Why might K-pop’s SM Entertainment sever ties with founder and chief producer Lee Soo-man?

Lee, who founded SM Entertainment in 1995, has been integral to the forming of modern K-pop, producing acts including Girls’ Generation, Exo and Aespa

Shares in SM Entertainment jumped after it announced plans to terminate its multimillion contract with Like Planning, a music production company owned by Lee

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Lee Soo-man is the founder of K-pop media company SM Entertainment. Shares rose after it announced it is seeking termination of a contract with Lee. Photo: SM Entertainment

Published: 7:00pm, 20 Sep 2022

SM Entertainment announced on September 16 that it may sever official ties with its chief producer Lee Soo-man.

Lee founded the South Korean media company in 1995, and has been integral to the forming of the modern K-pop industry, producing acts including Girls’ Generation, Exo and Aespa.

SM Entertainment plans to terminate its contract with Like Planning, a music production company owned by Lee.

SM Entertainment has spent the past few years being questioned by investors on its 20-year commitment with Like Planning and the millions of dollars – around 6 per cent of SM’s annual revenue – that are paid annually to Lee.

Lee founded the South Korean media company in 1995, and has been integral to the forming of the modern K-pop industry, producing acts including Girls’ Generation. Photo: SM Entertainment

Following the announcement of the planned shift, shares in the company jumped an equivalent of nearly US$10, before dropping slightly, as investors aimed to be part of the company’s new shape.