Minister Choi Hwi-young on 'FANOMENON' preferential treatment controversy: "All profits will be reinvested"

[Financial News] Minister Choi Hwi-young of the Ministry of Culture, Sports and Tourism (MCST) has proposed reinvesting all profits and limiting the share of performers from specific agencies as measures to ensure public interest amid allegations of preferential treatment for a particular entertainment agency in the K-culture festival FANOMENON.
On the 1st, Choi disclosed on social media an agreement reached with the four major agencies—HYBE, JYP Entertainment, SM Entertainment and YG—saying, "Profits generated by the dedicated corporation will not be distributed as dividends to shareholders; all of them will be reinvested in the next event."
FANOMENON is a K-culture festival scheduled for next December at venues including Seoul Arena and Korea International Exhibition Center (KINTEX) in Goyang, Gyeonggi Province. Controversy arose over the possible monopolization of rights and preferential treatment after JYP Entertainment first filed an application for the trademark of the event being promoted by the Presidential Committee on Popular Culture Exchange.
According to Minister Choi, the share of artists affiliated with the four major agencies in the lineups for the Changdong and Ilsan concerts will be capped at 30%. The dedicated corporation also agreed to implement measures decided and proposed by the Presidential Committee on Popular Culture Exchange to ensure public interest.
These terms will be written into the agreement to be signed with the MCST after the dedicated corporation is established this month. This follows the committee's announcement last month that the trademark rights would be transferred to the dedicated corporation, and gives concrete form to operating principles such as restrictions on dividends and the composition of the lineup.
Minister Choi explained that JYP Entertainment's sole filing for the trademark was a temporary measure agreed upon by him and co-chairman Park Jin-young to secure the brand rights first, as the committee lacked administrative staff in the early days after its launch.
He added that a 50% stake in the domestic trademark rights was transferred to the MCST in April, while the remaining 50% held by JYP Entertainment will be transferred to the dedicated corporation to be established this month. The plan is also to transfer the overseas trademark rights to the government and the dedicated corporation in the same manner once the application process is completed and the necessary conditions are in place.
Minister Choi emphasized that no government budget would be directly injected into the main events at Seoul Arena and KINTEX, with costs covered by private financing, including admission fees, sponsorships, global broadcasting rights and exhibition booth sales.
He added that next year's government budget proposal includes funding to attract foreign tourists and support the participation of small and medium-sized enterprises in the K-culture sector in related events.
Minister Choi said co-chairman Park Jin-young is scheduled to appear as a witness at the MCST's parliamentary audit on the 7th, adding, "I will provide the public and the National Assembly with more detailed information then."
[email protected] Jang In-seo Reporter