HYBE, the entertainment powerhouse, has officially entered the ranks of major conglomerates, becoming the first in its industry to surpass a total asset value of 5 trillion KRW (approx. 3.8 billion USD). The Korea Fair Trade Commission (KFTC) announced on the 15th that HYBE has been designated as one of the publicly disclosed business groups for 2024, with Bang Si Hyuk as the head.
According to the KFTC, HYBE’s total assets grew from 4.81 trillion KRW (approx. 3.67 billion USD) at the end of 2022 to 5.25 trillion KRW (approx. 4 billion USD) by the end of last year, securing its spot as the 85th largest business group. This designation brings with it various disclosure obligations and regulatory measures, applied once total assets exceed 5 trillion KRW.
The KFTC highlighted, “HYBE, driven by global fan-favorite artists like BTS, is the first major player in the entertainment industry to receive this designation..”
HYBE’s growth is attributed to its multi-label strategy. Bang Si Hyuk founded Big Hit Entertainment in 2005, and after BTS’s immense success, transitioned to the multi-label system. This structure allows subsidiaries to focus on music and content production while HYBE handles promotions and legal matters. HYBE currently encompasses 11 labels, including ADOR, Belift Lab, Source Music, Pledis, and KOZ Entertainment.
While the multi-label system maximizes revenue by allowing simultaneous artist activities, it also presents challenges like intense internal competition and communication issues with the parent company. This has been exemplified by the Min Hee Jin (ADOR CEO) situation.
ADOR stands out as a competitive label within HYBE. Founded in 2021 with a capital investment of 16.1 billion KRW (approx. 12 million USD), ADOR achieved a revenue of 110.2 billion KRW (approx. 84 million USD), operating profit of 33.5 billion KRW, and net profit of 26.5 billion KRW last year, with total assets of 61.6 billion KRW.
Speculation arises over whether HYBE could lose its major business group status if ADOR were to separate. According to current fair trade laws, companies with total assets exceeding 5 trillion KRW are subject to public disclosure obligations and regulations against unfair benefits to special affiliates. Bang Si Hyuk, as the head, would be responsible for these duties.
Even if ADOR were to split, HYBE’s total assets would still exceed 5 trillion KRW. However, if the big league status starts tracking with nominal GDP—essentially, GDP calculated at current market prices—there remains a possibility for HYBE’s status to be reconsidered, assuming its asset total stays the same.
>> NewJeans’ Parents Slam Bang Si Hyuk for Ignoring Their Daughters, HYBE Responds
Source (1)
