With the recent introduction of a new anti-corruption law, countless questions loom as to the extent of its impact on Korean society as well as certain industries.

The “Kim Young-ran law” restricts public officials, private school faculty and journalists from receiving certain amounts of gifts or paid-for entertainment, with the definition of “gifts” including gift certificates and accommodation vouchers as well as complimentary tickets for performances. 

However, journalists and industry officials are not the only parties expected to feel the brunt of the new law. Many industry insiders fear it will mean fewer opportunities for the public to enjoy performances by major international artists.

Entertainment companies rely heavily on corporate sponsorships to hold big-name concert events, especially when it comes to raising funds to invite famous overseas artists to perform in Korea.

“Corporate sponsorships account for a huge bulk of our ticket sales,” said one local concert promoter, declining to be named. “One of the ways we entice large corporate conglomerates is to offer the company free tickets to attend whatever performances they are sponsoring. The company then often takes those tickets and offers them up to their VIP customers as a means of maintaining good business relations.”

“However, because of the new law, we have already experienced a number of our sponsors either lower the amount of their support or even completely withdraw their sponsorship because now with the law preventing gifting tickets, these companies see little incentive to offer sponsorship.”

As the number of sponsorships are seeing a decline, the number of high-quality, extravagant cultural performances is expected to decline as well.

In less than two weeks since the law came into effect, many journalists and entertainment industry officials can already attest to changes from what was previously considered the “norm.”

While it is common practice for journalists in many Western countries to receive complimentary press tickets for review purposes because press attendance is viewed as part of the job, under the new anti-graft law, press tickets are constituted as “gifts.”

Many entertainment companies rely on the media to promote their various shows or concerts to the general public. However, they are now no longer permitted to invite members of the press to any show where ticket prices exceed the 50,000 won ($45) gift cap, as the tickets are regarded as gifts.

Looking to combat this obstacle, a number of entertainment companies have attempted to hold free press screenings of certain performances. However, since last week, a number of scheduled press calls have been abruptly canceled.

“Right now, things have become sort of a ‘waiting game’ in the entertainment industry,” said a spokesperson at one of Seoul’s major musical and theater production agencies, asking not to be named. “There’s still this lingering fear of where exactly to draw the line with this new law, and what is or is not permitted. Since the anti-graft law is brand new and many companies don’t yet have any guidelines or procedures as to how to approach this.”

“I know that some companies are choosing just to wait and see how other companies are dealing with this new law,” the spokesperson continued. “We have even started consulting a lawyer to help us figure out how to stay within the bounds of the law.”

While some may see the new law as a burden or obstacle, its proponents vouch for it as a means to minimize abuse of power.

Proponents of the anti-graft law have pointed to the “entertainment expense” fund as an alternative.

The fund is a fiscal practice the government enacted in recent years in an effort to encourage companies to use a portion of their budget on cultural events to support the local arts industry and abolish “unhealthy” ways of soliciting business.

As an incentive, companies are given a 20 percent tax exemption on expenses in which at least 3 percent of the funds are spent on anything related to culture or arts, such as concert tickets, exhibitions and sporting events. The system, however, is still subject to the anti-graft law in that funds must not exceed the 50,000 won cap -- once again limiting performance options as ticket prices for most major, big-name concerts exceed 100,000 won.

Some industry insiders say they are skeptical whether media companies would spend money out of their own budget to dispatch reporters to many concert performances. Some have also suggested the new law would have a larger impact on smaller, independent productions that are already struggling to capture media and public attention.

By Julie Jackson (juliejackson@heraldcorp.com)