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TS Entertainment Releases Official Statement Addressing Issues Raised in B.A.P's Formal Complaint

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On December 5, TS Entertainment, in the wake of a lawsuit from all six members of group B.A.P, posted an official statement on the group's Facebook page, outlining their stance on the issues brought up in the formal complaint, and claiming that the lawsuit was very sudden, and that they believe there is a behind-the-scenes influence that is moving the members in the lawsuit. TS Entertainment, after opening with an apology for causing concern, states that B.A.P had been in constant contact with the agency up until news reports about the lawsuit surfaced, which was how they found out about the legal action. When media continued to "one-sidedly" discuss the issue, the agency said they started to become suspect: "As 2014 rolled around, B.A.P was on goal to pass their break-even point and was rapidly bringing in profit, so the lawsuit situation looked much more severe." "Finally, we received credible reports about a figure that was manipulating the press from behind the scenes, to try and aggravate the relationship between B.A.P and our company, so that they may recruit B.A.P for themselves under favorable conditions," said the agency, who continued to stress that they plan to take severe actions upon confirmation of the figure's identity for "violating industry ethics and engaging in actions that damage the credibility of K-pop as a whole." TS then went on to address each of the points brought up in the formal complaint. Point 1: Revenue [caption id="attachment_675845" align="alignnone" width="960"]ts entertainment Y: Amount in KRW X: Year (split by first and second half) Blue = Expenses (accumulated) Red = Revenue (accumulated)[/caption] The first point is that of revenue. According to reports, B.A.P's revenue for the period of three years amounts to roughly 100 billion won (approx. 8.97 million USD), which equals 17.8 million won per member (approx. 16,000 USD). TS explains that this is not the case: "Investment into B.A.P began since their trainee days. Significant investments began in the second half of 2011 with the album productions costs of Leader Bang Yong Guk’s solo single “I Remember” and Bang&Zelo’s unit single “Never Give Up.” As you can see in the graph, expenses outweighed revenue up till 2013. This was because we continued to invest in order to pursue the common goal of “conquering the world through music” as the B.A.P members had wished rather than aiming for immediate short term profits." "As you can see on the graph, from the point where they passed their break even point, the gap between revenue and expense started to widen substantially and B.A.P began to bring in exponential profits. Just looking at the second half of 2014 (July to December), if we had undertaken the South America Tour, Japan Tour, events in China, etc., as originally planned, then we estimate that total payments to members would have been about 600 million won (approx. 537,000 USD). Unfortunately due to cancelled schedules, we expect total member payments in the second half of 2014 to be approximately 285 million won (255,000 USD)." TS Entertainment predicts that in 2015, depending on activities, B.A.P’s total payments could be 15 times greater, coming in at approximately 1.8 billion won (1.6 million USD). Point 2: Profit distribution "For the period of their contract we expect average profit splits to be 4 (B.A.P) : 6 (TS)," said TS, stressing that it is not the one-to-nine ratio that was reported. TS explains, "In the first half of 2014, the profits delivered to B.A.P were low because of the expenses incurred for the production and promotion of albums during their early debut days in order to increase public awareness. After this, thanks to the effort of everyone, we have successfully concluded two world tours, proudly cementing themselves as a a K-pop artist, which caused a shift in what their revenue streams were and thus a shift in their profit splits. This was intended by both the members and the company, a process of reflecting the member’s contributions to the overall profit structure. In the future, performances, events, commercials will be the primary revenue sources and we thus expect average profit splits to be 4 (B.A.P) : 6 (TS)." Point 3: Slave contract TS stresses that their contract with B.A.P followed what is required by the Fair Trade Commission: "The Fair Trade Commission's standard contract terms state that the standard contract length is seven years and that 'should there be a need to do extended overseas activities and  a contract needs to be signed with an overseas management company,' or 'if there are other valid reasons for requiring a contract to stay valid over an extended period of time,' then 'an agreement can be made in writing' to extend the contract length.'" Point 4: Trust/communication Finally, TS explains that B.A.P had continued their activities without raising any sort of particular objections. "However, after mid-September, they started to suddenly vanish and started to act emotionally unpredictable,  which caused a negative effective on their TV shows and other schedules. Despite this, the company continued to repeatedly apologize and ask for the broadcasters’ and companies’ understanding, putting in effort to protect the members." TS states again that they accepted B.A.P's wishes to take a break, and that open lines of communication were maintained between the members and the agency. TS Entertainment concludes: "This is the end of our company’s official response to the main points of concern. The company will continue to openly submit detailed documents to the courts to address all the issues outlined in the formal complaint in order to fully reveal the truth and facts. What’s certain is that TS Entertainment did not perform any illegal activities and we have never treated B.A.P oppressively or unjustly. The mission statement for TS Entertainment is 'Honesty, Sincerity and Modesty.' It might be that there was a failure to properly convey our intentions of forgoing immediate short term profits to provide the members with a bit more comfortable home and to create an atmosphere befitting of their exception skill. If we had failed to understand the pains and plights of our members then this too is an act of negligence on our part as a result of a lack of experience amongst our workers. Lastly, TS Entertainment, even now,  still hopes that the B.A.P members will talk open mindedly with us about what they want so that we may once again pursue the goals and dreams we had set together during their debut days. However the members continue to remain uncontactable despite our constant attempts to contact them. If they wish to resolve this in court then the company will also respect the member’s wishes and find a definitive resolution in court. Once again, we deeply and sincerely apologize to everyone and we will continue to work hard to resolve all issues amicably." 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