HYBE IM who took 4.1 billion won in sales through ADOR-Krafton collaboration (Battlegrounds) - Affecting a reduction in NewJeans' settlement amount

 [theqoo - hot] HYBE IM, 4.1 billion won in sales through ADOR-Krafton connection (Regarding reduction in artist settlement amount)

date: 24/10/2024

[Dealsite Reporter Kim Ho-yeon] 

It has been confirmed that the 4 billion won internal transaction that occurred between HYBE IM, an affiliate of HYBE, and ADOR was due to collaboration between Krafton, the game Battleground operator, and ADOR's group ‘NewJeans’. There is criticism that HYBE IM, which focuses on game development and publishing, might have excessively priced the licensing revenue during the process of connecting ADOR to Krafton. This has led to accusations that HYBE is engaging in a form of "preferential treatment" within its group.

According to the investment banking (IB) industry on the 22nd, the 4.1 billion KRW in internal transaction revenue recently disclosed by HYBE IM from ADOR is part of the earnings from the collaboration between ADOR and Krafton, related to NewJeans-themed items.

A HYBE IM official explained, "We disclosed the sales recognized as a result of the collaboration between Battleground and NewJeans," and "It is difficult to confirm any matters other than what was disclosed."

It has been reported that 40% of the profits generated from this collaboration between Battleground and NewJeans went to HYBE IM. 

There are also opinions that the portion of sales taken by HYBE IM is excessive compared to the business capacity. Leading to further criticism that it is a case of preferential treatment. An industry insider pointed out that, "Despite not properly managing this project, HYBE IM recognized earnings equivalent to 13.3% of last year's revenue," and "Over-allocating revenue to HYBE IM, a newly established subsidiary, could reduce the settlement amounts for artists under the label, which could have a long-term negative impact on the company's growth."

However, there are also counterarguments that the internal transactions conducted under HYBE should be viewed as part of normal corporate management as they do not violate the current law. Some argue that "the judgment of the quality of services provided between affiliates is also subjective," and that "the evaluation of the performance of the collaboration service has already been shown as profit, and it is reasonable to view this as simply being distributed through a contract."

https://dealsite.co.kr/articles/129991

original source

COMMENTS

• Even if it's the parent company, they can't just take money from a subsidiary that's an independent entity, so they likely create fake statements to take it. They need to undergo a tax investigation. Everything's connected—this whole 'separation of management and production' thing is just lip service, and it's clearly a case of preferential treatment within the group. If a tax investigation happens, things would probably unravel before they even start digging

• These little f*ckers, what did they do to deserve 40%? What the f*ck?

• Look at these thieves

• I don't know if HYBE IM participated in the production, but the design was done by ADOR staff and the production was done by Krafton, so why on earth are they taking 40%? ㅋㅋㅋㅋㅋㅋ

• No matter how I think about it, it just doesn't make sense that they took 4 billion won through an internal transaction unless they were involved from the development stage. PUBG has already done tons of collaborations with celebrities, right? So what kind of extraordinary technical consulting did they provide to justify taking 4 billion won?

• This is crazy 40%? Are they thugs? ㅋㅋㅋㅋㅋㅋ

• NewJeans got ripped off, damn. If they just take it and call it an intermediary fee, it’s 100% going to affect their settlement

• ㅋㅋㅋㅋㅋㅋ If the intermediary fee is 40% of the revenue, who would even bother paying that and still work? If this were my company, there’s no way I’d go through them; I’d just handle it directly. This system is seriously messed up

• What did HYBE have to do with the collaboration's success? ㅋㅋㅋㅋㅋㅋㅋㅋㅋ They're really stealing the subsidiary's profits. And you call this an independent label?

• They are f*cking thugs, it wasn't even their production so why are they taking 40% of it?

• What do you mean they took it? They're just like a robber

• These f*cking punks, what are they doing? They say ADOR is an independent corporation, but they're taking all their money.

• If they're going to take 40% as a commission, what's the point of even having a label? It would be way more profitable to collaborate with another company. This is exploitation of labels, and it’s not even their own game—they didn’t even make it, someone else did. These guys are total scumbags. Since this affects the settlement too, if NewJeans sued, wouldn’t they win? They should get everything back and leave HYBE for good. And isn’t Kim Joo-young, who let this slide, guilty of breach of duty? ㅋㅋㅋㅋㅋ

• Does HYBE IM even have any games? They promoted Become a Star 2 like crazy, and it completely flopped... Are they extorting money to cover up that failure?

• A place like this is a top company?

• They didn't take it off the Net Profit, but 40% of Sales?

• 40%????? This is just the parent company blatantly ripping off its subsidiary.

• No, does it make sense to take 40%? Isn't that crazy?

• I really don't understand why HYBE IM is involved here ㅋㅋㅋㅋㅋㅋㅋㅋ

• They harass people who are good at their jobs and then take their profits?