TVXQ's penalty for breach of contract estimated to be over 121 million USD

[douchecannon.livejournal.com]

ZAKZAK, an online news portal associated with Sanspo, one of the largest newspapers in Japan, recently published an article on February 5th estimating the penalty cost for TVXQ's breach of contract at 10 billion JPY (approximately 121 million USD).

The article made reference to the difference between the Japanese and Korean industry, or more specifically, particular terms and clauses within TVXQ's contract which were considered "shocking." The terms referred to were where "all rights and privileges that the group get from TV programs and stage performances, as well as public activities in and outside of Korea, belong to the production company." It was also stated that the decision meant "all copyrights, including the copyrights for lyrics, music, arrangement, reproducing right, duplicating right, recording right, distributing right, broadcasting right, performing right, karaoke distributing right, and the right to produce secondary products, are all transferred to the company."

An unnamed expert official explained that, "In Japan, artists are paid a part of their singing right, and copyrights of lyrics, music and arrangement. At that time, among the 5 members, each of them were paid 0.4-1% of their profits. Moreover, if they were not able to sell more than 50,000 copies, then there would be no guarantee for their pay."

Perhaps what was most shocking was the amount of the penalty should there be a violation of the contract. ZAKZAK outlined the amount at 3 times the investment made into the group, plus twice the profit expected to be made in the remaining years of the contract duration. The cost to JYJ for breaching the contract was estimated at "more than 10 billion JPY (121 million USD)."

Diplomatic as always, the Japanese article reasoned that this was the way things were done in the Korean entertainment industry: to invest heavily in their idols, and as a result, bind them with long-term contract and to continue training them. "It may be difficult for the Japanese to understand, but this is the way the Korean wave is taking over Asia."

Source: ZAKZAK and onetvxq

Comments

[kiiddkarma.livejournal.com]

Thats a helluva lot of money.

[greenteafroyo.livejournal.com]

omg crying irl it's so much ide

cassiopeia+bigeast's plan to buy them out of the contracts is foiled!! each member would have to pay $121 !!! :c

[audiograms.livejournal.com]

doable. I'd pay that.

[baboboy.livejournal.com]

go sign a check for them.

[jenna-lovesyou.livejournal.com]

.....holy shit.

[rosetta16.livejournal.com]

Thats a lot of money.....

[yekaste.livejournal.com]

that's alot of money..

[captainmarvel.livejournal.com]

fuck....

[copys.livejournal.com]

[yasmine2009.livejournal.com]

LMAO!

[rosetta16.livejournal.com]

we are yalking about JYJ right? JYJ willhave to pay this if they lose

[ren-squared.livejournal.com]

if their contracts are ruled invalid i don't think they have to pay anything back to SM

idek

[ren-squared.livejournal.com]

[yamapilovergyal.livejournal.com]

FUCK YOU SM. u motherfuckers D< burn in hell

[tellykins.livejournal.com]

kind of my reaction.

[rawrboysmode.livejournal.com]

yeah thats just fucking ridiculous.

[captainmarvel.livejournal.com]

you haven't been on Twitter all day D:

[honeyfunnybunny.livejournal.com]

oh my god...........

[dongsaeng.livejournal.com]

i'm probably going to get killed for this but.. as unfortunately high as that number is, they signed a contract, right? at the root of it all, they knew what would happen with the decisions they started to make. just saying.

in any case, ouch.

[psychtiger.livejournal.com]

That is why people are calling them "slave contracts".

[hybridchickens.livejournal.com]

holy crap on a cracker

[hybridchickens.livejournal.com]

plus twice the profit expected to be made in the remaining years of the contract duration

.... this goes against all my values and beliefs in contract law. if someone breaches a contract, the "victim" should be entitled to the position they would have held had the contract gone through. DD:

also smh at 3x the investment.

this is obviously sm using all their means to prevent them from leaving before term was up.

if sm wins this (and the damages set out in the contract), my sense of values will be so offended i cant even tell you. :/

[cake.livejournal.com]

Holy shit that's a lot of money! D:

(http://tinypic.com?ref=lk7tk)

[ashiva.livejournal.com]

Even if JYJ didn't win their case against SM, the court will probably rule that their contract breech sum is way too high and lower it considerably according to that earlier FTA ruling. In any case we won't see the end of the lawsuit any time soon, because the losing party will most likely appeal.

[rosetta16.livejournal.com]

I was about to write this!!! Lol

[gardenintheair.livejournal.com]

all that money money money just make it out to cash

on a serious note... just whoa. boys u r in danger, sorta.

[taylorniw.livejournal.com]

I know it's horrible but I'm laughing

[831panda831.livejournal.com]

oh god... I hope they don't lose

Question! : How long will they be given to pay that off and what happens if they can't ;~;

[ashiva.livejournal.com]

They can probably file personal bankruptcy as Korea is one of those lucky countries that has that option (in many countries only firms can do that).

[notochrasy.livejournal.com]

"It may be difficult for the Japanese to understand, but this is the way the Korean wave is taking over Asia."

lol, up on their high horses there.


Okay, no. Tbh, yes 121 million USD is a lot of money. And even without articles like this we can all probably estimate that a breach of contract would of course lead to quite a large monetary penalty, not to mention it has to subsidize whatever losses that have been estimated/calculated/whatever within the duration of the suspended activities due to the lawsuit.

But seriously, these constant waves of articles about the breach of contract isn't exactly new information. I'm not sure about the actual content of the original Japanese article (since I can't understand Japanese), but just from the article posted here, it seems to me that what is really illustrated isn't just how crazy big the penalty is... I feel that sometimes (especially with these TVXQ articles from Japanese journalists) all of this is just used as an excuse to further draw ~differences~ between the Korean and Japanese entertainment industry. And I get annoyed because I like both countries, and their entertainment industries and it's just so frustrating when there are these (not referring to any specific article, just in general) articles from conservative Japanese writers that just don't like the proliferation of the Hallyu wave. So ehhhhhhhhhh.

yeah sorry for the tl;dr comment -___-

[nandexdame.livejournal.com]

Why remove that sentence from the context of the entire paragraph? What was said was true.

[inudela.livejournal.com]

i really hope this is some majorly overstated estimation because dayyyym

[taylorniw.livejournal.com]

Oh, by the way, is that as a whole or is that 121 million per MEMBER?

[lapetite-indigo.livejournal.com]

scary thought

[rosetta16.livejournal.com]

i agree 100% with this
"but this is the way the Korean wave is taking over Asia."

[erbalurbal.livejournal.com]

Honestly that isn't unusual and I expected it to be high. Most companies will make you pay for loss of income for each year left on your contract. Didn't they bring in over 100 million as dbsk in one year?

[ghost-whisper.livejournal.com]

3 times the investment made into the group, plus twice the profit expected to be made in the remaining years of the contract

Paying losses is one thing - paying three times the investment (because companies take more trainees *knowing* many will never debut) and double the expected profits is another.

I agree though - not surprised that it's high, considering how popular DBSK is. Still, it's an unconscionable amount, and paying *more* the more popular you get just penalizes you for doing your job well for the company, assuming you ever wanted to leave.