Recent reports suggest that entertainment giant HYBE may face a significant financial loss if its subsidiary, ADOR, parts ways with the popular K-pop girl group NewJeans. Estimates indicate that the company could lose up to 35 billion KRW should the group decide to leave due to ongoing internal disputes. The group, known for their immense success and global fanbase, plays a crucial role in HYBE’s projected revenue.

Financial Impact of NewJeans’ Departure

According to a report from NH Investment & Securities, a major financial analysis firm, the departure of NewJeans could result in a considerable drop in HYBE’s profits. The firm downgraded its target share price for HYBE from 280,000 KRW to 270,000 KRW, a 4 percent reduction, after excluding NewJeans’ future activities from their financial forecast. These activities include a full-length album, world tour, and other music releases that were originally scheduled for the second half of 2024 and 2025.

In the report, it was estimated that NewJeans’ projects would have contributed 10 billion KRW in operating profit for the second half of 2024 and an additional 25 billion KRW in 2025, making up a total of 35 billion KRW. The absence of this income would create a significant gap in HYBE’s financial performance.

Lee Hwa Jeong, an analyst at NH Investment & Securities, stated, “Assuming the worst-case scenario with a conservative approach, we have lowered the company’s performance estimate under the premise of NewJeans’ absence.”

Internal Conflict and Min Hee Jin’s Role

The financial uncertainty surrounding HYBE stems from an ongoing conflict between the company and Min Hee Jin, the former CEO of ADOR. Min Hee Jin, who played a pivotal role in the formation and management of NewJeans, was removed from her CEO position following a legal dispute with HYBE‘s board of directors. Her removal has caused friction between the group and HYBE.

In response to Min Hee Jin’s dismissal, NewJeans held an emergency live broadcast, demanding her reinstatement. The group gave HYBE an ultimatum, insisting that Min Hee Jin return to her position as CEO by September 25, 2024. However, the new management at ADOR, led by Kim Joo Young, who replaced Min Hee Jin as CEO, stated that the decision to remove her was made by the company’s board of directors and would not be reversed.

While Min Hee Jin remains a key figure within ADOR, serving as the inside director for NewJeans for the next five years, her absence as CEO could continue to strain the relationship between the group and the agency.

Potential Fallout for HYBE

The possible departure of NewJeans from ADOR would not only impact HYBE’s financial forecast but could also affect its reputation. As a leading K-pop company with globally successful groups, including BTS and SEVENTEEN, HYBE has a vested interest in maintaining its roster of artists. Losing NewJeans, one of its rising stars, could lead to further consequences, including fan backlash and investor concerns.

The financial analysts’ conservative predictions highlight the uncertainty surrounding HYBE’s future profits. The removal of NewJeans’ projects from the company’s revenue projections signals that HYBE might need to explore alternative ways to offset the potential loss.

For now, it remains unclear whether NewJeans will continue their journey with ADOR or seek a different agency. What is certain is that the situation has sparked intense speculation within the K-pop industry, with fans and investors closely watching how HYBE navigates this critical period.

For more updates on NewJeans’ situation and the future of HYBE, tune in to Vviptimes.

Source: Korea JoonAng Daily