(Original title: Cai Xukun’s contract termination turmoil resurgence, former boss reveals multiple evidences to recover compensation! Top-tier artists are enough to support a company)
Not long ago, the prospectuses of Lehua Entertainment and Fenghua Qiushi made the public aware of the powerful ability of top artists to attract money. In the face of huge interests, contract disputes between brokerage companies and artists are also increasing.
Recently, Cai Xukun’s former agency Shanghai Yihai Film and Television Culture Communication Co., Ltd. (Yihai Culture) released a lot of evidence through Weibo, saying that it will pursue economic compensation for Cai Xukun’s early termination of the contract through legal channels.
Termination of the contract makes waves again
The contract termination dispute between Cai Xukun and his former owner Yihai Culture can be traced back to 2015.
In 2015, Cai Xukun signed a contract with Haoyang Media (Hunan) Co., Ltd. for participating in the “Star Moving Asia” program. During the program recording process, due to the transfer of the program producer, Cai Xukun was told to re-sign the contract, otherwise he would not be able to continue participating in the program. In order to continue to complete the program recording, on November 17, 2015, Cai Xukun signed a brokerage contract with Yihai Culture.
After the contract was signed, the two parties signed a supplementary contract in June 2016 to modify Cai Xukun’s compensation for termination of the contract. For example, the compensation for Cai Xukun’s unilateral termination of the contract was changed from 8 million yuan to 80 million yuan, and the compensation for early termination of the contract was changed from 3 million yuan per year. Revised to 30 million yuan per year.
In 2017, Cai Xukun proposed to Yihai Culture to terminate the contract and filed a lawsuit. The main reason is that Yihai Culture unilaterally increased the contract liquidated damages and compensation at will, and also required Cai Xukun to bear the cost of his performing arts activities and extract a high share of his performing arts activities.
In addition, Cai Xukun believes that Yihai Culture has not fulfilled the performing arts brokerage obligations stipulated in the contract, failed to fulfill the management and operation obligations of artist brokerage affairs, and failed to make a complete and reasonable plan for its performing arts career, so it was unable to improve its performing arts career. Professional and stable support.
However, Yihai culture tells another story. It stated that on November 12, 2015, it signed a brokerage contract and a supplementary agreement with Cai Xukun, agreeing that he would be Cai Xukun’s exclusive sole agent, and the contract period would end on April 17, 2023.
After signing the contract, the company arranged for Cai Xukun to participate in the large-scale developmental talent show “Star Asia”, and arranged to go to Korea to receive artist training and release albums, etc., helping Cai Xukun develop from a middle school student to an official debut artist.
In January 2017, the company notified Cai Xukun to participate in performance activities, but was rejected. After that, Cai Xukun refused to participate in any activities arranged by the company. On February 10 of that year, Cai Xukun proposed to terminate the “brokerage contract”, and then filed a lawsuit with the court, requesting the cancellation of the brokerage contract.
Yihai Culture does not agree to terminate the contract. In the counterclaim, Yihai Culture requested that Cai Xukun be ordered to pay 50 million yuan in damages for breach of contract, and pay 70% of all the performing arts income (including the later advertising endorsement income) obtained from his appearance in the online drama and variety show “Idol Trainee” to the company .
On October 29, 2018, the Jing’an Court issued a judgment to terminate the brokerage contract and compensation agreement signed by both parties. However, regarding the compensation issue caused by the termination of the contract, the judgment stated that the two parties can negotiate on their own, and if the negotiation fails, they can claim the corresponding rights separately. This also became the source of future disputes between the two parties.
The former owner posted multiple expenditure evidence
Since September 2021, the case of Yihai Culture suing Cai Xukun for entrusting contract disputes has been held several times. On December 1, the second trial of the dispute between Yihai Culture and Cai Xukun will be held.
From November 16th to November 21st, Yihai Culture, Cai Xukun’s former brokerage company, posted multiple Weibo posts in succession, explaining the litigation with Cai Xukun and disclosing a number of expenditure evidence.
Yihai Culture said that after signing the contract with Cai Xukun in November 2015, the company invested a lot of money and resources in performing arts training, image building and publicity and promotion, and its early termination of the contract caused our company to suffer huge losses.
The evidence released by Yihai Culture includes the training contracts signed for Cai Xukun and other trainees and the details of some training and even plastic surgery expenses. In addition, there are photos of the company arranging promotional activities for Cai Xukun’s group. Related materials have attracted high attention on Weibo .
(Expense details announced by Yihai Culture)
In addition to going to court directly over the dispute over the termination of the contract, relevant legal documents show that in recent years, Yihai Culture has also sued Cai Xukun and the products and companies he endorsed many times, including L’Oreal, Yangshengtang, VIVO, etc.
For example, it once sued Cai Xukun, Cai Xukun’s studio and VIVO company, believing that Cai Xukun and Cai Xukun’s studio cooperated with VIVO company without the company’s consent, agreed that Cai Xukun was the spokesperson of the vivox23 series mobile phones, and shot a lot of advertisements and posters and other publicity material.
Yihai Culture believes that its behavior has violated its exclusive brokerage rights, constituted unfair competition, seriously damaged the legitimate rights and interests of Yihai Company, and caused heavy economic losses to Yihai Company. However, most of these lawsuits ended with the withdrawal of Yihai Culture.
A top artist is enough to support a company
While disputes with Cai Xukun continued, Yihai Culture’s own operating conditions were not optimistic.
According to the information from the enterprise search, Yihai Culture had many labor disputes, and because of its ability to perform, it refused to perform the obligations determined by the effective legal documents, and became a dishonest person subject to enforcement, with a total amount of 5.86 million yuan not fulfilled. The company also has 13 restricted high consumption records.
For Yihai Culture, the value of Cai Xukun as a top artist is undoubtedly huge. The result of the dispute with Cai Xukun at this time will inevitably have a major impact on the management of Yihai Culture.
In recent years, through the listing application materials submitted by some brokerage companies, the outside world has been able to get a glimpse of the huge role of top artists in related brokerage companies.
For example, the prospectus of Lehua Entertainment shows that in the first three quarters of 2022, the company achieved revenue of 753 million yuan, a decrease of 15.9% from 895 million yuan in the same period last year. Among them, the income attributable to the number one artist accounted for 58.8% of the total income in the same period.
This means that in the first three quarters of this year, Leroy’s top artist Wang Yibo contributed nearly 60% of the company’s revenue. The prospectus information shows that the contract between Wang Yibo and Lehua Entertainment has been renewed until October 2026.
According to data released by another company, Fenghua Qiushi, the artist Luhan also accounts for a large part of its income. Fenghua Qiushi signed an exclusive music contract with Luhan in 2015. In fiscal year 2018, Fenghua Qiushi earned 70.9 million yuan from Lu Han, accounting for 70.6% of the company’s total revenue that year.
However, too much reliance on top artists has also brought negative effects. In the past two years, with the reduction of Luhan’s activities, Fenghua Qiushi’s income has also declined. From 2019 to the first half of 2022, Luhan’s directly attributable revenues are 14.2 million yuan, 15 million yuan, 7.6 million yuan and 1.07 million yuan, respectively accounting for 25.5%, 21.2%, 9.3% and 25.2% of the company’s total revenue .
Up to now, the listing of Lehua Entertainment and Fenghua Qiushi in Hong Kong is still in progress.