YG Entertainment To Sell Studioplex Majority Stake

YG Entertainment‘s decision to sell 60% of its shares in Studioplex by the year’s end marks a strategic shift in the company’s approach to its drama production endeavors.

Will YG Entertainment Sell Its Studioplex Shares?

A new report reveals that YG Entertainment is planning to sell its shares in the studio by the end of the year. Since then, the company confirmed its plans in a statement.

“We are in the process of selling a portion of Studioplex shares to a production company with the aim of establishing a robust and competitive business structure aligned with our core operations,” they said. “We are dedicated to strengthening the production environment to ensure fiscal soundness.” 

Established in 2017 under YG’s umbrella, Studioplex was conceived as a means to capitalize on the burgeoning demand for high-quality dramas amidst stiff competition from industry rivals like SM Entertainment and JYP Entertainment.

The rationale behind this move was clear: by integrating drama production with talent management, YG aimed to create synergies that would not only diversify its revenue streams but also enhance its overall market positioning. However, despite initial optimism, Studioplex encountered its fair share of challenges along the way.

The Studio Problem

One notable setback was the controversy surrounding the SBS drama ‘Joseon Exorcist’ which aired in March 2021. The series faced intense scrutiny for its historical inaccuracies, prompting swift cancellation after just two episodes. This misstep not only tarnished Studioplex’s reputation but also resulted in substantial financial losses, as all production costs had to be written off.

Similarly, the tvN drama ‘Mr Queen,’ also produced by Studioplex and sharing the same writer, faced criticism for its portrayal of historical events. These controversies, coupled with declining performance and mounting debt, necessitated a reevaluation of Studioplex’s strategic direction.

By divesting a significant portion of its shares and relinquishing management rights, YG Entertainment aims to streamline its operations and refocus its resources on core business activities. The decision also reflects a commitment to adaptability and a willingness to make tough choices in the face of adversity, positioning YG for sustainable growth in an ever-evolving entertainment landscape.