On December 5, 2014, TS Entertainment finally released an official response regarding the lawsuit B.A.P filed against them for “slave contracts.” The statement released by TS states how they tried to contact B.A.P members and their families and discussed money issues, but completely ignored the main element of B.A.P’s lawsuit regarding their human rights.
TS Entertainment’s Statement
Hello, this is TS Entertainment.
First we would like to apologize for worrying those who have been watching us with care. We bow to you in apology.
TS Entertainment, since its launch in 2008, has produced groups such as Untouchable, Secret, and B.A.P and is nearing the launch of a new group as well. As K-Pop became an international phenomenon and proudly set in its foundations, we have made it our goal to introduce our artists to the world and grow alongside the rapidly growing [Hallyu] culture.
B.A.P was the first boy band we produced and our cherished project. We invested so much into the group that, investment-wise, we would not be lacking when compared to other companies. Thankfully, all six members were all hard working and talented. Also, because they worked so hard, B.A.P became a notable K-Pop group that has twice successfully gone on world tours.
In October, while we were working hard hand-in-hand, the members notified us through their chief manager that they wanted to take a break. We decided to respect their request and canceled their South American and Japanese tours to give them a long period of break. The members went back and forth from their dorm to their families and sometimes even outside of the country to regain their strength. While doing so, they kept in contact with the company. Recently, we had confirmed that they would agree to restart their activities starting with awards in January and began planning schedules for next year. This was in progress when we ran into a report on November 27th about the lawsuit filed against us.
Even on the day that the lawsuit was passed, we talked to the members like any other ordinary day, so it was even a huge shock to us on the 27th. We tried to contact the members through their chief manager but could not reach them. We then tried to contact their parents and then from those we were able to contact, we were able to confirm that the lawsuit was indeed real and the parents requested for us to them “talk through the lawyers.” We have been waiting for the official accusation statement to arrive in order to truly be able to grasp the situation.
Meanwhile, through a number of media sources, we witnessed many accusations grow against us. This caused us to be suspicious because B.A.P had passed their BEP (Break Even Point) and was on the verge of making steep profits, the gravity of the situation increased. Finally, we were able to gain credible news from certain sources that there is a party behind this who is trying to create an air of hostility between B.A.P and us in order to recruit them easily.
We plan to find this party and as soon as we are able. We will make sure they pay for not only playing against the rules of this business but defacing the K-Pop industry as a whole.
In truth, we still not have received an official statement of accusation because there was a mix-up in the stamping of the document, so the court has ordered it to be fixed. Although we have not yet received the official document, the company has requested to view the contents and wants to answer the topics of controversy at the moment.
Controversy 1) $10 million USD ->$ 17,800 USD
B.A.P reached their BEP at their two year mark. The payout for the second half of 2014 is expected to be $285,000 USD. But, if things had gone according to schedule, the expected payout would be approximately $600,000 USD.
The investment in B.A.P started when they were trainees and bigger investments started in late 2011 when Bang Yong Guk debuted with “I Remember” and when the unit BANG&ZELO, with the song “Never Give Up,” was created. As you can see from the chart above, up until 2013, the investment costs were bigger than the profit. This is because we prioritized “the invasion of the globe through music,” that is, the dream of B.A.P and the goal of TS Entertainment. Thus, we continued to invest, risking losses, and in the end, we were able to turn B.A.P into a solid next generation K-Pop artist. Additionally, it is a very impressive feat to pass their BEP in just 2 years in this industry.
As can be seen in the charts above, after the BEP was reached, the profit grew at a phenomenal rate. Even looking at late 2014 (July to December), if we had stayed on schedule with the South American and Japanese tours, we were expecting a total of $600,000 USD for the group. However, due to cancellation of the schedules, we expect the payout to be around $285,000 USD.
We had estimated, depending on the amount of activities in 2015, that the payout for early 2015 would have reached $1.8 million USD.
Controversy 2) 1:9 Profit Ratio
The expected average profit share through the contract was a ratio of 4(B.A.P):6(TS).
Before we discuss this, we would like to reveal how we calculate the settlements. We process the turnout every six months through this method. First we deduct the cost from the total sales from B.A.P and then we take the profit and categorize it into channels and venues through which the sales were made, before distributing the profits.
The reason we deduct costs from total sales is because there are things that are hard to classify, such as specific types of cost like as dorms, transportation, food, lessons, exercise, massages, hospital bills, T-Money, etc.
The reason the distribution for events and performance is a ratio of 5:5 and the distribution for album/audio files/merchandise is a ratio of 1:9 is because the former costs less in production than the latter. Also, the latter requires us to pay our employees after distribution, as well as pay for the venues of concerts and events, and we usually include the cost of labor in the production cost itself.
In early 2014, we focused more on albums, concerts, and music files because we wanted to increase B.AP’s prominence. Through everyone’s hard work, we successfully finished two world tours and we were shifting our focus onto activities that would turn the average distribution of profits to a ratio of 4(B.A.P):6(TS).
Controversy 3) Slave Contract?
Our contract is standard with the FTC (Fair Trade Commission) and has additional, simple elaborations in some parts of the contract.
All the facts mentioned through one media source are based on the “standard contract” according to the Fair Trade Commission and elaborates on certain parts.
On the issue of the length of the contract, according to the “standard contract,” it says if there are instances where “long overseas activities or contracts with overseas agencies” or other reasons that require contracts to be longer, one can extend the length of the contract through a written agreement.
When they signed their contracts, we set the length as “7 years from the release of an album (single, group, digital or official)” and the members each signed in March, June, or September of 2011. Since some members, such as Zelo and Yong Guk began activities earlier, the members all have different termination dates.
Controversy 4) Issue of Trust
Issue of communication [with family members]
Last July, even after the payout was completed, the B.A.P members had no problems and continued their schedules. But after mid-September they started acting odd. They disappeared and showed emotional fits to where their scheduled activities suffered. However, we apologized to the broadcasting people countless times in order to protect the members.
Since the B.A.P members showed no outward signs of dissatisfaction and continued to live in their dorm, visit the hospital and share meals together, we believed that they were preparing for their comeback and waited until they were ready. As we stated before, we were planning on a comeback in January when we heard this surprising news.
Then, we gained information from their management team and executive members of the company and tried to think of a solution for the emotional stress they were receiving. When they requested that they “wanted to rest,” we respected that and since October 13th, we agreed to “minimize official schedules” and canceled the South American and Japanese tours so that they could get enough rest until the end of the year.
These are our official responses to the controversy that is prevalent at the moment and we plan to reveal everything and prove the truth in front of the court, one by one. We can say with confidence that TS Entertainment did not break any laws and that we have never treated B.A.P wrongly or forced them into anything.
Our company policy is “Honesty, Hard work and Humility.” Perhaps our wish to create a better, more comfortable environment where their talents to be improved was communicated incorrectly. If we failed to recognize that we were hurting the members’ hearts, it is also our fault and the result of our inexperience.
Finally, TS Entertainment would like to talk to the members of B.A.P and discuss the goals we had talked about when they debuted and wish they would harden their resolves again. However, if they continue to disregard our attempts at communication, we will do as they wish and find the best way to solve this problem in court.
We would like to once again apologize to everyone we have worried with this incident and promise we will do our best to reach an amicable settlement on the issue. (Trans. Cr.: Koreaboo and Mae L., Purdue University)
B.A.P’s Side Responds, Dispatch Reveals More into B.A.P’s Situation
Soon after the release of TS Entertainment’s statement, people on B.A.P’s side fired back, including HAK Ssem, Daehyun’s former vocal coach, and Zelo’s brother.
 Zelo’s brother remains mostly anonymous, so out of respect for him, he is not named in the article.
On December 5, 2014, HAK Ssem took to Twitter like he did after TS’ initial statement to refute TS’ claims. In his tweets, HAK Ssem said:
You guys are seriously trying to hide the sky with your palms. After looking at your graphs, I have no words. Your expenses keep increasing? Did you raise the song prices, did you raise the ticket prices, did you raise the CD prices? Why are your expenses increasing? If you set a standard amount, would there be that much of a differences in expenses from their debut days? I guess the rest was your paycheck *patooie.*
I’m working right now so I don’t have time but I’ll make a post to organize everything! I don’t believe in the account books you guys made. I’ll believe in your tax invoices, your transaction deals, and the account books from the companies you had contracts with. And you wish you were the force. The fans who believe and cheer for them are the true force.
I’m angry so I may not be making much sense but please understand. Anyways, everyone don’t be scared and be strong! (Trans. Cr.: Nicole @baptrans)
 Zelo’s brother remains mostly anonymous, so out of respect for him, he is not named in the article.
Following TS Entertainment’s statement, Dispatch provided a further breakdown of TS’ claims against B.A.P members, and even pointed out some discrepancies. The article included information regarding their grueling schedules (sidebar, right), concerns regarding their health, and how B.A.P does not care about the money per se, but more about accurate paperwork and fair treatment in regards to their human rights. Within the article, B.A.P’s representation hinted the members may look into a defamation case as well because of TS’ claims that a “force” is behind their decision to file suit.
Even Zelo’s notoriously anonymous brother came out of hiding to create a Facebook page and weigh in on the situation, revealing further some of the treatment B.A.P experienced. He wrote:
Spread the word please. I would like to speak about TS’s official statement on B.A.P’s lawsuit as an older brother of one of the members. We gave the artists a break in order to protect them? They threatened 3 of the members when they were barely conscious from exhaustion and forced them to carry on with their schedules by giving them IV lines. Only when the parents begged did they give them a break using the word indefinite hiatus. If anything you say is true, show us proof TS and don’t block out Naver real time search rankings.
Zelo’s brother suggests that TS has been working on blocking searches regarding B.A.P and the lawsuit on Korean fan sites. In the days following B.A.P’s lawsuit announcement, several fans and fan clubs came together to overwhelm Twitter, Daum, and Naver with #JusticeforBAP and other search terms related to B.A.P as a sign of support for B.A.P, but many noticed that ranking numbers quickly dwindled during the designated search hours indicating someone may have been resetting search ranks. If this is true, it did not stop fans from trying.
“Where are You? What are You Doing?”
Since the lawsuit announcement, B.A.P members have remained scarce which many feel may be due to orders from attorneys. Crucial Star, however, has posted pictures and video featuring him and Yongguk in Prague, while friends of Zelo and Daehyun have shared selcas of both boys appearing looser and more relaxed. While a lawsuit is stressful, fans are taking comfort in knowing B.A.P members are engaging in normal, everyday activities.
On the fan side, many fan clubs have opted to go on semi-hiatus but remain vigilant in keeping up with the news. Whenever news breaks, Babyz will be on it and keeping the rest of the K-Pop world abreast.
— Joelle Halon.