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YG Entertainment to pull out of golf business

By Kim Jae-heun jhkim@koreatimes.co.kr

YG Entertainment is reportedly preparing to close its golf business that it started four years ago — as part of measures to make up for its decreasing profit caused by the vacancy left by Big Bang, once YG’s main source of profit.

According to a local report by The Korea Economic Daily, Monday, the talent agency will sell off 100 percent of its share in Greenworks, an operator of the country’s top golf reservation platform XGOLF. YG Entertainment’s subsidiary YG Plus owns Greenworks.

However, YG Entertainment said nothing concrete has been decided.

“We are currently expanding our main business of entertainment and merchandising based on our strategy for the company’s future business. Various aspects of our business portfolio are under review, but no specific decision has been made yet,” a YG Plus official said.

Last year, Greenworks recorded 11.2 billion won in sales and an operating profit of 3.2 billion won. Considering that the company’s revenue and profit were a respective 9.8 billion won and 2 billion won in 2017, when YG Plus acquired Greenworks, the figures hadn’t shown substantial growth.

However, the market sees potential in the platform operator, as the popularity of golf is growing tremendously among those in their 20s and 30s. Greenworks has also started providing a link service with Naver, a local IT giant.

Last year, YG Plus attempted to dispose of Greenworks to a local private equity fund but the deal fell through. YG Plus has put its golf affiliate out on the market once again, but now that Kakao has launched its thriving golf reservation service, the outlook for Greenworks’ sale is uncertain.

YG was enjoying its heyday four years ago when it took over Greenworks for 31.5 billion won. Back then, its star K-pop boy band Big Bang was the most profitable music group in the country and many investors — foreign and local — were contacting the talent agency’s management team to offer investments.

But as the members of Big Bang had to serve their mandatory military service, the music label decided to alleviate the risk by advancing into different business sectors.

Starting from 2014, YG Entertainment acquired a public relations firm and a cosmetics brand and launched Korean barbecue restaurant chains.

However, after suffering fallout over a criminal scandal allegedly linked to Seungri, a former member of Big Bang, a number of YG Entertainment’s businesses began to record deficits. The talent agency already pulled out of the food and beverage business as well as cosmetics. Its stock price collapsed, pushing the firm to raise cash for repaying debts to investors. In the end, YG Entertainment decided to go back to what it’s good at, entertainment.

Business

en-kr

2021-08-03T07:00:00.0000000Z

2021-08-03T07:00:00.0000000Z

https://ktimes.pressreader.com/article/281651078151238

The Korea Times Co.