How much will NewJeans owe HYBE if they break the contract?

Amidst the news of NewJeans sending a certified letter to ADOR, warning that they would terminate their exclusive contracts if their demands were not met, Korean netizens have directed their attention to how much the group would need to pay if they terminated their contract.

The specific contract terms for NewJeans, who debuted in 2022, have not been disclosed. However, according to the standard exclusive contract guidelines set by the Fair Trade Commission, the penalty fee for contract termination is calculated by multiplying the monthly average revenue from the last two years by the number of months remaining in the contract.

According to previous reports, ADOR recorded sales of approximately 190 billion KRW (125.6 million USD) over the 24 months from the second half of 2022 to the first half of this year. Given that ADOR's revenue relies solely on NewJeans, this amount can effectively be considered as NewJeans' sales revenue. Based on the Fair Trade Commission's standard exclusive contract guidelines, the estimated penalty fee would exceed at least 300 billion KRW (~214.1 million USD).

Furthermore, if NewJeans were to operate independently, there is also the issue of having to forfeit their group name and related intellectual property (IP). Since ADOR and HYBE hold ownership of NewJeans' IP, the group would likely need to promote under a new name if they were to become independent. Ultimately, given the current circumstances, it appears that separating from HYBE would not be an easy feat for NewJeans.

Despite the high cost for the group to terminate their contract with HYBE, many Korean netizens are encouraging the group to leave the agency. 

Korean netizens commented:

"The girls can pay 300 billion KRW and leave HYBE."

"The fees probably went up by now. It's going to be 900 billion KRW (~642.3 million USD)."

"That's so much." 

"HYBE should be paying the fee because they didn't do their part."

"They won't pay the fees."

"Min Hee Jin's going to cut off NewJeans when she sees that amount."

"HYBE has to be paying that 300 billion KRW."

"That amount is impossible to pay."

"Please leave the company though."

"HYBE has no money. NewJeans and Min Hee Jin were the ones earning money for them."

"That's so much..."

SEE ALSO: Three NewJeans members are asking for Min Hee Jin to be reinstated as producer as a ‘condition’ for their return to the group, according to industry insiders