BTS agency HYBE buys stake in its K-pop rival ‘SM Entertainment’

Angelique Agarap

February 10, 2023

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  HYBE, the management company behind superstar boy band BTS, will become SM Entertainment’s largest shareholder.

  The move cements HYBE’s position as the dominant player in South Korea’s music industry, where in fact, it is already the largest player, even as it seeks to expand internationally.

  The South Korean entertainment conglomerates announced this on Friday, February 10, with HYBE set to acquire a 14.8% stake in SM Entertainment for 422.8 billion Korean won ($334.5 million).

  The news comes on the heels that HYBE America had acquired Quality Control (QC Media Holdings, Inc.), the Atlanta-based entertainment company covering music, sports, film and television founded in 2013 by CEO Pierre “P” Thomas and COO Kevin “Coach K” Lee. The deal, valued at $320 million in stock and cash, was led by HYBE America CEO Scooter Braun.

  하이브의 새 식구가 된 QC 미디어 홀딩스의 합류를 환영합니다!
  앞으로 하이브는 QC 미디어 홀딩스와 함께 글로벌 음악 산업에서 영향력 및 다양성을 지속적으로 확대해 나가겠습니다. pic.twitter.com/sVnONerF4P

  — HYBE OFFICIAL (@HYBEOFFICIALtwt) February 9, 2023

  On the other hand, SM was founded by legendary music producer Lee Soo-man, dubbed the “godfather of K-pop” in South Korea. He also represents hit artists such as NCT 127, EXO, BoA, and Girls’ Generation.

  “HYBE fully agrees with former Chief Producer Lee’s strategic initiatives including metaverse, a multi-label system, and the sustainable vision campaign,” said HYBE Chairman Bang Si-Hyuk.

  Additionally, HYBE made an offer for SM shares held by minority shareholders, seeking to acquire up to 25% of the rival agency in order to gain management rights.

  With its marquee act on hiatus, SM Entertainment’s extensive portfolio will prove commercially beneficial for HYBE, said music critic Kim Do Heon.

  “HYBE became a behemoth but its weakness was not having legacy. SM is a company that existed throughout K-pop’s history and will bring heritage to HYBE,” Kim stated.

  Meanwhile, South Korean tech firm Kakao Corp announced earlier this week that it would acquire a 9.05% stake in SM Entertainment to pursue joint projects such as global K-pop auditions.

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