YG Entertainment (hereafter YG) is comparable to other major entertainment companies in terms of employee numbers and scale. However, while other companies operate like well-oiled machines with sequential album releases, tours, and rookie debuts, YG appears to be functioning with a missing gear. If that missing gear continues to be Yang Hyun-suk, who remains embroiled in legal risks, YG’s future would look bleak.
YG’s desperate clinging to BLACKPINK clearly reveals its crisis. Although BLACKPINK members have moved on to different agencies, YG needs them more than ever during this content drought period.
It’s no exaggeration to say that BLACKPINK has been YG’s breadwinner for the past several years. They contributed an absolute majority to sales, and particularly last year, some securities firms analyzed that BLACKPINK’s contribution to operating profit exceeded 85%. Since BLACKPINK’s departure from the company this year, YG has been struggling, and securities firms predict that YG’s third-quarter operating profit will turn to a deficit.
Nevertheless, they maintain positive forecasts for next year’s performance, and BLACKPINK is the reason behind this optimism. Although BLACKPINK members left YG last year, they agreed to continue group activities under YG. With their full group activities scheduled for next year, securities analysts have issued favorable forecasts. Ironically, YG, considered a major entertainment company, now rises and falls with a single group that has already left the company.
Before and long after BLACKPINK’s contract expiration last year, YG consistently said that they were “in discussions.” Their desperation to retain BLACKPINK was evident. As a result of this desperation, although they lost the individual members, they managed to secure the group activity contract.
This outcome was somewhat anticipated. While all members have the capability and popularity to perform globally as soloists, they understand that their impact is far greater when performing as BLACKPINK. However, performing as BLACKPINK would be impossible without YG, which owns both the team name and song IPs. Although YG might have wanted more, this was the extent of what they could achieve.
Nevertheless, this allowed YG to barely survive what could have been a company-threatening crisis. While specific contract terms regarding duration and activities remain unknown, it appears to include world tours, their biggest revenue source.
Since September, YG has been actively promoting that “BLACKPINK plans to meet fans worldwide through a full group comeback and a world tour in 2025.” The announcement seems abrupt and inconsiderate of the members who are actively pursuing their solo careers, as it lacks specific timing details. This makes YG appear rather desperate.
The timing of YG’s announcement becomes more understandable considering that YG’s stock price was precariously close to its 52-week low of 30,000 won. Subsequently, YG’s stock price rose by more than 20% within a month.
The problem is that YG still lacks strong cards beyond BLACKPINK. Boy group TREASURE achieved their first million-seller with their second full album “REBOOT” last year when K-pop album sales were at their peak, but they haven’t released an album in over a year since then. This pace is notably slow compared to other groups who release at least one album annually while conducting world tours.
They did release a digital single “KING KONG” in May, but it only reached a peak position of 713 on Melon’s daily chart. Their only achievement this year was successfully completing their second Asia tour, but its scale still significantly lags behind competing companies’ representative boy groups.
Essentially, YG went “all-in” on their rookie girl group BABYMONSTER this year. BABYMONSTER released a single in February, a mini-album in April, and a digital single in July. They are set to release their full album on November 1st. While their performance hasn’t been poor, it hasn’t been sensational either. The extreme confidence shown by Chief Producer Yang Hyun-suk before their debut now seems somewhat embarrassing.
Consequently, YG has failed in their generational transition this year and hasn’t secured new revenue streams. While they seemed to gain momentum after Yang Hyun-suk’s return as chief producer following a delayed launch of new groups, YG’s two years under his leadership have been marked by more talk than substance. If anything, their system appears to have regressed.
In addition, having failed to properly prepare for the future during BLACKPINK’s prime, YG now faces an absolute shortage of noteworthy content. Recently, YG somewhat unexpectedly showcased a full group concert for 2NE1, which disbanded over seven years ago. While this was welcome news for fans and generated considerable buzz, it also demonstrates YG’s lack of fresh content.
Meanwhile, Yang Hyun-suk continues to struggle with legal risks. He was indicted for overseas gambling charges in 2019 and fined 15 million won, and he is currently on trial for allegedly covering up drug use and purchase allegations involving B.I, the leader of group iKON. Last year, the appellate court found Yang Hyun-suk guilty and sentenced him to six months in prison suspended for one year, but Yang Hyun-suk’s side has appealed.
Furthermore, Yang Hyun-suk was indicted at the Seoul Western District Court last month. The Busan District Prosecutors’ Office charged him for evading taxes on luxury watches worth hundreds of millions of won received as gifts overseas. Prosecutors had indicted Yang Hyun-suk after questioning the recently entered company representative. Amidst this, it was belatedly revealed that his wife, Lee Eun-joo, had previously received criminal punishment for drunk driving.
Source: Daum
