'company operates under "center system" — more like factory without leader,' expert says
This year marks SM Entertainment’s 30th anniversary — a major milestone for the K-pop powerhouse founded in 1995 by producer Lee Soo-man. The company launched various commemorative projects to mark the occasion, including an SMTown Live 2025 concert in Seoul in January, a compilation album titled “2025 SMTown: The Culture, the Future” in February and the debut of a new girl group, Hearts2Hearts, in the same month.
However, 2025 is turning out to be a year of crisis rather than celebration. Instead of reinforcing its legacy, SM Entertainment has found itself embroiled in a string of controversies involving veteran artists — many of whom have spent over a decade with the agency.
Industry insiders point to the company’s lack of centralized leadership following Lee’s departure in 2023, and its shift to a “center system” that some say has left artists feeling neglected.
In January, several long-standing artists, including Girls’ Generation’s Taeyeon, Red Velvet’s Wendy and Super Junior’s Yesung, publicly voiced frustration over SM Entertainment’s handling of the anniversary concert.
Taeyeon revealed on fan communication platform Bubble that she had planned to perform two to three songs, but was not given sufficient support from the company. Both she and Wendy ultimately pulled out of the concert. SM Entertainment attributed their absence to “personal reasons,” but the withdrawals hinted at deeper internal issues.
The tensions did not stop there. In March, INB100 — the agency representing EXO’s Xiumin for his solo career — accused SM Entertainment of pressuring local broadcaster KBS to exclude the singer from “Music Bank.” While Xiumin remains signed to SM for EXO’s group activities, the agency claimed SM’s interference was hindering his solo promotions. The move drew backlash and revived memories of previous disputes involving SM, including the long-standing legal battle with TVXQ and JYJ in 2009.
On Friday, SM Entertainment also confirmed the departure of Red Velvet's Wendy and Yeri, stating only that it would “support their new journey ahead.”
While it is common for idols to part ways with their original agencies after pursuing solo careers, Wendy had previously voiced dissatisfaction with the company — suggesting the departures may have stemmed from more than a routine contract expiration.
Stephanie Choi, a postdoctoral researcher at the Asia Research Institute at the University of Buffalo, pointed to the absence of strong leadership as SM Entertainment’s key challenge.
“In the past, SM Entertainment was led by Lee Soo-man, whose strong intuition for successful productions earned the trust of both artists and fans,” Choi, whose research fields include popular music culture and K-pop, told The Korea Herald on Wednesday. “They followed him because they believed in his vision, and the results proved them right.”
“Now, the company operates under a ‘center system’ — more like a factory without a branded leader. Some centers perform well, while others don’t. These are managed by employees, and from the artists’ perspective, there’s no longer the same trust in the decision-making process," she added.
The “center system,” adopted by SM Entertainment in 2023, is a multiproduction structure that divides the company into separate creative units or “centers” — each responsible for managing different artists and content, with the aim of enhancing autonomy, efficiency and diversity in production.
Music critic Kim Yoon-ha echoed the sentiment, though she noted that veteran artists seeking independence after a decade with a label is not uncommon.
“There are many idols within SM who’ve been under contract for over 10 years. That naturally leads to a stronger desire for autonomy,” said Kim. “Artists like Xiumin or Wendy, who are departing or seeking different paths, have each worked under the company for more than a decade. If these cases involved younger idols only a few years into their careers, it might be seen as unusual — but long-serving artists have good reason to want change."
“Still, Lee Soo-man’s absence is significant,” she added. “He was the one who discovered and nurtured these artists. And there’s growing frustration around the center system. There appears to be a gap in artist care — a sense of neglect. Both Taeyeon and Wendy alluded to this on Bubble.”
jaaykim@heraldcorp.com
