Structure of an Exclusive Management Agreement for a K-Pop Artist (Standard Form Contract)

Posted by Joseph Hwang Joseph Hwang 7/19/2024

Structure of an Exclusive Management Agreement for a K-Pop Artist (Standard Form Contract) - Part 8.

Joseph Hwang

* Attention: This article is based on the latest version of the “Standard Form of Exclusive Contract for Musicians (hereinafter referred to as “SFEC,” Notice No. 2024-0021, Ministry of Culture, Sports and Tourism of the Republic of Korea, amended on June 3, 2024).”

** Contract parties: Artist (hereinafter referred to as “Artist”) and artist management company (hereinafter referred to as “Company”)

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“Article 7 (Character Education and Mental Health Support for “Artists”)

① The Company shall provide the necessary education for the “Artist” to acquire the qualities and character of a popular culture artist and shall faithfully fulfill the obligations imposed by applicable laws regarding the provision of education for popular culture artists.

② If the “Artist” is found to be depressed, the “Company” may support appropriate treatment with the “Artist’s” consent.”

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Article 7 of the SFEC defines one of the contents the “Company” will provide to the “Artist.” However, this provision is not mandatory, and it is essential to note that if a Company fails or neglects to fulfill its obligation to provide support to an Artist under this provision, a court may presume that the Company did not act in good faith in the event of a dispute with the Artist.

This provision in the SFEC is based on Article 7-②, Paragraph 4 of the “Popular Culture and Arts Industry Development Act.” This law specifies the minimum content that must be included in contracts between companies and artists, and this provision is one of them.

Since the 2000s, South Korea’s media and entertainment industry has seen an increase in the number of suicides of socially influential entertainers or celebrities. There are many reasons for this, but one of the most prominent is the socially damaging comments posted on social media and Internet community boards.

Public opinion in South Korea has pressured the government and the National Assembly to take measures to prevent such incidents.

As a result, in addition to the provisions of Article 7-2, Section 4. of the “Popular Culture and Arts Industry Development Act” above, Article 17-2, Section 4.2 of the same Act requires the Korean government to establish a support center to assist in resolving and preventing this problem.

This clause provides that the Company may train artists to equip them with talents and qualities. However, for an Artist to be noticed and popular with the public, the Artist’s artistic ability and physical attractiveness must be of a level and quality recognized by the public. Therefore, the Company should invest in the education and training of the Artists and support them in improving their level.

However, the Artist should be aware that the Company’s expenses for the Artist’s education and training may be included as expenses to be deducted by the Company from the Artist’s share of the profits earned from the Artist’s activities after the Artist’s debut. The Company must keep an independent accounting of these expenses by applicable law, and the Artist may request to see or be shown the accounting at any time. Suppose the Company denies the Artist’s request to see the accounting without a valid reason. In that case, the relationship between the Company and the Artist becomes more opaque, and the credibility of the Company may be compromised. So, the Artist’s request had better be treated respectfully and cautiously.

Companies should always maintain an independent accounting of Artist education and training expenses and must respond reasonably and transparently to Artist requests for accounting materials. Artists should always ensure that the education and training provided by the Company is appropriate and effective and should always keep accurate records of the costs incurred and expenditures made in connection therewith. Doing so may be an essential step in preventing future disputes or may be used as evidence in the event of a legal dispute.

* Standard contract analysis continues in the series.

** References and Quotations:

https://www.mcst.go.kr/kor/s_data/ordinance/instruction/instructionView.jsp?pSeq=2413

Series Articles

Overview

https://www.musicbusiness.co.kr/2024/05/structure-of-exclusive-management.html

Part 1.

https://www.musicbusiness.co.kr/2024/05/structure-of-exclusive-management_26.html

Part 2.

https://www.musicbusiness.co.kr/2024/06/structure-of-exclusive-management.html

Part 3.

https://www.musicbusiness.co.kr/2024/06/structure-of-exclusive-management_16.html