As the expiration of BLACKPINK’s contract with YG Entertainment approaches on August 8, entertainment investors are eagerly awaiting an announcement.
However, it seems unlikely that a decision will be made before the conclusion of BLACKPINK’s ‘BORN PINK‘ world tour scheduled in the United States from August 11 to August 26. Speculation suggests that the announcement might even be postponed until after September, leading to uncertainties about the contract renewal.
Considering BLACKPINK’s debut date is August 8, 2016, the expected time for the contract announcement is on August 8, 2023. Given that it is estimated that BLACKPINK receives 80% of the operating profit while YG receives 20%, industry insiders have expressed interest in re-evaluating the company after the contract renewal announcement.
In situations where there are differences of opinion between the company and the artist, it is common for general worker contracts to be extended with existing conditions until the expiration, followed by a delayed announcement. Therefore, it is carefully observed whether BLACKPINK will indeed announce the contract renewal after the 8th of this month, as rumored.
A YG Entertainment official mentioned that an early agreement might be possible, but due to the already scheduled world tour performances, the current contract will likely be maintained until at least the end of August. The official also referred to a previous instance with boy group iKON, where the contract renewal status was announced three months after the estimated expiration date (Debuted in September 2015 and the decision to depart YG was announced on December 30, 2022).
While some in the stock market interpret the concert scheduled at the end of August as a positive signal for contract renewal, rumors have surfaced about individual members, such as Lisa, Jennie, Jisoo, and Rosé, potentially exploring opportunities with overseas entertainment agencies or even setting up their own personal agencies. However, no official confirmation has been provided by the members.
Interest is growing in the size of the contract renewal with BLACKPINK. Analyst Cha Yu Mi from Mirae Asset Securities estimates the down payment per member to be around 1 billion to 1.5 billion KRW (769,036 USD~1.15 million USD), based on previous deals with Big Bang and TWICE. BLACKPINK’s global popularity may influence this figure, but its impact on the company’s profitability is limited due to the group’s strong ticket-selling power.
It is worth noting that profit distribution between the company and the artist usually shifts in favor of the artist after contract renewal, often exceeding 80% for the artist and 20% for the company. While this raises concerns, industry insiders explain that, as an artist’s profits grow exponentially after a few years of activity, the overall benefits outweigh the decreased company share during contract renewal. Moreover, from a symbolic perspective, renewing the contract could have positive implications for the company’s stock price.
Korean netizens are also taking an interest in BLACKPINK’s contract renewals and commented, “Shouldn’t YG be begging them to renew? Their profit is dependent on BLACKPINK,” “YG is basically BLACKPINK at this point they better hope BABYMONSTER is popular if they leave,” “They’re not even paying them that much for contact renewal,” “Isn’t 1.5 billion KRW too low?” “The downpayment amount is lower than I thought,” “YG really needs to offer them a lot more to keep them in my opinion,” “I think the ratio for their settlement in the future is more important than the initial contract payment,” and “I don’t think the members would lose popularity so suddenly if they go their own separate ways so I think they should find somewhere that would give them more benefits.”
