Due to Blackpink's absence, YG's operating profits are decreasing.
The growth of new artists will significantly impact YG's sustainability.
[TVDaily Reporter Kim Ji-hyun] YG Entertainment, led by Yang Min-seok, is making efforts to revitalize its image by launching a new boy group and unveiling members of the upcoming girl group Nextmonster. However, the market response remains lukewarm due to the company's heavy reliance on Blackpink, showcasing a precarious revenue structure.
According to YG’s recent business report for 2025, the company posted revenues of approximately 545.4 billion won, but net profits were only around 80.9 billion won, resulting in an operating profit margin of 14.8%, falling short of market expectations. While concert revenues soared to 126.3 billion won, largely thanks to Blackpink's world tour, the absence of their activities in 2024 led to a mere 6.5 billion won in operating profits, underscoring the fact that Blackpink remains YG's primary revenue generator.
Moreover, despite last year’s efforts by Treasure and BabyMonster to diversify their activities, their contributions have been limited, leading to management expenses soaring to 194 billion won. The staffing costs came in at around 42 billion won, with Yang Hyun-suk's salary soaring to 2.763 billion won, making him the highest earner in the industry. If significant profit improvement does not manifest in the first quarter of this year, the launch of the new boy group may be perceived merely as a temporary measure to mask poor performance.
Yang Hyun-suk's position within YG is pivotal. His decisions greatly influence the company’s strategic directions, and the current financial woes are closely tied to his management style. The heavy reliance on major artists like Blackpink limits YG’s long-term growth prospects. While the launch of a new boy group may seem like a positive move, its effectiveness remains uncertain.
Considering the time necessary for new artists to mature, their success will significantly impact YG’s overall performance. The current financial struggles arise not just from a lack of artist activity, but from the company's broader business model. Without addressing these structural issues, expecting long-term success becomes challenging.
Finally, the fact that Yang Hyun-suk receives the highest salary in the industry indicates that YG is still a profitable company, but this may not necessarily be a positive sign. High personnel costs can threaten the return on investment and could hinder the necessary financial support for nurturing new artists.
This article is KOSTAR’s reinterpretation of a story originally reported by TVDaily.
Photo: TVDaily
