B.A.P

"Hello, this is TS Entertainment.

We are here to deliver our official position regarding B.A.P's contract nullification lawsuit that has been reported this afternoon.

All this while, TS Entertainment has tried our best to support the various activities of our artist B.A.P and strived to meet our mutual goals. And like we revealed back on October 28, all their schedules had been cancelled to give them rest as we had made the protection of our artist our priority out of mutual consideration and trust.

And while in the midst of in talks about their future activities, we learned of the sudden lawsuit through news articles.

Currently TS Entertainment is in the process of trying to figure out the details and the truth of the matter. However, we wanted to make clear that there is no such thing as a 'slave contract' or 'unfair contract conditions' in our contracts, and we have never given them unfair, one-sided treatment.

We will take steps to confirm the matter regarding this lawsuit, and respond in an official manner.

We once again convey our sorry hearts for causing concern to all who love TS Entertainment and its artists.

Thank you."

TS has made more than $9,090,000 since B.A.P's debut but each member only got less than $16,300 within the past 3 years, monthly pay $450 for each member

[trans] [dispatch] Why did B.A.P sign a slave contract?
Q1. So for the approximate 3 years they have been active, did they receive 18 million won($18,000) for their earnings?

To be precise it was 17.9 million won($17,900). B.A.P has signed a contract with TS Entertainment in March of 2011. They debuted January of 2012. However until June of 2014 they have never received a single payment. They received their first payment on July 31 2014 and that amount was 17.9 million won($17,900) per person.

Q2. If you divide that over 40 months that is about 500 thousand won($500) per month

D. In B.A.P’s case dorms, eating, transportation etc was covered by the company. At least during their promotions they didn’t need their own personal money. However it is different in personal cases. For example the members had to borrow money from their families when they had hospital fees. One of B.A.P’s acquaintances said “They had no choice but to depend on their families for hospital fees” and “They had no choice but to endure it for their future”.

Q3.What are the conditions of the contract between B.A.P and their company?

D. According to the contract ‘Dispatch’ has received, the division of profits was very big. Firstly, album earnings were divided 1 (B.A.P):9 (company). They were given 10% from characters and merchandise sales.

Q4. 10% of sales? Or 10% of profits?

D. Whatever was left over from the expenses of merchandise. Basically, 10% of net profit. For example, B.A.P sells the ‘Matoki’ dolls. If we say the net profit for a 20,000 won($20) doll was 6,000 won($6), B.A.P would get 10% of the net profit so they would receive 600 won(.60 cents). And you would further divide that ⅙. So each member would be getting 100 won(.10 cents).

Q5. Do the 1:9 contracts still exist nowadays?

D. It is possible. B.A.P has agreed on the profit tariff. But, starting from the third album the division has been raised to be 2:8. B.A.P has released 11 albums so far. But they only have one official album. Basically, B.A.P still receives 10% of album profits.

Q4. B.A.P is more famous overseas. What are the profits for oversea performances?

D. The profit division for concerts, events, and performances are 5:5. It is a higher division than album divisions. Commercial performance fees, magazine sales etc are also divided by half. However, we have no way of knowing if these sales have been properly calculated and recorded. B.A.P’s side argued that the profits from overseas performances were a trick.

Q5. What kind of tricks are present in oversea performance calculations?

D. The guarantee for oversea performances are definite profits. However, the company has recorded these profits as expenses. According to the statement that ‘Dispatch’ received, 1.2 billion won($1.2 million) payment for a Japanese performance was recorded as an expense. 140 million won($140,000) for magazine contract fees was also recorded as an expense.

Also, the overall payment of 17.9 million won($17,900) capitals aren’t specified. For example, none of the payments are mentioned if it’s an album, a commercial, a broadcast appearance, an event. Basically, they have contracted to have a division of 1:9, 2:8, and 5:5 but nothing in their payment states what area they are receiving pay for therefore not knowing how much they are getting from the division.

Q6. The B.A.P sides are accusing that there has been false sums

D: That is true, for example, the ‘unknown public relations fee’. If you look at the statement from January of this year, an approximate 1.6 billion won($1.6 million) has been recorded as being used for a ‘public relations fee’. However, in the secondary statement from July of this year the ‘public relations fee’ has shrunken to 200 million won($200,000). Instead the ‘album promotion fee’ has been newly added. B.A.P side is requested an explanation to the 1.5 billion won($1.5 million) of the album promotion fee.

Q7. What is the stance of the company on the album promotion expenses?

D. We have asked the head accountant “Where were the album promotion expenses provided”. As a reply, “It went into the personal account of the CEO so I don’t know”. The B.A.P side has requested to read the fee transfer statement but were rejected. B.A.P side is hoping that the portion regarding the use will be revealed at the court hearing.

Q8. Why did B.A.P wait 3 years to bring up the problems

D. They have requested the account statements late 2013. The company didn’t reveal anything that year, and January of 2014 was the first time they revealed the account statement. However, due to prevent leaking the information outside they only had them view them briefly. They added that they had no money to pay them with. They had told them that the expenses were greater than the sales so they were at a loss.

Q9. Did the parents of B.A.P accept those facts?

D. According to the company’s first account statement, the profits from March 2011 to December 2013 the profits was 500 million won($500,000). B.A.P has requested an account statement one more time with the help of an attorney in March 2014. And then they received the secondary account statement checks in July 2014.

Q10. How were the account statement details for July 2014?

D. January 2014 (2011 - December 2013) the account statement was at a ‘minus’. However the July account statement (2011 - June 2014) the account statement has returned to a ‘plus’. Over the six months, the net profit has increased over 600 million won($600,000). Also the company has paid each member 17.9 million won($17,900).

Q11. How did a group at a loss turn into a surplus group?

D. According to the secondary statement, over the past 3 years B.A.P has earned (in total profits) 9.9 billion won($9.9 million). Total expenditure was under 9.3 billion won($9.3 million). So suddenly they changed to a 600 million won($600,000) surplus. CJ performance 1.2 billion won($1.2 million) pay was recorded as a sale. Here the commercial profits were an additional at least 400 million won($400,000). The first statement merchandise profits of 900 million won($900,000) had jumped to a 2.6 billion won($2.6 million) in the secondary statement.

Q12. What is B.A.P questioning the most?

D. The 5:5 division of the performance profits. B.A.P is arguing that the japanese performance and CJ performance profits were not recorded properly. Firstly, a portion of the Japanese performance profits were recorded as an expense. CJ performance fees were different from what they had verified scale.

Even if they do believe in the company’s entire statement 100%, it is outside of common sense. If they gave up on the Japan performance profits and received the 5:5 division from the CJ performances…each member would have received at least 100 million won($100,000). No matter how you look at it, it is not understandable and doesn’t make sense as to how “it’s only $17,900”.

Q13. Then it is necessary to look over the contract

D: The contract was a 7 year contract starting from March of 2011. However, it is technically over 7 years. It is because the contract started not from the time the group was made but it started from the time an album was released. B.A.P debut album was released in January 2012. According to this, the contract would end in January 2019. Basically, B.A.P’s contract length is 7 years and 10 months.

Q14. It is known that the normal contract length is 7 years

D: There is a particular clause in the contract. According to the article 3 of the contract it states that , <the contract will end almost 7 years from the first album release>. They have stated that it took one year to prepare for a successful entertainment activity. They have used these tactics to extend the contract length. (tn: so basically they are in contract for 8 years)

Q15. What part of the contract is B.A.P arguing that it is a slave contract?

D: According to article 3 section 5, if they no longer can participate in entertainment activity due to personal affairs, they will extend the contract terms. Basically, military duties, infant care, or being hospitalized for more than 30 days due to personal issues, they will extend the contract terms for the same amount of time.

Article 6 ‘The latter’s rights and responsibilities’ also catch our eyes. If you look at section 6, if they receive public criticism due to use of recreational drugs, indecent relationships with the opposite sex, etc all responsibility and loss following will be compensated by that person.

Article 16 about ‘compensations’ are amazing. From the moment the contract has been terminated, the monthly mean of sales is multiplied by however many months of the contract they had left. For example, B.A.P has earned a total of 9.9 billion won($9.9 million) over 3 years. They have about 49 months of the contract left. If they terminate the contract now and compensate, they would have to pay 14 billion won($14 million).

Q16. We know that this is similar to other companies as well.

D: The country’s entertainment companies return to a promoting system. They invest a lot of money into raising singers. Especially in small companies if the singers don’t succeed the company has to be responsible for all the losses. That’s why they make the contract terms as long as possible, not counting the years of mandatory military service.

Q17. B.A.P has been aware of all this and still stamped the contract

D: B.A.P has understood those parts. They said “It wasn’t that we didn’t understand the early risks of the company. That is why we endured the unfair contract and even not getting paid for 3 years”. They want to know if the company has done what they had promised to do in the contract. Basically, it is a problem of trust.

Q18. Problem of trust, where has it gone wrong

D: It was this past October 19. A member has been taken to the emergency room for exhaustion due to long exposure of stress and overworking. As he was getting an IV in the hospital room, a company representative has showed up. It was because the member needed to go to Changwon for a performance.

On October 24, there was also a problem when MBC has a performance in China. B.A.P has said they could not go to the China for the performance due to health problems. They even gave the company doctor’s notes. However the company representative said “If the broadcast company sues us you guys will take full responsibility” and forced them to go to the performance.

Q19. How is the process going after they have submitted the law suit?

D: B.A.P has stated that this is not simply a problem with payment. They have taken hold of the money they earned in the past and worried about the future. They asked how they could have a vision for the future with a trust already broken. That is why they decided to sue for the nullification of their contract and unfair gain.

The law will decide on the outcome of TS Entertainment’s unfair contract. However, TS will need an explanation for their payment statements. They will need to explain how B.A.P was paid that much and prove it. If it is shown that the money was used for personal reasons, B.A.P will be suing the company CEO for embezzlement and many more offenses.

[original article x]

trans credit to nicole