- HYBE is facing allegations that BTS revenue was utilized to repay $83M USD related to the Ithaca Holdings deal.
- Fans are criticizing HYBE's transparency on how artist earnings are handled.
- The situation adds to existing criticisms about HYBE's corporate governance, as BTS comeback nears.
HYBE, the company behind BTS, is under fresh scrutiny from fans and industry experts. The organization is now facing questions about how it financed a portion of its 2021 acquisition of Scooter Braun-founded Ithaca Holdings, a U.S. music management and rights organization linked with well-known Western musicians like Justin Bieber and Ariana Grande. The 2021 deal made Ithaca a HYBE subsidiary, operating under HYBE America.
As per the most recent claims surfacing on social media networks like X, combined with some South Korean and foreign industry publication reports, approximately ₩120 billion (~$83 million USD) debt tied to the HYBE-Ithaca deal was said to have been paid by using funds that were largely generated by BTS' commercial success. The narrative comes amidst the group's much-anticipated comeback, thus creating all the more ruckus.
According to reports, at the time the acquisition was finalized, HYBE emphasized the strategic benefit of growing into the American market while acquiring top pop singers. Later filings revealed the transaction's entire financial burden, including assumed obligations that amounted to around ₩1.2 trillion (~ $1.05B). Additionally, critics argue that the ₩120B (~ $83M) amount included in the acquisition was part of Scooter Braun's earlier debts, including loans related to his disputed purchase of Taylor Swift's master recordings.
HYBE-Ithaca Deal Funded by Cash Reserves and Debt
A South Korean news outlet New Tamsa reported that HYBE financed its acquisition of Ithaca Holdings primarily by depleting its cash reserves and incurring substantial debt. The publication further said that HYBE used around 74% of its available cash, equivalent to about ₩625.9B, to pay the acquisition. At the time, the company's net financial assets were around ₩840B, indicating that the acquisition used the majority of HYBE's liquid resources.
HYBE reportedly borrowed another ₩560B (~ $386M) for the transaction, with ₩450B from local lenders and ₩110B from offshore sources. This shows that the purchase was funded by a combination of reduced reserves and additional debt, rather than surplus funds.
The article further stated that negotiations for the sale began in February 2021 and were completed by April. According to some M&A professionals cited by the report, the timescale is extremely short for a deal valued at over ₩1T, sparking concerns about the pace of due diligence.
Also, from 2020 to 2021, BTS was HYBE's principal revenue generator. The group's global tours, album sales, and merchandise accounted for the vast majority of the company's revenue, thus many fans and reports indicating that BTS' earnings could have indirectly financed the deal.
However, it must be noted that no one has shared any explicit evidence, nor has the company, HYBE, confirmed or denied the claims. Nonetheless, on X (previously Twitter), fans have been questioning how BTS' financial contributions fit into HYBE's wider corporate strategy, claiming that the debt payoff as a misallocation of artist-generated capital. Their reactions include appeals for increased transparency in HYBE's funding decisions, as well as questions about internal resource priorities.
HYBE's Five-year Old Ithaca Deal Fuels Scrutiny
HYBE has previously defended the Ithaca deal as a long-term strategy to bridge the K-pop and Western music sectors. However, the company later had issues, including the departure of several important Ithaca artists and Scooter Braun's resignation as HYBE America CEO in July 2025.
The matter takes place in the midst of increased scrutiny of HYBE's business practices. Over the last year, the corporation has dealt with unrelated legal problems. One such issue was insider-trading prosecutions, which took place in the first half of 2025, involving former workers, thus leading to separate investigations into executive trading practices. As a result, all these contributed to a more critical public perspective on the company’s governance.
As BTS prepares for its next chapter, concerns about HYBE's financial decisions and management of artist-related revenue are likely to heat up, thereby highlighting conflicts between fanbases and corporate leadership in the worldwide K-pop sector.
