Why is SM's Lee Soo-man stepping down? Founder to not produce for his artists anymore
With Lee Soo-man being paid over $100 million for royalties, insiders think that SM's shareholders are not happy
SEOUL, SOUTH KOREA: Like any other industry, the K-pop industry has a hierarchy with some companies being in the forefront of the business. And SM Entertainment happens to be one of them. Founded by Lee Soo-man in the 90s, SM was always part of the Big 3 K-pop Labels (SM, YG, JYPE) and also continues to be part of the Big 4 K-pop Labels with the addition of HYBE. Lee happens to be responsible for a majority of SM's success from their innovative virtual concepts to pushing his artists to a global level like the creation of Super M.
However, on September 15, it was reported that SM would be firing Lee Soo-man as they would be terminating their contract with his private company. Since its inception, Lee has had several active roles in his company from being part of the board of directors to his personal production company Like Planning having the largest shares. Apart from producing for SM groups in terms of music and management, Lee Soo-man has also branched out and worked with other K-pop acts like Loona.
Founder Lee Soo-man to step back from SM
But Lee Soo-man getting fired is not the whole truth. Following several rumors of discord and whether this move was to hide embezzlement, SM released a statement. They clarified that they were considering terminating Lee's producer contract as that was his wish for several years. On November 16, SM said, "Out of concerns...of the company's existing rookie teams...SM Entertainment has continuously requested that Lee Soo-man remain in his role until such groups rise to stable positions."
It has been shared that since the current artists can now resume global promotions and their profits are under a strong management, Lee Soo-man wishes to step back. They added, "He is certain that his talented junior producers at the agency are capable of carrying on the growth and prosperity of SM Entertainment. On top of that, some shareholders at SM Entertainment have expressed their demands for Lee Soo-man to step down from his role, and producer Lee would like to humbly answer those demands."
As the main in-house music producer and executive producer of SM, the company has been outsourcing their artists' release to Lee Soo-man's Like Planning which is technically a subsidiary of SM. For his contribution, SM has been paying millions of dollars to Like Planning as royalties. Till the third quarter of 2021, SM has outsourced to Like Planning and paid them a whopping $102 million. Since this information was revealed by stakeholder Align Partners, many think there is opposition to the excessive royalties given to Lee's private company which could have influenced the termination decision.
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