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HYBE Sends Open Letter To Fans, Artists, Employees and Shareholders of SM Entertainment
Previously, HYBE positioned the company as the single largest shareholder in SM Entertainment.
On February 10, HYBE signed an agreement to acquire a 14.8% stake in SM Entertainment held by SM’s founder and former Chief Producer Lee Soo-man, worth KRW 422.8 billion.
This acquisition represents a major step by HYBE to integrate the global expertise of both companies to become a game changer in the global music industry.
Below is an open letter of HYBE to respective people that will be impacted by the development.Dear SM Entertainment fans, employees, artists, and shareholders,
I am Jiwon Park, CEO at HYBE.
I am pleased to share that today, February 22, 2023, HYBE completed the acquisition of a 14.8% stake in SM Entertainment (“SM”) held by SM’s founder and former Chief Producer Lee Soo-man, and became the single largest shareholder in SM.
As promised on February 10, HYBE resolved the governance issue between former Chief Producer Lee’s and SM, during the course of the share acquisition. SM will be moving to become a company with a transparent governance structure that prioritizes shareholder value.
I would like to share more details on the similarity between HYBE and SM’s corporate philosophy, and the synergy we can collaborate to create in the coming future.
Collaborative Innovation based on Mutual Corporate Philosophy
As K-pop industry leaders and pioneers, both HYBE and SM have been triumphing on the global stage. HYBE’s vision to become a leading global entertainment lifestyle platform company under its mission “we believe in music” is closely interconnected with the goal of SM 3.0 to ‘leap forward as a fan- and shareholder-centered global entertainment company.’ Additionally, integrating HYBE and SM’s creative capabilities and content-oriented culture will showcase a historic innovation in the global scene.
Allowing Complete Autonomy of Creative Work based on a Multi-Label System
HYBE has been successfully operating its multi-label system by giving autonomy to respective labels. Our key factor behind the success is to guarantee complete autonomy over the creator’s work with passion. HYBE does respect SM’s legacy and creative values. We will share our business model and networking capacities with SM to help its distinct, creative work lead the world.
Leaping Forward as a Game Changer on the Global Stage
Leveraging our expertise and global network, HYBE will actively support SM artists’ endeavors in making a presence in the global music industry. Both companies will work together towards establishing the global ground where our artists can introduce their music. We can share the experiences that have ultimately led us to our leading position in the global K-pop scene including the United States, South America, and India. HYBE will also be able to benefit from SM’s wealth of experience from their artists’ success in China, Japan, and Southeast Asia. With our collaborative effort, we can become the most innovative game changer in the global music industry.
Two leading fandom platforms, HYBE’s Weverse and SM’s Bubble, will expand beyond Korea and compete in the global arena. We will also create new opportunities leveraging the two companies’ capabilities in solution business pipelines, from concert, distribution, and original story IP to business development.
The global music industry is undoubtedly paying close attention to K-pop and its international success. Yet it still has so much possibility to reach a greater fanbase with more content and experiences to offer. K-pop flourished in an environment where we could challenge ourselves. We should conserve the ground so that we can stand shoulder-to-shoulder with the world’s major record labels.
Last but not least, I am aware of the concerns that fans, artists, employees, and shareholders of SM have, due to rumors and speculations around the company. HYBE fully respects the direction laid out in SM 3.0 growth strategy, as well as the value and vision SM’s employees and artists have created.
I would like to express my regret to SM artists, who may have been troubled by the turn of events. We respect SM’s artists as much as we do our artists at HYBE. Leveraging the expertise we have accumulated, we will do our best to create a brighter future for all artists under SM.
This is an era of change for both companies. We wish any short-term business decisions or prejudgment by some leaders would no longer cause confusion and uncertainty. I hope the management can come to a wise and reasonable conclusion to ensure that our shared visions and business directions are on the right track.
As stated in our DNA, ‘Win Together,’ HYBE is full of winning spirits on succeeding together. We hope to enjoy more success with fans, employees, artists, and shareholders of SM in the coming future. If we work side by side, we can continue to lead K-pop’s global phenomenon.
Thank you.
Sincerely,
Jiwon Park
PR Source: HYBE
