On October 21, a topic titled “HYBE IM’s 4 Billion Internal Transaction with Ador Amid Dispute (NewJeans Settlement Issue)” was published on the Korean forum theqoo.
The topic quoted a news article, which mentioned a suspicious internal transaction of money from ADOR to HYBE IM – the conglomerate’s game subsidiary.
In particular, the article started by saying that according to industry sources, it was reported in late September that 4.2 billion KRW (approx 3 million USD) of internal transactions took place between ADOR and HYBE IM during the third quarter of this year.
Among those, HYBE IM took 4.1 billion KRW (approx 2.9 million USD) in revenue from ADOR, while ADOR only recognized 90 million KRW (approx 65,000 USD) from HYBE IM.
The only explanation provided by both companies for the transaction was related to game royalties. However, there are suspicions that HYBE might be inflating new business revenue by leveraging ADOR, which has seen a surge in sales due to NewJeans.
In typical cases where an artist under a HYBE label appears in a game, the label should recognize revenue from royalties or copyrights. However, in this case, the roles are reversed, with ADOR basically paying HYBE IM for its game services.
Last August, HYBE IM updated its game “Rhythm Hive” to include NewJeans. Since NewJeans is managed by Ador and HYBE IM used their intellectual property (IP), ADOR should have been the one to recognize the revenue.
An industry insider pointed out, “HYBE is already trying to take tens of billions of won in quarterly revenue from Ador, and HYBE IM, which hasn’t yet stabilized, is recognizing revenue under unclear circumstances. If this structure continues, it could reduce the settlement amounts that artists are entitled to, leading to further issues.”
Responding to this, a HYBE representative stated, “It is difficult to confirm specific details regarding internal transaction disclosures.”
As a result, many netizens are suspecting HYBE of stealing money from NewJeans’ company to inflate its game subsidiary.
Below are some comments from netizens:
- Wow… So that’s why they were trying to kick Min Hee-jin out. To spend the money however they wanted.
- They needed a leader who would do as they was told without making a sound,, but Min Hee-jin didn’t do as she was told and was like a thorn in the eye, so she was kicked out
- It seems like they only took care of the representatives of the labels and took all the profits from the artists.
- This is so f*cking shady
- I think ADOR has held up well in a company that has been running like this.
Source: theqoo
