The group Fifty Fifty, whose application for injunction to suspend the validity of the exclusive contract was rejected, is facing another difficulty. This is because the original agency, Attrakt, is open to the possibility of claiming a huge amount of damages worth tens of billions of won against the members of Fifty Fifty.
The amount of damages that Attrakt can claim from the members of Fifty Fifty can be inferred based on the standard exclusive contract, which is popular culture and art.
According to Article 15, Paragraph 1 of the Standard Exclusive Contract for Popular Culture and Arts, if a planner (affiliate) or singer violates the contents of this contract, the other party may set a grace period of 14 days for the violator and request correction of the violation. If the violation is not corrected, the other party may cancel or terminate the contract and claim damages.
Paragraph 2 of the same Article stipulates that even though the planner faithfully fulfills its obligations under the terms of the contract, if the singer violates the terms of the contract for the purpose of unilaterally destroying the contract during the contract period, the singer shall contract separately from compensation for damages under paragraph 1. It contains the content that, based on the time of termination, the planner must be paid as a penalty the amount obtained by multiplying the average monthly sales for the preceding two years by the number of months remaining.
First, it is possible to estimate the amount of the penalty, which has a high proportion. However, since the details of Fifty Fifty's album sales have never been clearly disclosed, it is necessary to infer by substituting the revenue details of those known in the industry. The industry believes that Fifty Fifty, which debuted in November 2022, has recorded sales of at least billions of won with “Cupid” ranking up to the top of the Billboard. There are some who analyze that it recorded sales of up to tens of billions of won.
Considering that the sales generated by Fifty Fifty after their debut is about 4.5 billion won, and substituting the average idol's first contract period of 7 years, the amount of damages that Attract can claim from Fifty Fifty members is a whopping 23.6 billion won. If Fifty Fifty's sales are set at 10 billion won, it can rise up to 51.1 billion won.
It doesn't stop here. In addition to the penalty for breach of contract in Paragraph 2, Attrakt may also claim the amount of actual damage caused by reasons attributable to Fifty Fifty. There is room for this to include direct and indirect investment costs of Attrakt, as well as damages caused by Fifty Fifty's refusal to advertise and direct operating loss costs due to the suspension of overseas marketing.
The amount invested by Attrakt to debut Fifty Fifty is known to be about 8 billion won. It is said that CEO Jeon Hong-jun used the money from selling his imported car and watch for this purpose, as well as 90 million won collected by his elderly mother, as well as monthly rent and training at the Fifty Fifty accommodation.
If the amount of actual damages plus the amount for the penalty is added, Attract can claim damages of up to tens of billions of won against the Fifty Fifty members. As Fifty Fifty's application for injunction to suspend the exclusive contract against Attrakt was dismissed on the 28th, it seems that Fifty Fifty is losing in this dispute. In addition, the possibility of paying damages of at least several billion won to tens of billions of won is open, which seems to be a virtual crisis.
Legal experts also pointed this out. Attorney Jeonghyang Ahn Se-hoon of the law firm recently said on his YouTube channel, “If the sales of Fifty Fifty are estimated at 3 billion won, damages can reach about 30 billion won.” The amount of damages is reduced, but the problem in the Fifty Fifty case seems different.”
In addition, “the amount of damages is highly likely to be reduced, but it is difficult for the penalty to be reduced according to the Supreme Court’s precedent.” We may be liable for damages,” he said. In addition, he emphasized, “It seems very likely that it will remain as a monumental precedent in the entertainment world.”
https://sports.khan.co.kr/news/sk_index.html?art_id=202308291734003
