Although HYBE subsidiary ADOR won the first trial in the lawsuit over the validity of its exclusive contract with girl group NewJeans, the prolonged conflict has left both parties struggling ADOR with a staggering revenue drop and NewJeans with a shaken status as Gen Z icons.
On October 30, the Seoul Central District Court’s Civil Division 41, presided over by Judge Jeong Hoe-il, ruled in favor of ADOR, confirming that the exclusive contracts with the five NewJeans members remain legally valid. As a result, the group is not permitted to engage in independent activities without ADOR’s consent.
Despite the legal victory, the prolonged dispute has inflicted significant damage. ADOR’s revenues have plummeted, and NewJeans’ brand value expansion has stalled.
The lawsuit was filed after NewJeans members declared contract termination, citing unmet demands such as the reinstatement of former CEO Min Hee-jin and a halt to HYBE’s alleged devaluation of their achievements. However, the court did not accept these reasons as justification for breaking the contract.
Since debuting in 2022, NewJeans rose rapidly with record-breaking success. Their debut album sold over 310,000 copies in its first week setting a new record for girl group debuts. Their debut song “Attention” became the first debut K-pop song to enter Spotify’s U.S. weekly chart, and their YouTube channel reached 1 million subscribers in just two months. By November 2023, their Spotify streams had surpassed 3 billion.
However, the ongoing legal conflict has dealt a blow to both ADOR and NewJeans. ADOR, which recorded KRW 110.3 billion in sales last year, reported only KRW 17.2 billion in the first half of this year a 72% drop compared to KRW 61.4 billion during the same period in 2024.
The revenue so far largely stems from pre-dispute advertising and performance contracts. With no new sponsorships or events in the pipeline for the second half of 2025, the outlook remains grim. ADOR’s only active artists are NewJeans.
The group, meanwhile, faces its own setbacks. Due to the court’s ruling that they must receive ADOR’s approval for any activity, NewJeans is currently on hiatus. Industry insiders warn that prolonged inactivity could damage their brand value and reduce their competitiveness in the fast-evolving K-pop landscape.
The situation draws comparisons to FIFTY FIFTY, who saw rapid Billboard success but collapsed following a contract dispute. Their legal battle halted all promotions, eroded their fandom, and ultimately derailed their momentum. Some fear NewJeans could follow a similar path if the conflict drags on.
Whether the two parties can reconcile remains uncertain. If NewJeans proceeds with an appeal, the case will move to a higher court. Extended conflict only prolongs the group’s inactivity.
A legal expert noted, “It was legally difficult for NewJeans to win, and considering the members’ young age, prolonged litigation is harmful. The court even suggested settlement twice, but NewJeans maintained a firm stance citing a ‘complete breakdown of trust,’ so no agreement was reached.”
Industry professionals believe a swift resolution is critical not just for NewJeans and ADOR, but for K-pop as a whole. ADOR is struggling without alternate revenue streams, and NewJeans risks losing their footing as Gen Z’s leading icons.
“The longer this goes on, the harder it will be to recover from the brand damage and loss of market trust,” said one entertainment insider. “Ultimately, both the company and the artists bear the cost so a realistic compromise is essential.”
Sources: Daum