Analysts say that SM Entertainment, which has led the domestic K-pop market, has recently taken a major hit with the resignation of its founder Lee Soo-man, a major shareholder, due to a sense of crisis that it is difficult to maintain market dominance without him. transformation.
As of noon on the 6th, SM’s market capitalization is about 2.2 trillion won, ranking third in the market after Hive (about 7.9 trillion won) and JYP (about 2.6 trillion won). Led by HOT, who opened the era of the first generation idols, SM, who produced famous K-pop stars such as Shinhwa, SES, TVXQ, BoA, Girls’ Generation, and EXO, missed the title of ‘No. 1 company’ for not was most of the period since listing in 2000 However, in the late 2010s, as the 3rd generation idol market led by BTS and Twice blossomed, they repeatedly tossed and tossed with JYP in terms of size which was lost.
Comparing the annual album sales of 2012 and last year, 10 years ago, shows the reality that SM is facing. In 2012, according to the Circle Chart, among the ‘Top 5’ in annual album sales, there were three teams from SM, including Super Junior, who took first place, followed by TVXQ (3rd) and SHINee (5th). However, last year, NCT Dream saved face by recording 5th place with their second album ‘Glitch Mode’. There was a difference of about 1.4 million copies of BTS’s ‘Proof’, which came first. For this reason, there was a high awareness within the company that it needed to improve its composition by sharpening its bones.
Singer and actor Kim Min-jong, who worked for SM for 17 years, sent an email to all SM employees the day before, claiming, “The production and sensory abilities of a teacher (Lee Soo-man) are needed ) on SM artists,” but it is also true that there were not many repercussions among the staff. For this reason, it is analyzed. Rather, among the employees, there is said to be an atmosphere of heightened expectations for the vision of ‘SM 3.0’, which the management recently announced as the main content of the ‘Lee Soo-man production’.
In an article posted on a blind app for office workers, an SM employee said, “As we enter the age of the 4th generation (idols), I feel that the governance is not as sophisticated as a company with songs, concepts, marketing, and capitalization a market in the trillions.” It’s the same. Don’t get drunk on past glories and be awake.”
Lee Soo-man, the main shareholder, has led the company as the general producer for 27 years since the company was founded in 1995. After stepping down as a registered director in 2010, he did not receive an official salary from SM, but rumors persisted as he took over 20 billion earned in the name of production through a private company Like Planning.
From 2021, the amount taken by the main shareholder Suman Lee through Like Planning reached 24 billion won, which is about 1/3 of the annual operating profit. For this reason, Align Partners Asset Management (hereafter Align), which represents minority shareholders, has been constantly demanding systemic reform from SM. In March last year, Align managed to appoint Kwak Jun-ho, the candidate they recommended, as an auditor, beating the management candidate SM, causing a crack in the strong ‘Lee Soo-man fortress’.
Even after that, Alignment put pressure on SM by asking for ▲ the establishment of a compensation committee within the board of directors ▲ the publication of future production plans ▲ the composition of the majority of the board of directors as outside directors, and in the end, SM accepted the part It included directors, established an insider trading committee, and promised to return at least 20% of its separate net income to shareholders for three years. Major shareholder Lee Soo-man expressed his intention to step down during this process in September last year, saying, “As a major shareholder, it is my duty to humbly accept the opinion of minority shareholders to give the all the best.” With the announcement of the music production reorganization plan, Lee Soo-man’s resignation became a reality.
With this reorganization, SM expects to significantly reduce the new first cycle from 3.5 years to ‘more than 2 teams per year’ and increase the number of album releases per year by 30% from 30 to 40 or more. In the process of producing Lee Soo-man’s ‘One Top’, the production process of the album, which had to be delayed, was quickly changed to keep up with the competition.
It’s a strategy. Through this constitutional amendment, SM expects to achieve 18 million album sales this year, an increase of 4 million compared to last year.
The stock market also responded to SM’s changes. On the 3rd, when the resignation of major shareholder Lee Soo-man was announced, SM’s stock price rose 2.13% based on the previous day’s closing price. Daol Investment & Securities released a report raising the target stock price of SM from 102,000 won to 120,000 won.
YTN Jaehyung Kim (email@example.com)
[저작권자(c) YTN 무단전재 및 재배포 금지]