Dispatch recently released an article stating that Bang Si Hyuk's HYBE is not Lee Soo Man's "White Knight" but was Lee Soo Man's one and only exit plan.

SM Entertainment was founded by Lee Soo Man, and "SM" are the initials of his name. The company has been operated over the years with the founder's mindset, "I am Lee Soo Man, Lee Soo Man is SM, and SM is Lee Soo Man."

It is clear Lee Soo Man has contributed greatly to the agency, but it is also evident that he is now holding back SM Entertainment. One example of how Lee Soo Man is holding SM back is the fact that he is set to receive royalties from SM Entertainment until 2092. According to Attachment 2 of the ‘Like Planning Produce License Agreement,’ Lee Soo Man will receive 6% of music royalties until 2092 and 3% of management revenue until 2025, even after the producer contract was terminated.

In other words, Lee Soo Man will be able to gain an additional 80 billion KRW (63 million USD) for the next 70 years, even after the contract between SM Entertainment and 'Like Planning' was terminated. This means SM Entertainment has to pay the money to Lee Soo Man's personal bank account.

HYBE already clarified this aspect after buying Lee Soo Man's stake in SM. HYBE clearly stated that SM's revenue would no longer be wasted in Lee Soo Man's personal wallet. HYBE said, "Lee Soo Man, who terminated his producer contract with SM Entertainment last year on the premise that he would receive management royalties for the next 3 years, will remove this clause of the contract as a demonstration of his willingness to cooperate in the restructuring of SM Entertainment's internal affairs." In summary, Lee Soo Man forfeited the royalties that he was supposed to receive from SM as he sold his 14% stake to HYBE.

Does this mean HYBE will be Lee Soo Man's "White Knight"?

Actually, HYBE is not joining hands with Lee Soo Man, but the company is rather joining hands with SM Entertainment to improve the structural management revisions.

One industry expert explained, "Lee Soo Man reached out for help, and Bang Si Hyuk took his hand. But what needs to be focused on is that through this latest contract (with HYBE), Lee Soo Man's connection to SM Entertainment has been mostly severed." He continued to explain, "For Lee Soo Man that means his profits from SM has disappeared. His shares have been returned to the company and shareholders. What you can interpret from this is that Lee Soo Man relinquished his shares and made an escape."

Regarding Lee Soo Man possibly returning, the industry expert also denied the possibility and explained, "With what justifiable reasons can he participate in the management of SM?"

The current management of SM could no longer stand by and watch Lee Soo Man's unfair profit gains; therefore, they partnered up with Align Partners and sought to improve the operation structure. They chose Kakao as their new partner due to its reputation as a reliable and hands-off partner that was not overly interested in exercising operational control over the company.

With SM 3.0, Lee Soo Man had been driven to a corner, and the best he could do was challenge the new plans and request help from HYBE.

Luckily, with this latest move from HYBE, what the current management and Align Partners have wanted has been ultimately accomplished -  To stop Lee Soo Man's unfair profits and to escape Lee Soo Man's operational structure that was holding the company back. 

After Lee Soo Man reached out to HYBE, Lee Soo Man had no choice but to let go of the SM he had been holding on to. Now the focus is directed to HYBE. HYBE's goal is to normalize SM, and they have declared their commitment to improving structural management revisions while continuing to compete against SM.