The brand violated the contract.
SM Entertainment and clothing brand Teddy Island previously had a disagreement that was publicized through their social medias. NCT Dream was under a contract for endorsement with the brand. On October 13, 2023, Teddy Island had set up a pre-order event with fan benefits. A week later on October 18, SM Entertainment responded by claiming that they had never agreed to such an event with the brand. Teddy Island countered that the company had agreed previously.
Netizens React To Public Disagreement Between SM Entertainment And Clothing Brand TEDDY ISLAND
On October 30, 2023, SM Entertainment suddenly announced that their contract with Teddy Island had been terminated. They cited unfulfilled payment as part of the reason for termination.
Hello. This is SM Entertainment. We wish to tell you our company’s stance regarding the recent case with Teddy Island, for which NCT Dream has been the model of. We signed a contract with Teddy Island in 2022, and NCT Dream became active as their model.
But Teddy Island has not paid out the model fee that was stipulated in the contract. Although we have pressed them for the fees a few times, Teddy Island has been continuing to use our artists’ portraiture to advertise for their brand without paying the model fees. In May 2023, they announced a fansign unilaterally, without finalising discussions with us. Our company could not go through with it as such.
— SM Entertainment.
Although SM Entertainment had asked Teddy Island to halt their usage of NCT Dream’s photos and more, the brand refused to listen.
As such, we have taken measures to protect our artist since June 2023, and to stop the confusion amongst fans. We requested Teddy Island to stop using our artists’ portraiture for advertisement immediately, and notified them that the model contract would be terminated.
Even though the situation was as the above, Teddy Island continued to illegally use our artists’ portraiture on their homepage, etc. It was only after the contract was terminated that they paid a portion of the model fees through bank transfer, and have been claiming that it was our company that did not follow the contract. Recently, they even announced a pre-order event using our artists’ autographs and portraiture for photocards and other merchandise without discussion.
— SM Entertainment.
SM Entertainment tried to rectify the situation for fans that were affected. As the brand previously announced a fansign without prior authorization from the company, it was canceled eventually. SM Entertainment tried to make it up to fans by suggesting a compromise with the brand, but to no avail.
In order to stop the damage caused to our artists and to the fans, we quickly uploaded an announcement regarding the Teddy Island pre-order event on October 18. Even so, we tried to solve the issue as far as we could, for the sake of the fans who had been waiting for the fansign event. So we have suggested many options to Teddy Island, including reinstating the canceled fansign event and more, but Teddy Island turned the responsibility of the terminated contract to us. They have also been making unreasonable requests of us up to recently. Hence, we cannot come to a compromise with them any longer.
We wish to confirm once more that the current events regarding NCT Dream that are being advertised and announced on Teddy Island’s homepage, etc, have nothing to do with our company. We hope that the fans take note such that they will not be affected any longer.
— SM Entertainment
Teddy Island has not yet replied to the statement.