Bullying, vague contracts, threats to livelihoods and pressure on competitors are used by talent agencies to keep their entertainers in line and under their control, a survey by the Fair Trade Commission showed.

The survey results, released on Dec. 26, were sent to talent agencies with FTC warnings not to violate the Anti-Monopoly Law.

It was the FTC’s first survey of contracts and problems in the music and broadcasting industries.

The survey received responses from 810 companies, or 30 percent of the talent agencies contacted. It also interviewed actors and other entertainers.

Twenty-six percent of the companies said they use “all verbal” contracts with entertainers, while 16 percent said their contracts are “partially verbal.”

The reasons cited were “no issues have arisen so far,” at 54 percent, and “it has always been done verbally,” at 38 percent.

Although such contracts are not illegal, the FTC warned that ambiguous contracts could put the entertainers at a disadvantage, potentially leading to an abuse of superior bargaining power, which is prohibited under antitrust laws.

The FTC said the contracts should be made in clear, written form.

The survey also found that about a quarter of talent agencies hold the right to unilaterally extend a contract, even if the entertainer wants to leave that agency at the end of the term.

Of these agencies, 10 percent said they have exercised this right, leading some performers to abandon their plans for independence or to move to another company.

The FTC said if talent agencies exercise this right against the wishes of the entertainers, it constitutes an abuse of superior bargaining power.

Some entertainers have tried to ignore the unilateral extension of their contracts.

They reported that their agencies issued threats that they would never again get work in the industry or spread “negative publicity” about them to their intended new agencies and the media when they tried to transfer or gain independence.

One percent of the responding talent agencies said they had faced pressure from their performers’ former agencies, while 3 percent reported some degree of pressure.

The FTC said such pressure could constitute interference with business transactions.

Some entertainers reported being forced by their agencies to change their stage names or group names without a reasonable explanation, even though the loss of the name recognition would hurt their careers.

Three percent of the talent agencies said they impose restrictions on the use of stage names, and 2 percent on group names.

The FTC indicated this practice could constitute a refusal to trade.

The anti-monopoly watchdog plans to issue preventive guidelines possibly in 2025.

The FTC conducted the survey of 2,628 talent agencies between April and November. It received responses from 810 companies.

It also interviewed 95 stakeholders, including 29 entertainers and employees at broadcasters and music companies.

In addition to the survey, the FTC received information online from 901 people, including entertainers and talent agency officials. Some requested anonymity.

SMAP DISBAND TRIGGERED SURVEY

The survey was prompted by the disbandment of SMAP, one of Japan’s most popular idol groups, in late December 2016.

After three SMAP members--Goro Inagaki, Tsuyoshi Kusanagi and Shingo Katori--left Johnny & Associates Inc. in September 2017 to became independent, their appearances on TV and other media sharply declined.

For years, the three had appeared regularly on many TV programs. By 2019, they had been dropped by all of them.

That year, the FTC issued an unprecedented warning to Johnny & Associates, citing concerns that the agency’s actions might have put pressure on broadcasters not to hire former SMAP members.

The FTC continued to closely monitor the entertainment industry to protect the rights of performers, which led to the survey.

Several sources familiar with the FTC’s investigation at the time described the situation facing the former SMAP members.

“The three did not leave on good terms with the agency and ended up at odds with it,” an employee at a major broadcaster said. “I quickly thought that they would no longer be cast for appearances.”

At the time, the FTC received reports that “Johnny & Associates had pressured broadcasters and other media not to cast the three independent members.”

The FTC carried out an undercover investigation to verify the claims, which could be considered interference with business transactions, a violation of the Anti-Monopoly Law.

Many TV station officials denied the allegations, saying: “Pressure? There’s no way that happened.”

The FTC also gathered statements that executives at Johnny & Associates had told several TV station executives that “the president is angry.”

The “president” was Johnny Kitagawa, the influential founder of Johnny & Associates.

After Kitagawa died, Julie Keiko Fujishima became president in September 2019.

There was debate over whether the “angry” remark could be considered “pressure.”

After a yearlong investigation, the FTC could not definitely confirm there was pressure from Johnny & Associates.

However, the FTC took into account the testimonies that the phrase “the president is angry” was used multiple times in conversations between executives at Johnny & Associates and broadcasters.

The FTC determined that this could lead to interference with business transaction and issued a warning to the agency.

Johnny & Associates released a statement in July 2019 on its official website, denying the allegations of pressure.

(This article was written by Yosuke Takashima, Hiroshi Nakano and Kyota Tanaka.)