HYBE seeks to hype up '2.0' initiative with a new CEO

Industry

Published: 24 Jul. 2024, 17:05 Updated: 24 Jul. 2024, 18:27

HYBE seeks to hype up '2.0' initiative with a new CEO

Lee Jae-sang, soon-to-be CEO of HYBE at left, and Park Ji-won, current CEO of HYBE [HYBE]

HYBE is seeking to hype up its "2.0" initiative with a new CEO to helm the change.

The K-pop conglomerate said Wednesday that it will appoint Lee Jae-sang, the current chief strategy officer (CSO), as its new CEO to replace current CEO Park Ji-won.

Details on the "HYBE 2.0" initiative or the date of the board and shareholder meeting to appoint Lee were not disclosed on Wednesday, though the agency said in a press release that his promotion will be finalized after the meetings.

"CSO Lee Jae-sang will lead the soon-to-be-announced 'HYBE 2.0' initiative and a transition in leadership," the BTS agency said.

Lee joined HYBE, then called Big Hit Entertainment, in 2018 after stints at Hyundai Motor Group and Google. He has led major businesses since, especially in investments and mergers, according to HYBE.

HYBE CEO Park Ji-won [HYBE]

"CEO-designate Lee Jae-sang is an entertainment expert with experience in planning and executing strategies not only the local market but also overseas," HYBE said. "We hope to see HYBE fulfill its potential as a high-tech entertainment and lifestyle platform company with its expertise in music and technology."

Current chief Park expressed his desire to step down as CEO of the K-pop company after serving four years as the chief of HYBE since 2021.

He joined the BTS label in May 2020 and began his term as CEO in 2021, succeeding current chairman and then-CEO Bang Si-hyuk.

Park is credited for leading the agency, then called Big Hit Entertainment, to go public on the Korea Exchange in October 2020 and buying U.S. Entertainment company Ithaca Holdings in the following year.

HYBE's Bang Si-hyuk, left, and ADOR CEO Min Hee-jin [HYBE, ADOR]

Park's resignation comes amid a cascade of conflicts between HYBE affiliates, mostly around Min Hee-jin, the CEO of girl group NewJeans' label ADOR, and the other HYBE subsidiaries Source Music and Belift Lab.

The kerfuffle began in late April when HYBE began an internal audit against Min and ADOR executives on suspicion that they were trying to get a third-party investor involved in the company.

The back-and-forth between HYBE, ADOR and the other labels involved multiple parties and "evidence," such as the personal KakaoTalk messages between Park and Min.

HYBE shares closed at 177,300 won ($128) on Wednesday, down 1.6 percent from the previous day and 23.1 percent lower than the closing price of 230,500 won on April 19, the last trading day before the agency's internal conflicts came to light publicly on Monday, April 22.

Members of girl group NewJeans and Min Hee-jin, right [SCREEN CAPTURE]

The company's stock prices saw a slight recovery in late May with new music released by NewJeans as well as RM of BTS on May 24, followed by BTS member Jin finishing his military duty on June 12. But prices have been on a losing streak since earlier this month with no signs of the brawl between Min and other companies subsiding.

Still, analysts predict that HYBE will post 649.7 billion won in revenue for the second quarter of 2024, up 4.6 percent compared to the same period last year, according to a market consensus compiled by FnGuide. Operating profit is expected to come in at 74.6 billion won for the April-June period, 8.2 percent lower than the year prior.

In April, HYBE became the first entertainment company in the country to be classified as a "large business group" by the Fair Trade Commission because its assets surpassed 5 trillion won.

The label will release its second-quarter earnings report at 10 a.m. on Aug. 7.

Update, July 24: Added background about Park Ji-won, current state of HYBE.

BY YOON SO-YEON [yoon.soyeon@joongang.co.kr]