SM Entertainment founder Lee Soo-man debuts new agency with non-Korean trainee lineup – Music Business Worldwide

Lee Soo-man, founder of K-Pop giant SM Entertainment, has returned to the entertainment industry with A2O Entertainment, with its initial roster dominated by non-Korean trainees due to contractual restrictions with HYBE.

The development, as reported by multiple news outlets in South Korea, marks a comeback for Lee after his departure from SM Entertainment.

Lee’s journey in K-Pop began in 1995 when he founded SM Entertainment, which became one of South Korea’s most influential entertainment companies. Under his leadership, SM Entertainment developed the systematic training model that would become the blueprint for K-Pop idol development, launching acts such as H.O.T., Girls’ Generation, EXO, NCT, and aespa.

However, Lee’s relationship with SM Entertainment ended dramatically in early 2023.

In October 2022, SM Entertainment announced that the company would terminate its production contract with Lee’s company, Like Planning, by the end of that year. By February 2023, SM had announced its new strategy, ‘SM 3.0: IP Strategy – Multi Production Center/Label System,’ which excluded Lee’s production company.

A power struggle ensued as Kakao Entertainment acquired a significant stake in SM and partnered with the company to fund its new direction. Lee, opposing these moves, filed a lawsuit to block the issuance of new shares and convertible bonds.

“Throughout their training, the rookies will showcase captivating performances on the A2O Channel, either as solo acts or as units.”

Ultimately, Lee sold his stake in SM to the company’s rival, HYBE, sparking a battle for control of the company. HYBE, with Lee’s support, aimed to acquire SM, while SM executives and Kakao sought to maintain their position. Kakao eventually gained de facto control of SM.

Reports surfaced this past June indicating Lee’s intention to re-enter the K-Pop scene by establishing a new agency. His company, Blooming Grace, had already taken steps to secure the trademark for A2O Entertainment in May, The Korea Herald reported, citing Korean Intellectual Property Office records.

At the time, the news outlet reported that A2O Entertainment was a proposed brand for a company involved in various entertainment businesses, including video games and advertising.

Most recently, A2O Entertainment unveiled its first slate of trainees through a promotional video released on October 25 via YouTube and Weibo (a Tencent-owned social media platform in China), introducing artists categorized into three groups: Rookie HTG (High Teen Girls, 16 and older), Rookie LTG (Low Teen Girls, 15 and younger), and Rookie LTB (Low Teen Boys, 15 and younger).

A2O Entertainment’s launch comes with a new music genre that the agency dubbed as “Zalpha-Pop,” targeting the Zalpha generation (Gen Zs and Alpha, born from the mid-1990s to the 2010s). The agency’s YouTube page has already attracted over 5,000 subscribers and nearly 95,000 views.

“Throughout their training, the rookies will showcase captivating performances on the A2O Channel, either as solo acts or as units. Please join us in supporting these rookies as they develop and debut as artists,” the agency said, according to The Korea Herald.

However, Korea JoongAng Daily reported that Lee’s new venture faces certain limitations. Due to a three-year non-compete clause in Lee’s agreement with HYBE, his production activities are currently restricted to overseas projects.

The Korea Herald said this explains the significant presence of Chinese trainees in A2O’s lineup and suggests the agency’s operations will primarily focus outside South Korea. The Korea Times reported that A2O held auditions for trainees in China and Japan last June.

Reports indicate Lee attempted to negotiate the removal of this three-year restriction but was unsuccessful.

Music Business Worldwide