“Demand Immediate Tax Audits” — Furious Fans React to HYBE’s Alleged High “Tuition Fees” for Affiliate Labels

HYBE Corporation’s Controversial Fees Spark Outrage Among Fans

Recent reports from DealSite have revealed that HYBE Corporation imposes significant “tuition fees”on its subsidiary labels, with the notable exception of BIGHIT MUSIC. On November 8, 2024, it was reported that BIGHIT MUSIC, now known as HYBE Labels, remains a vital revenue stream for HYBE thanks to the tremendous global appeal of its flagship group, BTS.

Revenue Trends and Financial Impact

In the fiscal year 2023, BIGHIT MUSIC generated impressive sales of 280.1 billion won (approximately $202 million). However, projections for 2024 indicate a substantial decline, with expected sales falling to 164.7 billion won, a staggering 41.2% decrease. This dip is largely attributed to BTS’s ongoing military enlistment, which has markedly affected the group’s activities and related income. Consequently, the net profit plummeted by 36.6%, dropping from 75.7 billion won ($54.5 million) in the first half of 2023 to 48 billion won ($34.6 million) in 2024.

Fees Structure Among Subsidiaries

According to reports, subsidiary labels, excluding BIGHIT MUSIC, are required to pay various fees to HYBE as a means of financing artist development. In 2023, ADOR reportedly incurred tuition costs of 15.7 billion won ($11.4 million), while Source Music, responsible for managing LE SSERAFIM, paid 11 billion won ($7.95 million), and BELIFT LAB, which handles ENHYPEN, contributed 14.4 billion won ($10.4 million).

On top of these tuition fees, BIGHIT MUSIC is reported to have paid HYBE considerable purchase price fees, amounting to 38.6 billion won (around $27.8 million) in 2023, with an expected payment of $17.8 million due in the second half of 2024.

Fan Backlash and Calls for Accountability

The news has caused significant unrest among fanbases, with many calling for an urgent tax audit of HYBE Corporation. Social media platforms, particularly X, have been flooded with critical comments from fans expressing their outrage:

“Hybe is fraudulence from head to toe. Get them tax audited NOW.”

Fan comment on HYBE's fees for subsidiaries. — Fan comment regarding HYBE’s alleged high tuition fees for subsidiary labels (Image via X/@strawberrymccns).

Fans have highlighted perceived discrepancies in how subsidiaries are treated, particularly suggesting that ADOR is charged extortionate “tuition fees”without receiving adequate support in return.

“HYBE is reportedly charging ADOR the highest tuition fees but providing the lowest internal revenue compared to other sub-labels, suggesting a potential financial imbalance.”

With ongoing dissatisfaction, several fans are actively promoting a petition targeting HYBE’s corporate structure and its designation as a ‘Top Company’ in South Korea. So far, over 48,000 signatures have been gathered on the petition, reinforcing calls for a comprehensive review of the company’s practices.

BELIFT LAB: The Highest Tuition Fees Among Subsidiaries

In a notable finding, BELIFT LAB has been reported to incur the highest tuition fees within the HYBE ecosystem. The company’s internal transactions with HYBE reportedly exceeded 134.8 billion won (around $97.1 million) in 2023, which constituted a significant portion of HYBE’s total annual revenue of 552.3 billion won (approximately $398.2 million).

Additionally, while other subsidiaries like Pledis Entertainment (managing SEVENTEEN) and Source Music made contributions of 29.3 billion won ($21.1 million) and 3.5 billion won ($2.5 million) respectively, BELIFT LAB’s financial commitment is noteworthy. The label’s revenue from ENHYPEN alone surpassed $65.8 million in 2023, demonstrating its aggressive growth trajectory.

As pressures mount for HYBE Corporation to address these concerns, the company is also dealing with scrutiny stemming from a recently leaked internal report containing derogatory remarks about competing K-pop groups. This situation adds further complexity to HYBE’s public relations challenges.

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