When Kang Daniel announced he was suing the majority shareholders of Konnect Entertainment — the very company introduced to the public as his label — a lot of fans were stunned.
According to his official statement, contracts were signed without his knowledge, funds were allegedly embezzled, corporate cards were used without approval, and over $1.3 million was withdrawn from his personal account without consent.
The obvious question followed:
- If he founded the company, how could someone else be the majority shareholder?
- If he was CEO, how could he not know what was happening?
That confusion reveals something bigger. There’s a romantic narrative that once an artist becomes powerful enough, the next logical step is to “be your own boss.” Start your own label. Own everything. Control everything.
But running a label is not an aesthetic. It is a capital-intensive, legally complex, operationally relentless business.
And history shows: being talented, respected, or even wealthy does not automatically make someone structurally equipped to run one.
Let’s walk through why.
Hurdle #1: Money Changes the Power Dynamic
In 2020, Lisa reportedly lost nearly $900,000 to her long-time manager. She had entrusted him with funds for a property purchase in Korea. He misappropriated the money.
This wasn’t a rookie artist. This was one of the biggest global pop stars of her generation.
The situation involving Tiger JK and Yoon Mirae was even more devastating. At the height of their careers, they delegated the business side to trusted managers so they could focus on music. Within a year, they were allegedly scammed out of $4.7 million. While dealing with family tragedy, the company was sold. Legal recourse became nearly impossible.
Comedian Park Soo Hong had to sue his own brother for allegedly embezzling tens of millions of dollars over years of management control.
These cases share one pattern – Creative power does not equal corporate oversight.
When artists launch their own companies, they still need:
- A CFO
- Legal counsel
- Accounting systems
- Contract oversight
- Internal controls
Many artists build their companies around people they trust emotionally, not structurally but trust is not governance.
Running a label requires systems that assume betrayal is possible. That’s not cynicism — that’s corporate design.
Hurdle #2: Passion Does Not Guarantee Profit
When Hyolyn left Starship and launched Bridg3, she gained artistic freedom. She released albums, collaborated widely, and remained active.
But she later admitted she was barely breaking even.
Freedom came with:
- Staff salaries
- Studio rentals
- Production budgets
- Administrative overhead
Similarly, actor Lee Jae Hoon founded Company On in 2021. On Yoo Jae Suk’s YouTube talk show, he admitted he now works harder than ever. Rent, vehicle leases, payroll, utilities — the bills do not pause between acting projects.
Artists often assume that they already know this industry but knowing how to perform inside a system is not the same as building and financing one.
Hurdle #3: Cash Flow Is King — Even in K-Pop
A label’s expenses are fixed and recurring:
- Salaries (monthly)
- Rent (monthly)
- Utilities (monthly)
- Insurance (monthly)
- Taxes (quarterly or annually)
- Vendor contracts (ongoing)
- An artist’s income is not.
It’s seasonal:
- Album cycles
- Touring windows
- Brand campaigns
- Revenue might spike in Q2 and collapse in Q4.
This is why larger corporations diversify content pipelines. HYBE continuously releases content, merch, digital products, and multi-artist projects. It isn’t random output. It’s cash-flow engineering.
When an artist runs their own label, they become responsible for smoothing those cycles.
That means:
- Building IP libraries
- Managing distribution schedules
- Structuring advances
- Negotiating licensing
- Forecasting 12–24 months ahead
And when fans criticize overproduction or monetization strategies?
The blame lands directly on the artist-CEO. There is no buffer executive layer.
Hurdle #4: Financing Isn’t Optional — It’s Structural
Albums, even minimalist ones, cost money upfront.
Typical expenses:
- Song acquisition or production fees
- Studio time
- Mixing/mastering
- Choreography
- Styling
- MV production
- Marketing
- Distribution
- Manufacturing (if physical albums)
Concerts are even heavier:
- Venue deposits
- Stage construction
- Lighting/LED
- Sound engineering
- Rehearsals
- Insurance
- Security
- Staff wages
Revenue from tours often arrives months after the event — after settlement and deductions.
Even artists with significant personal wealth rarely self-finance entirely. It is high risk. That’s why Baekhyun reportedly used financing instead of purely personal funds when launching his company.
Because personal wealth ≠ infinite liquidity.
And here’s the math problem people underestimate:
Let’s say you have 3–5 full-time employees.
Even modest salaries plus mandatory employer contributions quickly approach six figures annually — before you produce a single song.
Interest income from savings at 3–4% will not fund a scalable label.
That’s why investors enter the picture which comes with equity which comes with influence.
Which brings us back to Kang Daniel.
Hurdle #5: Majority Ownership Is Not Always the Artist
When investors inject capital, they often receive:
- Preferred shares
- Voting rights
- Board seats
- Financial oversight powers
An artist may be the public face and CEO in title — but ownership percentages determine control.
The entertainment business is full of founders who do not control their own companies after funding rounds.
This is not unique to K-pop. It’s startup math.
Hurdle #6: Legal and Regulatory Constraints
Artists sometimes imagine independence as absolute freedom.
In reality:
- Korean labor laws protect employees strongly
- Contract termination requires just cause
- Severance obligations apply
- Tax structures are complex
- Reporting obligations are strict
You cannot simply “fire everyone and start over.”
You cannot ignore compliance because you’re an artist.
And once you are a public figure running a company, you become a regulatory target.
The Leessang building dispute involving Leessang illustrated how celebrity status can amplify business conflicts into public controversy. Visibility increases scrutiny.
The more famous you are, the higher the reputational risk of any corporate decision.
So Why Don’t BTS Just Start Their Own Label?
First: we don’t know their long-term plans.
But structurally speaking, they already achieved something many artist-founders never do.
They partnered early with Bang Si Hyuk, scaled inside a system, and helped build HYBE into a multi-billion-dollar corporation.
They participate in governance. They own equity. They benefit from institutional infrastructure.
Running a label is not a badge of honor. It’s a full-time executive occupation.
If BTS members choose to:
- Focus on artistry
- Expand into production
- Invest strategically
- Sit on boards
- Or step back entirely
None of that signals incapability, it only means they want to allocate their energy to things that matter the most.
Being CEO is not automatically more powerful than being a cultural force with ownership stakes in an existing global platform.
The Bigger Point
There’s a tendency in fandom culture to equate independence with moral superiority.
But independence in corporate terms often means:
- Capital exposure
- Legal liability
- Payroll responsibility
- Operational stress
- Reputation risk
Creative excellence and executive management are two different disciplines.
Some artists successfully bridge both. Many struggle. Some lose millions learning the difference.
Before asking why smart celebrities don’t just “do it themselves,” it’s worth asking a more grounded question:
Do they actually need to?
Impact, longevity, and ownership can exist without sitting in the CEO chair.
And sometimes, choosing not to be CEO is the smarter business decision of all.
FAQ Section
Is starting a label cheaper if you’re already rich?
No. Album production, marketing, payroll, and tour financing require millions in upfront capital. Personal wealth does not guarantee sustainable business liquidity.
Do artists lose control when they take investors?
Often, yes. Investors typically receive equity, voting rights, and board influence, which can reduce founder control.
Does owning a label guarantee creative freedom?
Not necessarily. Budget constraints, payroll obligations, and regulatory compliance still limit decision-making.
Why hasn’t BTS created their own company?
They already hold equity in HYBE and benefit from institutional infrastructure, which allows them influence without full operational liability.
