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

Posted by Joseph Hwang Joseph Hwang 8/08/2024

Structure of an Exclusive Management Agreement for a K-Pop Artist (Standard Form Contract) - Part 17.

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")

***

Article 19 (Protection of Youth)

① The Company shall ensure the basic human rights of youth (meaning a person under the age of 19, but excluding a person who has reached the first day of January of the year in which he/she turns 19), including physical and mental health, the right to learn, the right to personality, the right to sleep, the right to rest, and the right to free choice.

② In the case of entering into an entertainment management contract, the Company shall verify the age of the pop culture artist and not require overexposure and overly sensationalized expressions in the case of youth.

③ The Company shall comply with the service hours regulations under the Popular Culture and Arts Industry Development Act when providing popular culture by youth popular culture and arts artists.

④ Matters not stipulated in this Agreement regarding the relationship with youth popular culture artists may be stipulated in the "Youth Popular Culture Artist (or Trainee) Standard Supplemental Agreement".

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Most K-pop artists start their careers as trainees. This means that the accomplishment of their debut requires considerable time for artists. Among the artists who have already made their debut, the percentage of teenagers is increasing elasping time. Their parents are also enthusiastic about them making their debut as a K-pop artist. Companies acquire trainees early and invest costs and expenses to train them for their debut, which requires a significant training period. In all this process, the status of youth as the artist is specialized. As such, youth artists are strictly regulated by law.

The South Korean government enacted the Popular Culture and Arts Industry Development Act to manage and regulate this unique K-pop environment and devotes one section of this law to the relevant provisions to protecting youth as listed below.

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Section 2 Protection of Youth Popular Culture Artists

Article 19 (Principles of Protection of Youth)

Where a youth popular culture artist provides popular culture services, the State, a popular culture business person, a person with parental rights or a guardian shall take care to ensure that his/her rights and interests are protected and that he/she may grow up to have a good-natured personality.

Article 20 (Prohibited Acts with Regard to Youth)

(1) Where a popular culture business person produces a popular culture product, he/she shall not compel any youth popular culture artist to perform any of the acts under subparagraph 4 of Article 2 of the Act on the Protection of Children and Youth against Sexual Abuse.

(2) A popular culture business person shall not make a youth popular culture artist provide popular culture services to the production of popular culture products advertising drugs harmful to youths, materials harmful to youths, business establishments harmful to youths, etc. pursuant to subparagraph 4 (a) and (b) of Article 2 of the Youth Protection Act and subparagraph 5 of the same Article.

(3) No popular culture planner shall broker the provision of popular culture services to an occupation or business in or to which youths are prohibited from employment or access pursuant to the Youth Protection Act.

Article 21 (Provision of Popular Culture Services by Youth)

(1) Where a popular culture business person enters into a contract with a youth popular culture artist, he/she shall include measures guaranteeing basic human rights, such as physical and mental health, right to education, right to publicity, right to sleep, right to rest, right to free choice, etc., of the youth popular culture artist.

(2) A popular culture business person shall not compel youth popular culture artists to perform excessive bodily exposure or immodestly erotic expressions.

Article 22 (Provision of Popular Culture Services by Youths Under 15 Years of Age)

(1) The hours that a youth popular culture artist under 15 years of age provides services for the production of a popular culture product shall not exceed 35 hours a week.

(2) A popular culture product business person shall not be provided with popular culture services from a youth popular culture artist under 15 years of age from 10 o'clock in the afternoon to 6 o'clock in the morning: Provided, That where the day following the date popular culture services are provided is a holiday of the youth popular culture artist's school, he/she may be provided with popular culture services until midnight of the day on which popular culture services are provided with the consent of the youth popular culture artist and a person with parental custody or a legal guardian.

(3) Paragraph (1) shall not apply where just grounds exist, such as traveling for overseas activities, long-distance travel, etc. In such cases, a popular culture business person shall guarantee a youth artist's right to education, right to rest, right to sleep, etc.

Article 23 (Provision of Popular Culture Services by Youth Popular Culture Artists of At Least 15 Years of Age)

(1) The hours that a youth artist of at least 15 years of age provides services for the production of a popular culture product shall not exceed 40 hours a week: Provided, That where both parties agree, the hours may be extended within the scope of one hour a day and six hours a week.

(2) A popular culture producer shall not obtain popular culture services from a youth popular culture artist of at least 15 years of age from 10 o'clock in the afternoon to 6 o'clock in the morning: Provided, That where the youth popular culture artist and a person with parental custody or a legal guardian give consent, he/she may obtain popular culture services.

Article 24 (Corrective Measures Concerning Youth Popular Culture Services)

(1) Where the Minister of Culture, Sports, and Tourism determines that a contract to provide popular culture services by a youth popular culture artist or a contract to perform popular culture planning duties by a youth popular culture artist is markedly unfavorable to the relevant youth popular culture artist, he/she may recommend interested parties to take corrective measures.

(2) Where the physical and mental health, right to education, etc. of a youth popular culture artist is markedly infringed as a business person fails to implement a corrective recommendation pursuant to paragraph (1) without just grounds, he/she may issue a corrective order.

Article 25 (Claim for Remuneration for Youth Popular Culture Services)

(1) A youth popular culture artist may autonomously claim remuneration for popular culture services to a popular culture producer or a popular culture planner.

(2) Where a claim is made under paragraph (1), a popular culture producer or a popular culture planner shall be deemed to have fulfilled a contractual obligation to pay remuneration when he/she pays the remuneration to the relevant youth popular culture artist, even if a contract specifying that a right to claim remuneration remains with a legal representative, such as a person with parental rights, etc.

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The SFEC reflects this legislation by setting the minimum rules for how Companies must manage and protect youth artists in their contracts. The youth Artist's parents should also be aware of this.

The rules for the protection of youth artists can be summarized in a few points: (i) protecting human rights; (ii) preventing exposure to sexual offenses and not setting up a criminal environment; and (iii) adhering to activity hours. The provisions of this contract are governed by the provisions of Section 2. of the Popular Culture and Arts Industry Development Act. First, the Korean legal definition of a juvenile is a person under 19. under the Korean Civil Act, a juvenile's legal actions must be consented to by his or her parent, guardian, or custodian. Therefore, entering into a legally valid management contract with a youth Artist requires the signature of a parent, guardian, or custodian to consent to the contracts.

The Company shall not feature youth-prohibited drugs or places prohibited for youth, under the provisions of the Act on the Protection of Children and Youth against Sexual Abuse and the Youth Protection Act. They are also forbidden from appearing in advertisements related to them.

The Companies are also obligated to fulfill certain obligations to the youth Artists, mostly related to their human rights as juveniles. These include the right to health and the right to learn. The law limits the time zone in which youth Artists can appear. This time limit is based on the age of the youth Artist which is 15 years old. Youth Artists under 15 cannot work more than 35 hours a week, and those over 15 years are limited to 40 hours. However, in the case of 15 years or older, the appearance time can be extended by the parties' consent, up to 1 hour per day and 6 hours per week. In addition, the above basic time limits do not apply for justifiable grounds, such as when the working area is overseas or when long-distance travel is required. Notwithstanding this exception, the Company shall guarantee the Young Artist the right to study, rest, and sleep.

The law imposes restrictions on late-night appearances by youth Artists. The late-night zone is regulated as between 10 p.m. and 6 a.m. the following day in legal. The appearance of a youth Artist under the age of 15 falls within this time zone, the Artist is generally prohibited from featuring during these late-night hours. However, in the case of a school holiday the next day, the youth Artist can appear in the forbidden time zone with the consent of the Artist and his/her parent or guardian. The Artists are 15 years of age or older, they can perform regardless of the school holiday with only the consent of their parent or guardian.

One important thing to note is the rules regarding the distribution of revenue from performances by youth Artists. The law stipulates that the Company must directly pay the youth Artists even if the contract states that the parents or legal guardians have the right to claim the distribution of revenues from the performance on behalf of the youth Artists under the related laws. Although the youth Artists may not have the independent right to practice law, the law requires that the Artists' share of the proceeds be paid directly to the Artists. This measure has the potential to protect youth Artists from exploitation and abuse by inadequate parents.

* Standard contract analysis continues in the series.

** References and quotations:

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

https://www.korea.kr/briefing/policyBriefingView.do?newsId=148858903#policyBriefing

https://eng.kocca.kr/kocca/subPage.do?menuNo=205068

https://www.law.go.kr/LSW/admRulBylInfoPLinkR.do?admRulSeq=2100000176523&admRulNm=%EC%B2%AD%EC%86%8C%EB%85%84%20%EB%8C%80%EC%A4%91%EB%AC%B8%ED%99%94%EC%98%88%EC%88%A0%EC%9D%B8(%EB%98%90%EB%8A%94%20%EC%97%B0%EC%8A%B5%EC%83%9D)%20%ED%91%9C%EC%A4%80%20%EB%B6%80%EC%86%8D%ED%95%A9%EC%9D%98%EC%84%9C&bylNo=0001&bylBrNo=00&bylCls=BE&bylClsCd=BE&joEfYd=&bylEfYd=

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.