Kim Ho-joong's Agency Nears Closure Amid Scandal, Kakao Also Faces Damage

연합뉴스 / 2024-05-28 15:54:43

▲ Singer Kim Ho-joong, accused of a hit-and-run while driving under the influence, bows his head as he arrives at the Seoul Central District Court in Seocho-gu, Seoul, for a pre-trial detention hearing on May 24, 2024, in this pool photo. (Yonhap)

SEOUL, May 28 (Yonhap) -- Singer Kim Ho-joong's agency, Think Entertainment, which is facing closure due to severe financial distress, has left Kakao Entertainment, a 10% stakeholder, bracing for significant losses.

On the 28th, the Financial Supervisory Service's electronic disclosure system revealed that Think Entertainment had accumulated about 12.57 billion won in advance payments by the end of December last year. Advance payments, which are considered liabilities, represent funds received before goods or services are delivered.

Think Entertainment's revenue fell from approximately 25.6 billion won in 2022 to around 18.8 billion won in 2023, with cash reserves plummeting from 9.4 billion won to 1.6 billion won over the same period.

This has led to speculation that Kim Ho-joong might have continued his performances despite various controversies due to the agency's financial pressures. Following his hit-and-run incident involving driving under the influence, Kim proceeded with concerts, including the 'Tvarotti Classic Arena Tour' in Changwon and 'World Union Orchestra Super Classic: Kim Ho-joong & Prima Donna' on May 23.

An industry insider noted, "Concerts generally involve advance payments and contracts with penalties for cancellation. For large-scale concerts, the cancellation fees can be substantial, which Kim Ho-joong likely considered."

▲ Singer Kim Ho-joong (C), accused of a hit-and-run while driving under the influence, and related agency officials appeared at court for a pre-trial detention hearing From left: Lee Gwang-deuk, CEO of Think Entertainment, accused of instructing Kim’s manager to make a false confession; singer Kim Ho-joong, accused of the DUI hit-and-run; and director Jeon, accused of removing the black box memory card from Kim’s vehicle, exit the Seoul Central District Court after their hearing. (Yonhap)

However, Kim Ho-joong's subsequent arrest has dealt a severe blow to Think Entertainment, leading to the cancellation of his performances, including the 'Super Classic' on the 24th and the 'Tvarotti Classic Arena Tour' scheduled for June 1-2 in Gimcheon.

Think Entertainment's CEO, Kwang-deuk Lee, and an executive, implicated in covering up the incident, have also been detained. The agency has since announced the resignation of all employees and the replacement of its CEO, effectively beginning the process of closing down. They have also offered to terminate contracts with their artists, including groups like TAN and actors Kim Kwang-gyu and Son Ho-jun, without conditions if requested.

Kakao Entertainment, which invested 7.5 billion won in 2022 for a 10% stake in Think Entertainment, is now facing the potential loss of its investment due to the agency's impending closure. A Kakao Entertainment representative confirmed the investment but declined to comment on the exact financial impact or future plans.