Income of Top Entertainment Agencies

Something that really annoys me is when news sites report on the revenue of idol groups/entertainment agencies. These figure are seemingly large, and elicit from readers the expected gasps and ‘wows‘ but don’t really paint a true picture of their financial position. Instead, a more realistic number to look at is ‘profit‘ rather than ‘revenue‘. The figures below may shock you, especially JYP’s negative profits in 2009.

Just a quick explanation for those who aren’t familiar with some of the terms. Revenue is what you earn from selling something. So for example, if I sold a burger for $10, then my revenue would be $10. However, if I spent $5 (expense) in making that burger, then my profit would only be $5. Profit = Revenue – Expense. In the tables below, ‘net income‘ refers to ‘profit’ after tax has been taken out.

Information for SM and JYP were sourced from the Repository of Korea’s Corporate Filings. However, there wasn’t detailed information about YG so had to go on their company website and Google translate some stuff (wow I am sad haha).

All the amounts are expressed in US$.

SM Entertainment:

YG Entertainment:

JYP Entertainment:

Does anyone else think that this is really interesting? I took the graph below from YG’s 2011 Investor Relations Package. Notice how much revenue the agencies are earning, but then compare this to the proportion of net profits against revenue. In 2010, the actual profit of all three major agencies added together was less than US$ 30 million.

So what do you guys think? 

xoxo

Nic

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