BTS, BigHit, and Business — Why BTS Aren’t Being Taken Advantage Of
How financial details can tell us that the members of BTS are not being mistreated by their company.
In 2020 Big Hit Entertainment debuted on the stock market, and in an unprecedented move for the music industry, gave their artists BTS 478,695 common shares of the company.
Firstly, what are stocks and shares? Think of a company as a big pie. When a company decides they want people to eat the pie which is called going public or an initial public offering (IPO), they divide the pie up into millions of pieces called shares. People can buy one or many of these individual pieces and either keep them or sell them on the stock market. Companies on the stock market can go up or down in value, and so do their shares. Stock, put very simply, is essentially the collective term for shares.
Now that BigHit has gone public, people can buy and sell shares of Big Hit to try and make some financial gains. If you’re ever wondered how rich people get much richer, it’s usually on the stock market. This is because depending on the stocks you buy and what you do with them, you can buy into the stock of a company and come out with a lot more money if the value of the shares rises. Essentially, receiving a significant number of shares in a company that is doing well can turn your life around financially.
Prior to BH’s IPO, Bang PD (BH’s CEO) gave each member 68,385 shares of the company (around 500,000 total). The value is subject to change due to stock market fluctuation, but at the time of public opening, this means that each member of BTS had $15.4 million USD in stocks.
“Big Hit CEO and largest shareholder Bang Si-hyuk last month gave 478,695 common shares to the seven BTS members, or 68,385 per each, ‘to strengthen long-term partnership with major artists and boost morale’, Big Hit said in a regulatory filing on Wednesday.” (Source, Reuters)
There are no take backsies here unless BTS decides to sell, which means that BTS have basically been gifted a significant amount of money by their company with no strings attached. The gift of those stocks essentially gives BTS financial security for a lifetime. If the value of the stock started to depreciate, they could sell and still be millionaires on top of their other assets.
Most music labels do not give their artists any stock, even huge names like Universal Music Group which manages Taylor Swift and Queen. BTS are almost certainly not being financially manipulated by BH in order to keep them in their contracts because they were given a significant amount of money without any stipulations allowing them financial freedom, enough to sue to get out of their contract if they wanted.
Interviewer: “Do your parents still help you with managing your finances?”
BTS [Overlapping]: “We manage it ourselves. Yes, we do it ourselves.”
Interviewer: “Is that so?”
RM: “Yes.”
(Source, Let’s BTS Talk Show, 1:14:15)
Also of note, Big Hit encourages the members to have outside legal and financial counsel to avoid any conflict of interest.
“The agency [Big Hit] has been actively encouraging BTS and their parents to seek counsel from accountants, lawyers, and other professionals on matters related to finance, settlements, legislation, and other matters. The value of BTS is growing every day, and as a team and as individuals, it is natural for them to seek external professional opinions.”
(Big Hit Entertainment Public Statement, Source)
At this point, any member of BTS at any time has enough money, brand strength, legal retainer, and fans to sue BH out of a contract. They have the freedom to leave and live beyond comfortably for the rest of their lives but they choose not to. But they may not even have to. It’s been implied that they could leave voluntarily if they chose to do so.
SUGA: “We’ve become closer than family, in a way. We can put everything else aside, and talk freely about how we can move forward and improve. We also respect each other, so if someone said that they can’t do this anymore because of certain reasons… Of course, we’d try to persuade that person, think it over together and overcome difficulties, but if that’s still not enough, we can say ‘We understand. It’s your life, so we respect that.’” (Break the Silence Ep. 1)
BTS resigned their contract with BigHit for seven years with no lawyers present and with the only stipulation that they receive the appropriate acknowledgment for their hard work. That is incredibly unheard of for such a long contract with a group that makes so much money. That leads to the logical assumption that BTS trust their company.
“That same year, the BTS members’ contracts came up for renegotiation. “There are many stories of conflict coming up when a K-pop artist is at that stage [of contract renegotiation], but we wanted to show that we could avoid those,” noted Yoon. Bang weighed in… “The members said, ‘We will give you seven more years, but give us the acknowledgment that we deserve for the successes that we have achieved, and reflect that in the contract.’” Yoon recalled: “There wasn’t even one instance during those discussions where we had lawyers or agents present, banging on tables. We did not talk about money much during the meetings… Bang noted: “When we actually sat down to sign the contract, it was just us and the members.”… The BTS members re-signed with Big Hit in October 2018, extending their contracts for another seven years.” (Excerpt from Harvard Business School’s Case Study on BTS)
On top of that, BTS publicly make jokes about their company and CEO. In a toxic work environment where non-disclosure agreements are abused, this would simply not happen. The fact that BTS can poke fun at their employers in public shows that they have freedom of speech within their company.
There’s merit to discussing the fact that BTS and BigHit grew together from the very beginning. The relationships they have with the people in their company are unique. It appears that BTS have a close relationship with Band PD, their producers, their managers, and other staff.
SUGA: “We always consider our production team and producers as our colleagues. We’re always open with our opinions, always openly expressing them, and there’s no hierarchy that defines us.” (Grammy Museum Interview)
They began with 20–30 employees total, many of whom, for example, managers (Sejin), producers (Pdogg), and production staff have stayed with them since debut or pre-debut. Although BTS’s company is very large now, many of their core staff have remained the same and have known each other for a long time and appear to have close relationships.
RM: “Our company started with twenty to thirty people, but now we have a company with so many employees… So we have a lot of things that we have to be responsible for, to safeguard.” (Esquire Magazine Interview)
This is not your standard corporate relationship. BTS essentially stand on equal, if not higher footing, than their bosses. BTS have a very large amount of leverage over BigHit because they are the main breadwinner of the company. They generated >97% of BigHit’s revenue in 2019 and In 2020, it was only around 85%. Wonder why BigHit (the larger corporation) rebranded to HYBE and is diversifying their assets to include not just music groups, but also technology, other forms of entertainment, and lifestyle? It’s because if BTS just up and left, the company would go underwater. Without something to create profit, companies have a finite amount of time that they can survive unless they start making a profit again.
If the members are unhappy with something, BigHit cannot afford to refuse to address it because they know that the members could always pack up and leave. If that happened, the company would lose almost all of its revenue overnight. As such, it’s in their best interest not only personally but financially to not screw BTS over.
TLDR: BTS are almost certainly not being manipulated or mistreated by their company, mantis just like to project misguided narratives and infantilize the members who are grown adults with financial freedom. If BTS wanted to leave, they could. But the fact that they don’t tells fans all that they need to know.
RM: “Bang PD-nim fully supported us. He gave us freedom to become players, and we, as players, could take high-risk to get high-return. The company and we equally contributed, and I think this is a desirable business model where agency and artist collaborate as business partners.” (180128, Source)
Bibliography:
BTS Owns $108 Million of Big Hit. Every Other Artist Will Be Taking Note — Rolling Stone
Big Hit Entertainment Releases Official Statement About Reports Claiming Legal Dispute With BTS
BTS members’ net worth balloons by millions as their music label stages a massive IPO — Fortune.
Harvard Business School — BTS Case Study
The BTS Boys Are Millionaires As Label Big Hit Goes Public — Vulture.
