The seat left by the founder, whose K-POP has become?

From February to March 2023, the most intense news in Korea’s popular music industry was not generated on stage—but in boardrooms, courtrooms, and stock trading screens: a head-on acquisition battle between Hive and Kakao over SM Entertainment’s management rights. This dispute, lasting just over a month, was far more than a simple corporate conflict; it was the most explicit—and most capitalist—answer yet to the question: “Who owns K-pop?”

The spark was surprisingly small. Activist fund Align Partners held only about 1% of SM’s shares, yet it zeroed in on a structure where the founder’s personal company, “Like Planning,” collected royalties equal to 6% of SM’s annual revenue. Over 22 years, roughly 140 billion won slipped away. That 1% rebellion became the first domino that toppled the first‑generation K‑POP empire.

The rollout was swift and rough. When Kakao announced on February 7 that it would secure about 220 billion won in new shares and convertible bonds—equivalent to a 9.05% stake—Lee Soo‑man filed an injunction to block it. Immediately afterward, he transferred his own 14.8% holding to Hive for roughly 422.8 billion won. In order to confront the executives who had pulled the founder out, he allied with the strongest competitor.

On March 3, after the court granted a provisional injunction blocking Kakao’s issuance of new shares, Kakao shifted to a direct, head-on strategy. In response to HYBE’s public tender offer of ₩120,000 per share, Kakao launched its own public tender offer at a commanding price of ₩150,000 per share, aiming to acquire approximately 35% of SM Entertainment’s shares. SM’s stock price surged to a closing high of ₩147,800 in early March—setting a new record. It was the moment when “stock price,” not music, became the true protagonist of this industry.

The outcome was decided on March 12. HYBE announced the termination of its acquisition process and sold part of its stake in SM to Kakao, withdrawing from the contest. Kakao secured approximately 39–40% of SM’s shares, becoming SM’s new controlling shareholder, while Lee Soo-man—once the company’s largest shareholder—completely lost control. Thus, the era of “Lee Soo-man Solo Producing,” which began in 1996 with H.O.T., has officially—and administratively and legally—come to a close.

“SM 3.0,” unveiled by SM at the heart of this dispute, symbolizes this transformation: a shift from a single chief producer to a multi-producing system across five production centers, and improved operating profit margins following the split with Like Planning. The rationale was clearly progressive. Yet this same rationale was simultaneously invoked to justify the wholesale absorption of the entertainment industry by massive IT platforms—marking K-POP’s transition from “the creator’s hands” to “the platform’s asset.”

This war left more than just winners in its wake. The prosecution launched an investigation into Kakao, suspecting the company of manipulating stock prices—mobilizing approximately 240 billion won to prop up SM Entertainment’s share price in support of Kakao’s public tender offer for HYBE (at 120,000 won per share). In April, prosecutors raided Kakao’s headquarters. Thus, at the very pinnacle of Korea’s most dazzling cultural industry—K-pop—a textbook case of capital-market crime emerged.

A counterargument is possible. The influx of massive capital was precisely what propelled the previously small-scale K-POP industry into a global enterprise, and ending founder-dependent, opaque corporate governance structures reflects, in this view, the industry’s maturation—a point with merit. Yet if the price of that maturity is market manipulation allegations, we must ask again: What have we gained—and what have we sacrificed?

Throughout the month-long acquisition battle, one thing remained conspicuously absent until the very end: the fans. While hundreds of billions of won changed hands, stock prices fluctuated wildly, and legal disputes unfolded in court, the very people who loved that company’s artists and whose passion for the music had created the industry’s value were granted not a single vote—not even a single word of say in the matter. They were merely the “evidence” supporting asset valuation, never the “subjects” of the transaction.

The first quarter of 2023 proved that K-POP had undeniably become a massive industry. At the same time, it starkly revealed that neither music nor fans have a seat at the conference table where the industry’s future is decided. When capital filled the void left by the founder’s departure, what we truly lost may not have been just one person’s empire—but rather, the final illusion that “this industry ultimately belongs to music and people.”