K-pop giant HYBE aims to raise $380m for US M&A
HYBE, the South Korean music agency behind BTS and Ariana Grande, is reportedly looking to raise around 500 billion Korean won (approx USD $380m) to fund acquisitions in the US.
The Seoul-based K-pop giant “is in talks with investors to secure equity financing,” according to a report from Bloomberg, “and is open to having both strategic and financial partners”.
It comes after HYBE chairman Bang Si-Hyuk spoke about his company’s ambitions to expand its global presence via M&A and diversify its sphere of influence beyond K-Pop in the global music business.
In a March interview with CNN about the company’s US M&A strategy, Si-Hyuk notes that “globally, [K-pop] is not occupying much of the market”.
He added: “On the other hand, Latin music and afrobeats is very rapidly growing. So being where we are, it is more urgent to increase the exposure. For that purpose, I’m taking over labels and management companies in America to be able to build the infrastructure.”
“Globally, [K-pop] is not occupying much of the market… [so] it is more urgent to increase the exposure”
HYBE’s $1 billion-plus acquisition of Scooter Braun’s US-based Ithaca Holdings was a big step in bringing numerous non-K-pop operations into the fold, via HYBE America.
The deal saw HYBE take ownership of country music giant, Big Machine Label Group, as well as Braun’s own management company, SB Projects (home to Justin Bieber and Ariana Grande).
In February, HYBE expanded further in the US entertainment business when HYBE America, led by Braun, acquired Atlanta rap powerhouse QC Media Holdings or Quality Control, home to acts such as Lil Baby, Migos, Lil Yachty and City Girls, in a deal worth $300 million in total.
That acquisition came around the same time a bidding war broke out between HYBE and South Korea’s Kakao Entertainment for rival K-pop company, SM Entertainment.
In February HYBE acquired a 14.8% stake in SM Entertainment, for around $335m via the acquisition of shares from Lee Soo-man, SM Entertainment’s estranged founder.
HYBE planned to acquire a 40% stake in SM Entertainment but officially ended its takeover bid on 12 March. Kakao Corp. is now the largest shareholder in SM Entertainment though Bloomberg reports that HYBE still owns around an 8.95% stake in SM.
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Live Nation partners on new South Korea arena
Live Nation is partnering with Korea’s Busan Metropolitan City and to develop a new arena and multi-cultural entertainment complex in Busan, South Korea’s second most populous city.
The new destination will include a 20,000-capacity arena, an exhibition centre, hotels, and an educational facility to foster talent in K-pop and K-culture.
Live Nation will manage the venue, with the local Live Nation Korea team also providing expertise on content and concert promotion to book talent.
“As we continue to expand our global venue business, Busan will be an important touring hub for global superstars who are touring more of the world, as well as K-pop and local artists,” says Live Nation president & CEO Michael Rapino. “We’re excited to help create more opportunities for artists and fans to connect, while also contributing to the growing tourism in the city.”
Busan City will assist with the approval procedures relevant to the project site and provide administrative support. Three potential sites are being investigated for the complex in Busan City’s projects.
“The arena will become a hub of tourism empowered by K-pop, contributing to the local and national economy”
“The arena will become a hub of tourism empowered by K-pop, contributing to the local and national economy,” says Busan’s mayor Heong-Joon Park. “The complex will create many opportunities and synergies with other cultural organizations in Busan including Osiria Sightseeing Complex, Haeundae Beach and local festivals like Busan Fireworks Festival and G-Star. We are looking forward to seeing Busan transforming into a global city full of cultural diversity.”
Live Nation’s Venue Nation owns, operates or has equity interests in a global portfolio of more than 250 live entertainment venues. Across the Asia Pacific, Venue Nation also oversees Grange Road in Singapore, Spark Arena in New Zealand, and the Palais Theatre, Festival Hall, Anita’s Theatre, Fortitude Music Hall, and Hindley Street Music Hall in Australia.
It was reported earlier this year that South Korea is to gain three new concert venues by the end of 2025 as it moves to capitalise on the demand created by the K-pop explosion.
PHOTO: Heong-Joon Park, mayor of Busan City, Greg Gillin, SVP – venue development, Live Nation, and Seung-Han Lee, CEO of B.GET.
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Video game soundtrack concerts launched in Korea
Gaming companies in Korea are launching in-person concerts featuring video game soundtracks.
Korea Bizwire reports that firms such as Nexon and Gravity are devising the events, which will enable gamers to attend orchestral and band performances of their favourite games.
Shows announced so far include the Tales Weaver The Orchestra concert, which will see songs from Nexon’s MMORPG Tales Weaver online game reproduced live by an orchestra and band, with tickets already on sale.
Elsewhere, Gravity is set to stage Ragnarok The Orchestra Concert at Seoul’s Mapo Art Center later this month.
“Offline performances related to game orchestras have been successfully held in the past”
“The concerts are considered to be another fun element of gaming for game lovers, and offline performances related to game orchestras have been successfully held in the past,” notes the publication.
Several gaming companies have organised game-themed classical performances since outdoor activities were permitted again in South Korea after being banned during the pandemic.
The country eased its coronavirus protocols and lifted its ban on clapping and cheering at gigs in April last year.
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Global Promoters Report: South Korea
At the epicentre of K-pop, everything moves at lightning speed. With quarantine measures lifting in 2022, the region’s hunger for live shows reaching ravenous extremes, population growing, and its IT platforms outperforming any in the world, South Korea’s live music culture has not so much bounced as catapulted back to life.
“This country is an extremely trendy market, with everything moving fast, including fashion, trends etc,” says Tommy Jinho Yoon, CEO of ACI Live Asia, one of the region’s biggest promoters alongside Live Nation, Creativeman, Summer Sonic, and Ovation Productions. “Everything needs to be done quickly, and there is no time for patience. This is the general mentality of the pop culture in South Korea, and it’s been like this for many years. Korea has always been aggressive towards the entertainment world, meaning people really love music and live shows here. Regardless of any economic changes and challenges that may be faced through the region, there will always be demands for shows here.”
Pre-pandemic, ACI had launched YOURSUMMER Festival, the first festival in Korea to consist largely of international acts (including Rita Ora and Zedd) and saw their show with The 1975 sell out at Seoul’s Olympic Hall. Such levels of international action are swiftly returning to the region. But as K-pop has become a global sensation; Yoon argues that the
business has grown unnecessarily combative in South Korea.
“Collaborating with pop and K-pop artists who are already popularly established in Korea, are the best methods of building an artist here”
“Competition would have to be one of the primary challenges yet also one of the biggest ways of creating opportunities,” he says. “If there is one artist everyone wants, several promoters make several offers, resulting in a bidding war. No holds barred! I’m sure this sort of challenge takes place in other regions as well, but from our experiences having offices in Korea and the US, we see Korea’s competitiveness is at a much higher level, resulting in promoters having no respect for one another.
“Japan still seems to better-understand the meaning of respect in the business world […] generally speaking, there is less of a war in the entertainment world in Japan compared to South Korean entertainment companies.”
The popularity of K-pop is also the key to success for new artists wanting to break in the territory, say Live Nation Korea’s Steven Kim and Yongbae Cho, who say artists’ overall style should be relevant to current K-pop trends.
“Collaborating with pop and K-pop artists who are already popularly established in Korea, are the best methods of building an artist here,” they explain. “Younger fans in Korea are more drawn to discover new artists online who are actively communicating with their followers on social media, sharing their other attributes besides music, for example, talking about and/or sharing their looks, taste in fashion, lifestyle, celebrity friends, and so on.”
“Regardless of the technology advancements, the fundamental ingredients that formed music was from the hearts for the hearts”
Yoon emphasises the importance of trust and firm relationships within the live music industry – alongside a firm grip on social media promotion – as key to success.
“Due to our long history of being one of the promoters that essentially created the international show market and festivals in the region for [the] last 25 years, we have accumulated a person-to-person, relationship-based community with fans, which still plays a very valuable and undeniably important role. And we believe it will always remain as one of, if not the most important tools to sustain concert marketing in the region, regardless of the technical advancement of the marketing world in the future.”
By establishing a unified network of promoter allies across southeast Asia as “the engine to sustain and enhance the development of international tours,” Yoon sets a sense of loyalty between artists, managers, agents, promoters, and fans at the core of a successful South Korean strategy.
“Regardless of the technology advancements, the fundamental ingredients that formed music was from the hearts for the hearts,” he says. “As we promote shows, rather than just looking at numbers, we try to connect with the audience for better communication and to genuinely provide better foundations and to educate each other, which motivates and results in new innovations. Although Korea is extremely trendy and everything moves quickly, there’s still the essence of the basic human foundation that respects genuine music from the heart, regardless of genre. I believe this applies to anywhere in the world.”
The Global Promoters Report is published in print, digitally, and all content is also available as a year-round resource on the IQ site. The Global Promoters Report includes key summaries of the major promoters working across 40+ markets, unique interviews and editorial on key trends and developments across the global live music business.
To access all content from the current Global Promoters Report, click here.
HYBE calls off SM Entertainment takeover bid
K-pop behemoth HYBE has abandoned its controversial move to take over rival SM Entertainment.
HYBE, which is home to acts including BTS, Tomorrow X Together, NewJeans, LE SSERAFIM and Seventeen, says it has taken the decision due to the market “overheating”, amid competition with South Korean internet giant Kakao.
“HYBE assessed that the market situation had overheated due to competition with Kakao and Kakao Entertainment, which could negatively impact HYBE’s shareholders’ rights,” it says in a statement. “The two companies ― HYBE and Kakao ― also reached an agreement to seek cooperation on platform businesses.”
The Korea Times reports that Kakao will now work toward a controlling stake in SM and its management rights, while continuing to seek cooperation with HYBE on its platform business. Kakao offered SM shareholders 150,000 KRW (€108) per share, compared to HYBE’s previous offer of 120,000 KRW (€86) per share.
“Kakao and Kakao Entertainment respect HYBE’s decision to stop the move to acquire SM Entertainment”
“Kakao and Kakao Entertainment respect HYBE’s decision to stop the move to acquire SM Entertainment,” says a Kakao statement. “As a partner sharing mutually positive impacts, Kakao and Kakao Entertainment will continue various strategic cooperative relations with HYBE and SM Entertainment to help stoke the global status of K-pop and K-culture.”
Seoul-based SM Entertainment says that it “welcomes” HYBE’s decision to suspend its takeover bid. Last month, HYBE purchased a 14.8% stake in SM, in a move led by HYBE’s global team that involved acquiring former chief producer Lee Soo-Man’s shares in SM – days after the announcement of the SM 3.0 business strategy and development plan.
It pledged to buy another 25% stake in a separate notice, leading SM Entertainment CFO Cheol Hyuk Jang to release a video denouncing HYBE’s “hostile takeover”. Days earlier, SM had sold KRW 217.2 billion ($172.8m) shares – a 9.05% stake – to Kakao Corp.
In February Bloomberg reported that SM had seen its profits soar 70% thanks to the return of concerts and live events, posting an operating profit of 25.2 billion KRW (€18.3 million) in Q4 2022. Sales rose 18.2% to 256.4bn KRO, with its number of concerts in the three-month period up 35 times on the same quarter in the Covid-hit 2021.
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HYBE becomes top shareholder in rival SM Entertainment
K-pop behemoth HYBE has become the largest shareholder in SM Entertainment, the rival South Korean company thought to have kickstarted the wave of popularity around Korean pop culture.
The purchase of KRW 422.8 billion shares — a 14.8% stake — was reported today (10 February) and helps strengthen HYBE’s position as a leader in K-pop. Reportedly, the company pledged in a separate notice to buy another 25% stake.
Through its subsidiary labels, such as Big Hit Music, Pledis Entertainment, Source Music and ADOR, HYBE is home to K-pop acts including BTS, Tomorrow X Together, NewJeans, LE SSERAFIM and Seventeen.
The SM move was led by HYBE’s global team, which includes chairman Bang Si-Hyuk, CEO Park Jiwon and Braun and involves acquiring former chief producer Lee Soo-Man’s shares in SM Entertainment. In October 2022, SM announced that it terminated a contract with Lee Soo-Man a year early.
Seoul-headquartered SM is home to such acts as aespa, BoA, TVXQ, Girls Generation, Shinee, EXO, Super Junior and NCT 127.
The deal is targeted at “raising its competitiveness in the K-pop industry and producing a synergy effect,” Hybe said in its filing.
Shares of SM Entertainment today soared, rising more than 16% at the open in Seoul, while HYBE rose 6%
Shares of SM Entertainment today soared, rising more than 16% at the open in Seoul, while HYBE rose 6%, JYP Entertainment rose 2.5% and YG Entertainment gained 3.8%.
Today’s blockbuster announcement comes at the end of a busy week of business for both HYBE and SM.
On Tuesday (7 February), SM Entertainment sold KRW 217.2 billion ($172.8m) shares – 9.05% stake – to South Korean internet company Kakao Corp.
The following day (8 February), HYBE America announced it had acquired Quality Control (QC Media Holdings, Inc.).
The Atlanta-based entertainment company covers music (Lil Baby, Lil Yachty, City Girls and Migos are among its signings), sports, film and television founded in 2013 by CEO Pierre “P” Thomas and COO Kevin “Coach K” Lee. The deal, valued at $320 million in stock and cash, was led by HYBE America CEO Scooter Braun.
The rise and rise of K-pop will be discussed at the forthcoming International Live Music Conference (ILMC), taking place at the Royal Lancaster Hotel in London, between 28 February to 3 March.
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K-pop giant SM Entertainment sells $173m share
South Korean internet company Kakao Corp is to buy a 9.05% stake in K-pop behemoth SM Entertainment for a reported 217.2 billion won ($172.8m).
The deal will see Kakao Corp become the second largest shareholder in the entertainment agency, home to acts including Girls’ Generation, Super Junior, EXO, NCT and Red Velvet.
The two companies will team up to pursue joint management projects together including global K-pop auditions, management and music distribution businesses, according to Reuters.
“We hope to work together in competing in the heavily contested global music and content market through this investment”
“We hope to work together in competing in the heavily contested global music and content market through this investment,” says Kakao Chief Investment Officer Bae Jae-hyun.
SM Entertainment says the capital raised through the deal will fund its new business strategy dubbed “SM 3.0” – establishing multiple production centres and labels as well as a music publishing-specialised subsidiary, and investing in the metaverse.
At the end of last year, the Seoul-based operation announced plans to launch a headquarters in Singapore, in order to strengthen its presence in Southeast Asia.
The SM boss also revealed ambitions to slowly expand not just to other parts of Southeast Asia, but also to the wider continent, including the Middle East.
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Scooter Braun becomes sole CEO of HYBE America
Scooter Braun is now reportedly the sole CEO of HYBE America, the US division of South Korean entertainment giant HYBE.
Through its subsidiary labels, such as Big Hit Music, Pledis Entertainment, Source Music and ADOR, HYBE is home to K-pop acts including BTS, Tomorrow X Together, NewJeans, LE SSERAFIM and Seventeen.
Braun had previously shared the co-CEO title at HYE with Lenzo Yoon, a veteran of Big Hit (the company’s former corporate name). Yoon joined the South Korean company in 2010 as head of strategic planning, before becoming global CEO in 2020 and co-CEO of HYBE America in 2021.
Braun joined through the entertainment company’s merger with Ithaca Holdings
Braun joined through the entertainment company’s merger with Ithaca Holdings, which managed the likes of Ariana Grande and Justin Bieber, among others.
As part of the deal, HYBE America gained complete ownership of Ithaca Holdings and its affiliates, while Braun joined the board of HYBE and retained his CEO title, becoming co-CEO with Yoon.
At HYBE, Yoon was tasked with “localising the K-pop business model in the US music industry” while Braun would be overseeing HYBE America’s competitiveness in the stateside market. HYBE has not indicated what Yoon’s future role might be.
The news comes shortly after HYBE reported increased revenue growth in 2022, making over $1 billion dollars.
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Woodstock festival is coming to South Korea
Woodstock is coming to South Korea in 2023, marking the first time the legendary festival will take place outside the US.
SGC Entertainment says it has signed an official copyright agreement with the Woodstock Music and Art Fair to host a three-day festival under its name with the theme of “freedom, peace and love.”
The festival is slated for 28 to 30 July at the Hantangang River Geopark complex, in Pocheon, Gyeonggi Province in memory of the 70th anniversary of the Korean War armistice agreement.
SGC Entertainment says it has signed an official copyright agreement with the Woodstock Music and Art Fair
The original Woodstock festival was held in 1969, with anniversary events taking place in 1994, 1999 and 2009. A 50th-anniversary event was slated for 2019 but was ultimately cancelled due to financial problems.
In 2010, there was an attempt to host a Woodstock festival in Korea, but it never took place because of “copyright and artist lineup issues,” according to the Korea Herald.
SGC has not yet revealed a lineup for the festival but said that it would include at least 30 performances.
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Korea to gain three new concert arenas by 2025
South Korea is to gain three new concert venues by the end of 2025 as it moves to capitalise on the demand created by the K-pop explosion.
Billed as the nation’s first multi-purpose arena, the 15,000-seater Mohegan Inspire Arena is scheduled to open in the city of Icheon in the fourth quarter of 2023 and promises to “transform the entire landscape of the domestic performance arts industry”.
The venue, which will form the centrepiece of Mohegan Inspire Entertainment Resort, is projected to welcome four million guests a year. Previously, reports the Korea Times,the Seoul metropolitan area has relied on stadiums such as Gocheok Sky Dome, the KSPO Dome in Olympic Park and the Jamsil Sports Complex’s Main Stadium to host shows.
“Korea’s performing art industry has long been facing a shortage of high-quality venue that can support shows of top-tier artists”
“Given the strong demand for K-pop and other live performances, Korea’s performing art industry has long been facing a shortage of high-quality venue that can support shows of top-tier artists from home and abroad, and various cultural events,” says Ray Pineault, CEO and president of Mohegan. “This perhaps explains the expectations building around the Mohegan Inspire Arena far ahead of its construction completion.
“This new venue is poised to emerge as Korea’s first multi-purpose arena that can showcase various types of events, encompassing global artist performances, world-class sports league tournaments such as eSports, MMA, TV award shows and media IP-based exhibitions.”
Mohegan also operates the 10,000-cap Mohegan Sun Arena in Uncasville, Connecticut, US.
Elsewhere, AEG and CJ LiveCity Corporation’s new K-pop-focused entertainment complex in South Korea is set to open in Goyang City, Seoul, in 2024. The 1.8 trillion won (€1.3 billion) development comprises the 20,000-capacity CJ LiveCity Arena and an outdoor performance space capable of accommodating 40,000 people.
In addition, South Korean IT giant Kakao and the Seoul metropolitan government are in the process of building the 19,000-cap Seoul Arena in the capital’s northern Dobong district, with work expected to be completed in October 2025.
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