super Junior, if his disobedience resulted in damage of less than $5,000 to SME then he was to compensate $5000; if the damage exceeded that amount then he was required to compensate for whatever the damage he caused. He had no right to present his opinion on any matter, and was forced to follow SME’s instructions at all times. The accusation says that Hankyung has lost his confidence due to these reasons.
Due to the fifth reason, Hankyung has not been able to rest for a sufficient amount of time since Super Junior’s debut. The accusation argues that he hasn’t had a break for last 2 years due to his busy schedule. Because the contract enforces heavy financial punishment and automatic extension of the contract length, he had to continue performing in poor health. According to his representatives he suffers from gastritis and kidney problems resulting from high stress, as well as back pain and exhaustion. He frequently asked for a break due to medical reasons but they were all turned down, the accusation claims.
Sixth, he was not given proper rights regarding profit and products of his performance. Rights to all songs and albums belong to SME, even if the song was written by the artist. Profit division was favored towards SME; in case of albums, Super Junior received 2% of the revenue only if the album sold more than 50,000 copies, for digital sales they received 10% of the net profit; for revenue from overseas they were given 60% of net profit. Album sales meant nothing to the artists as 2% of the revenue was divided among 13 members. Digital sales and foreign income were given to artists only when profit was made, allowing SME free from risk of losing money, according to the accusation.
The written accusation against SME argues that due to these 6 reasons, the contract should be voided and Hankyung should be released from his obligations for SME.
Wow! This contract is intense! Can you imagine if you had to pay everytime you were late or were being mischievous?
Article & Photo credit: allkpop