70: Chapter 70 The Secrets of SM

By the time he left SM Entertainment, dusk had already settled over Seoul. The skyscrapers of Gangnam District shredded the last slivers of sunlight, reflecting an orange-red glow off their glass curtain walls like they were on fire. Chairman Wang Shunyi stood in the parking lot, not getting into his car immediately. He lit a cigarette—he didn't smoke often, only when he couldn't figure something out. Today's matter was something he couldn't figure out.

Why did Lee Soo-man seek him out? SM Entertainment wasn't short on money. Even if they were, why wouldn't they go to a bank, private equity, or anyone else? Why look for someone who makes instant noodles? Chairman Wang Shunyi stubbed out the cigarette on a trash can outside the car, pulled open the door, sat inside, and started the engine. The car pulled out of the parking lot and merged into the slow-moving evening rush hour traffic of Gangnam District; while the car moved slowly, his mind was racing.

He didn't go directly back to the company. Instead, he turned into a small alley and parked in front of a cafe. This shop was located in a side alley of Apgujeong-dong; it had a small storefront and a very simple decor with natural wood tables and chairs and several black-and-white photos hanging on the walls. The owner was a woman in her forties who used to be a planner at an advertising agency before quitting to open this shop. Her coffee was brewed well, and she was quiet, never striking up conversations with customers. Chairman Wang Shunyi came occasionally, always ordering an Americano and always sitting in the corner seat.

The coffee was served, and he took a sip; it was bitter, no sugar added. Park Min-ji's messages had prompted him twice on his phone—"Sunyi, how was the meeting?" He hadn't replied to a single one. It wasn't that he didn't want to reply, but he didn't know what to say. Lee Soo-man wanted him to invest in SM Entertainment; even saying it out loud felt unreal to him.

He picked up his phone and dialed.

"Minji. I'm at that cafe in Apgujeong. Are you free? Come over for a bit."

There was a second of silence on the other end. "Okay."

Twenty minutes later, Park Min-ji pushed the door open and entered. She was wearing a cream-colored coat with a dark gray scarf and holding a black handbag; her cheeks were slightly flushed from the cold wind. She sat down opposite him, placed her bag on the adjacent chair, and glanced at the coffee in front of him.

"You smoked?"

"How did you know?"

"You smell of smoke, and you don't smoke often. You only smoke when you can't figure things out." She paused. "So, what went wrong with the meeting?"

He looked at her. This woman had been like this since the first day they met. If he didn't speak, she would guess, and her guesses were always accurate.

"Lee Soo-man wants me to invest in SM Entertainment. Not an endorsement deal, not a brand collaboration, but to buy shares. He holds eighteen percent and wants to sell a portion to me, so I can go in and help him balance the other shareholders."

Park Min-ji didn't show a look of surprise. She was the same way at the company; no matter what news she heard, the expression on her face wouldn't change. However, her fingers tightened when she picked up her coffee cup, and the side of the cup clinked against the saucer, making a crisp sound.

"What did he show you?"

"SM Entertainment's financial statements, shareholder structure, and artist contracts. He said they have internal conflicts, and several major shareholders have teamed up to force him to relinquish power. He wants to bring in a neutral new shareholder to help him stabilize the situation."

"Why do you think he didn't go to someone else?"

"Because others won't go in. SM Entertainment's shareholding structure is too complex; it's easy to get in but hard to get out. Moreover, his conflict with the other shareholders isn't new; anyone who enters will have to take a side. Picking the wrong side means becoming cannon fodder."

"So you think he reached out to you because you're the 'neutral' one?"

Chairman Wang Shunyi looked at her. Her angle of questioning was always right.

"He wouldn't look for someone who makes instant noodles to be a shareholder unless it's not the money he's after." Park Min-ji set down her coffee cup, her finger slowly tracing a circle around the rim. "What he's after is your channels, your brand, and your youth market. Shunyi Foods is currently number one in Korea and has high loyalty among consumers in their twenties and thirties. These consumers are the same group as SM Entertainment's fans. He doesn't want your money; he wants your users."

Chairman Wang Shunyi leaned back against the chair, staring at the ceiling.

"He said something to me. He said, 'SM Entertainment's fans eat instant noodles.' I didn't react to it at the time, but thinking about it now, that sentence was both meaningless and full of meaning."

Park Min-ji looked at him. "Then what do you plan to do?"

"Help me do two things. First, check SM Entertainment's true financial status. The reports he gave me are too clean—so clean they don't seem real. Second, help me set up a meeting with a mid-level SM Entertainment employee, from any department; I want to hear what the insiders have to say."

"A mid-level employee?"

"Yes. Not an executive, not a director, just find someone who has worked there for over five years. The words from a regular employee's mouth are more real than financial statements."

She nodded and jotted down a few notes in her notebook.

The next afternoon, Park Min-ji brought a thick research report and the contact information of a former SM Entertainment employee. That person's surname was Kim, and he had worked as an artist manager at SM Entertainment for six years before resigning two months ago. Park Min-ji arranged to meet him at a barbecue restaurant in Gangnam District; Chairman Wang Shunyi chose the place, reasoning that inviting someone to dinner should always be somewhere decent, and the atmosphere of a barbecue was also suitable for discussing things that weren't convenient to say publicly.

Mr. Kim was in his early thirties, wearing a black down jacket with slightly long hair, looking a bit weary. After sitting down, he first drank a glass of soju before speaking.

"President Wang, I worked at SM Entertainment for six years and have seen too many things. I don't know where to start."

"Start from the beginning. What exactly is the problem with SM Entertainment right now?"

Mr. Kim had another drink, set the glass down, and circled his finger around the rim a few times. "On the surface, it's a conflict between shareholders, but in reality, it's a question of who calls the shots. Chairman Lee Soo-man wants to make SM Entertainment an artist's company, where making money is secondary. The other shareholders want to make SM Entertainment a money-making company, where artists are tools. These two paths cannot converge."

"Which side are you on?"

Mr. Kim gave a bitter smile. "It doesn't matter which side I'm on. What matters is that neither side treats employees like human beings. In my six years at SM, I've handled dozens of artist contracts; in every single one, the company takes the lion's share, and the artist takes the crumbs. Artists work themselves to the bone holding concerts, filming commercials, and doing promotions, but the money they get isn't even enough for the monthly rent of an apartment in Gangnam."

"Then why are people still willing to sign?"

"Because of the SM brand. Once you're in SM, you have a chance to get famous. After getting famous, the contract can be renegotiated. But how many people can actually get famous? Maybe three or four out of a hundred; the remaining ninety-six just languish there."

Chairman Wang Shunyi listened and didn't speak. He flipped the pork belly on the grill; fat splattered onto the charcoal, sending up a small burst of flame. He used the tongs to pick up the meat, cut it into small pieces, and pushed them in front of Mr. Kim.

"Mr. Kim, thank you for coming today. You were an artist manager before; do you have copies of SM Entertainment's artist contracts?"

Mr. Kim hesitated for a moment. "I do. I took them with me when I left."

"Could you let me take a look?"

Mr. Kim lowered his head and remained silent for a long time. When he looked up again, his eyes were a bit red. "President Wang, I'm not trying to hurt SM. I worked there for six years and have feelings for the company. But some things are truly beyond the pale."

He pulled a USB drive from the inner pocket of his down jacket, placed it on the table, and pushed it toward Chairman Wang Shunyi. "Contract templates, settlement details, internal emails—it's all in there. Once you see it, you'll know that SM Entertainment's problems can't be solved just by changing the CEO."

That night, Chairman Wang Shunyi was alone in his office, going through the files on the USB drive one by one. The contract terms were far more harsh than he had imagined—for overseas income distribution, SM Entertainment took seventy percent, and the artist took thirty percent; settlements only happened if album sales reached five hundred thousand copies, and anything less meant working for nothing; the contract term was as long as ten years, and terminating early required paying an exorbitant penalty. He closed the files and leaned back in his chair, staring at the ceiling.

Park Min-ji pushed the door open, carrying a hot Americano. She saw the USB drive on the desk and then the expression on his face, but she didn't ask anything. She set the coffee down and sat opposite him.

"Is it very bad?"

"Yeah."

"Then are you still going to invest?"

"It's not a matter of whether to invest or not." He took a sip of the coffee; it was scalding. "It's that Lee Soo-man wants me to invest, but he didn't tell me their artist contracts were like this. This isn't doing business; this is blood-sucking."

"So you're going to refuse him?"

"No. No rush yet. There's still one thing I haven't figured out."

"What is it?"

He looked at her and set down the coffee cup. "Why are the SM Entertainment shareholders teaming up to force Lee Soo-man to relinquish power? If it's just to make money, they should support him, because the current contracts are already ruthless enough and the profits are high enough. Why would they go against him?"

Park Min-ji was stunned for a moment and didn't answer.

Chairman Wang Shunyi stood up and walked to the window. Below was the night view of Seongdong-gu, with the lights of the traffic stretching into lines in the distance. "Unless Lee Soo-man wants to change the contracts. He wants to give the artists better terms, and the shareholders won't allow it. That is the root of the conflict."

He turned around to look at her. "Minji, go check if SM Entertainment has recently renegotiated contracts with any artists. Especially those top-tier ones whose contracts are about to expire."

Park Min-ji thought for a moment. "EXO's contracts expire next year. Most members of Girls' Generation have already left, but a few remain at SM. There's also NCT and aespa; their contracts still have a few years left."

"Focus on checking EXO. If the terms for their renewal with SM can't be agreed upon, the shareholders will definitely be nervous. Once top artists leave, the stock price will drop and the market value will shrink. The shareholders' money will shrink as well."

"So the shareholders are forcing Lee Soo-man to relinquish power not because he isn't making money, but because he wants to share the money with the artists?"

"Exactly." Chairman Wang Shunyi walked back to the desk and sat down. "Lee Soo-man wants to make an artist's company, while the shareholders want to make money. These two paths cannot converge."

Park Min-ji looked at him. "What about you? Which side are you on?"

"I'm not taking either side." He looked into her eyes. "I'm on the side of the consumers. SM Entertainment's fans will eat instant noodles, but only on the premise that their idols aren't being bled dry by the company. If the artists they like are being suffocated by contracts, will they still be in the mood to eat noodles?"

Park Min-ji lowered her head and made a few notes in her notebook. When she looked up, her expression was calm, but there was a faint, almost imperceptible smile at the corner of her mouth.

"President, you really are surprising sometimes."

"Surprising in what way?"

"Surprising that you would think of these things."

He finished his coffee and stood up. "We still have to go to Namsan Tower this weekend. Go back and rest early."

"What about you?"

"I'll stay a bit longer. I want to finish reading these files."

She didn't leave. She sat opposite him and opened her laptop, the light from the screen reflecting on her face, illuminating a focused expression. He looked at her, thinking to himself that he never wanted to let this woman go for the rest of his life.

Outside the window, Seoul was still brightly lit, and the lights of Namsan Tower were flashing. He knew there was a lock hanging up there with two people's names engraved on it. He hadn't decided whose name to engrave yet. But now, he knew.