Under SM Entertainment's post-contract settlement agreement, Lee Soo Man will receive 6 percent royalties in 2092 for physical and digital albums released.
The feud between Lee Soo Man and the SM Entertainment management team is still continuing. Not long ago, Lee Soo Man's attorney even revealed that the founder and former executive producer would file a lawsuit against the SM management team.
Now on Thursday (9/2), Align Partners Capital revealed that Lee Soo Man is trying to maintain his contract with SM to receive 6 percent of SM's music revenue or royalties even after his contract expires until 2092.
According to the original contract released by Align, Lee Soo Man's personal contract with SM Entertainment remains the same according to the post-contract settlement agreement in "Like Planning Producing License Agreement Attachment 2".
Under the post-contract settlement agreement, Lee Soo Man will receive 6 percent royalties in 2092 for physical and digital albums released. As for management income, he will receive 3 percent of royalties in 2025.
In other words, Align Partners estimates that Lee Soo Man will earn over 40 billion won during the first 3 years and then over 50 billion won over the next 10 years.
However the contract with Like Planning caused heavy losses for shareholders and over-exploitation of SM's profits. Align ended up terminating its contract with Like Planning early via a shareholder proposal.
Despite this, Lee Soo Man still took SM's net profits, including music revenue, under a post-contract settlement agreement. Align Partners accused Lee Soo Man of having an emperor's contract that was unfair to SM's management team.
Align Partners disclosed the document in response to suspicions that it was trying to persuade and round up small shareholders to "vote" in a possible management dispute.
In fact even Kakao, which recently emerged as the second largest shareholder by acquiring SM shares, has a hard time competing with Lee Soo Man, the largest shareholder who currently holds over 16 percent.
In this case, experts in the stock industry expect the management dispute to end in the victory of the current management team and Cocoa to provide a favorable outcome for the company's valuation and share price.
Experts said, "Until now, the company's performance gains have not been distributed to shareholders, executives and employees. In order to enhance long-term shareholder value, SM's victory is more profitable." (wk/charity)
