Zhao Lusi Quitting Showbiz? Why Stars & Agencies Often End Badly?

Zhao Lusi cried during a livestream. Since publicly confronting her agency, Galaxy Cool Entertainment, on Weibo on August 2nd, she has started livestreaming daily on Xiaohongshu.

These sessions included emotional outbursts and revelations about her family and herself. These included, but were not limited to: denying plastic surgery, revealing she was scammed in a dessert shop venture leading to a lawsuit, her father's cancer diagnosis, and her grandfather's passing.

Of course, much was also about work. She revealed she faces huge compensation claims from film crews and brands. She also disclosed that a film crew, driven by superstition, hired a "master" to perform an "exorcism" on her, and recalled earning only 2500 yuan in her first month in the industry.

Artists clashing with their agencies is nothing new. But a top-tier artist halting work due to emotional health issues, triggering a chain reaction that escalates into a public "confrontation" on online platforms, with the artist revealing details via livestream–this is indeed a new way contract disputes are playing out in this era.

In the Weibo posts, while Zhao Lusi and Galaxy Cool Entertainment didn't disclose full contract details, the main points of conflict are clear:

Zhao Lusi and Galaxy Cool Entertainment had renewed their contract. There are still four years left on the current contract, but Zhao Lusi no longer wants to continue the partnership.

Due to emotional health issues, the filming of "Lover" was halted and the crew disbanded. Zhao Lusi claims the agency withdrew 2.05 million yuan from her personal studio account to cover compensation costs for this unexpected illness-related halt without discussing it with her first.

Simply put, there are both immediate financial disputes and a longer-term desire to terminate the contract.

Why do artists and agencies, who once worked together and grew side-by-side, often end badly? What impact does going public with contract disputes have on Zhao Lusi? What advice do lawyers give?

Star agents and lawyers specializing in entertainment law offered professional explanations and insights.

The Basics: How Stars and Agencies Sign & Terminate Contracts?

Zhao Lusi started working with Galaxy Cool Entertainment at 17. Yet at 27, their relationship has reached an irreconcilable point. The fundamental reason is a shift in the balance of power: the artist has matured from a newcomer into a top star, altering the dynamic with the agency. Both sides have their own positions and difficulties.

From Zhao Lusi's perspective, at 27, as a top artist with greater capabilities, she feels the agency can no longer support her growth (either objectively or in her view). Instead, it takes a share of her hard-earned income. From Galaxy Cool Entertainment's perspective, Zhao Lusi was just a rookie at 17. The agency invested resources, helping her rise step by step. Now, at the stage to reap the rewards, and with the contract still active, it's reasonable the agency doesn't want to let her go.

This inherent conflict between artists and agencies, where influence ebbs and flows, has always existed. Learning from past cases, the industry has developed tacit understandings in contracts to help both sides protect their interests.

On Weibo, Zhao Lusi questioned her agency: "The contract signed at seventeen covers Mainland China/Hong Kong/Macau/Taiwan/the whole world... why isn't the universe yours, Xu Zhe?"

Xiao Ying (a pseudonym), a senior agent at a leading agency who has participated in signing management contracts for both newcomers and established artists, stated that Zhao Lusi's complaint about a worldwide contract is not unusual. "Go to any major agency; as long as it's a full contract artist, they sign globally. This is standard for newcomers too."

Xiao Ying explains that newcomers and established artists have completely different levels of leverage when signing with agencies.

"Newcomers typically sign long-term contracts of 8 or even 10 years. The reason is that for the first 2 to 4 years, the agency is investing heavily in building the artist's career. The company is constantly spending resources. It doesn't make sense to sign a short contract of only 3 or 4 years–it might be too short to successfully promote the artist, and if the artist suddenly becomes popular and leaves, it's a loss for the agency. Regarding the profit split, the ratio between a newcomer and the agency might be 70/30 (agency/artist) or even 90/10 (agency/artist)."

At the newcomer stage, the contract primarily provides security for the agency. However, once an artist becomes famous, they gain significant negotiating power.

"Established artists signing with an agency might sign contracts year by year, giving them much more freedom regarding renewal. Especially for top-tier artists signing with an agency, the agency actually receives very little money, basically just enough to cover operational costs, without making much profit."

Contracts for mature artists come in many forms. For example, an actor who already has no shortage of acting roles might sign with an agency with a 90/10 split (artist/agency) on acting fees. But if they lack commercial endorsements, the agency would take a higher percentage for securing those deals.

Furthermore, once an artist becomes famous, the profit split ratio can be renegotiated and adjusted with the agency at any time. Xiao Ying shared an example: "I handled an artist who started with a 70/30 split (agency/artist) as a newcomer. After gaining some fame while still under contract for several years, he negotiated a higher percentage with the boss, who agreed. I know he also explored offers from other agencies–he might have left if he found better terms elsewhere–but in the end, he stayed."

"So I don't understand why Zhao Lusi reached this point with her agency," Xiao Ying commented. "She renewed her contract. As a top-tier artist, she would have had immense leverage during renewal negotiations. Frankly, the agency definitely wants to keep a top star; they have very little leverage over you. Both sides must have agreed on the terms at the time."

Where there are signings, there are also terminations. Many artists and agencies ultimately reach the point of contract termination. How termination works is also a crucial part of any management contract.

Xiao Ying explains that termination clauses also vary significantly by individual. Penalties might be a fixed sum, ten times the artist's income from the previous year, or simply state that the amount will be negotiated.

"In most artist terminations I've experienced, they were settled peacefully through friendly negotiation. Even if the contract period wasn't up, the artist and the boss would talk, both sides would feel it wasn't working out, agree it wasn't worth forcing, and terminate the contract early."

Is Terminating the Contract a Good Choice for Zhao Lusi?

There are precedents for amicable splits in the Chinese entertainment industry, where both artist and agency maintain a dignified public facade. This time, however, Zhao Lusi directly acknowledged accusations of being "rotten at the core" and "undignified", choosing to publicly confront her agency.

The full details remain unknown to us. Perhaps there was a lack of communication, perhaps the conflicts were truly irreconcilable, or perhaps Zhao Lusi, dealing with emotional health issues, needed outlets like livestreams to vent her frustrations.

Through this incident, we can explore the shared motivations behind established artists seeking termination: Why do they want to leave? What good options remain after they terminate?

Top Artists' Crossroads: Sign or Personal Studio

After speaking with numerous professionals working on the artist side, Yulee Studio found a consistent answer: many established artists want to terminate contracts with their agencies. On one hand, they no longer see the value provided by their current company and team, feeling the agency can't keep pace with their growth. On the other hand, they don't want to share a significant portion of their earnings with the agency anymore, preferring the money they earn to go directly into their own pockets. Therefore, top artists often go independent and set up their own studios.

Looking at the current landscape of the Chinese entertainment industry, some top artists run their own studios, while others choose to sign with a major agency and maintain a personal studio. Which model is better?

From the perspective of Xiao Gao, a senior professional who has managed several top artists, the difference in professionalism isn't significant if you look at the core. "Ultimately, it comes down to hiring people. There are too few truly outstanding talents in the industry. So whether an artist goes independent or signs with an agency, the practical outcome is often similar."

Xiao Ying believes that from the standpoint of protecting the artist's interests, the difference is also minimal. "If a well-known artist is willing to sign with a major company, it's often just for the company to provide the staffing. The revenue from the personal studio would still be controlled by the artist themselves, as the boss."

Many top artists choose to establish personal studios primarily for a sense of psychological security. "Key positions in these studios are often filled by trusted insiders–parents, relatives, or friends. While their professional level might not be high, the artist seeks peace of mind. They feel like they have control over everything. If they sign with an agency, artists might worry the agency will prioritize promoting other artists over them, or share their resources and benefits with others," Xiao Ying explained.

Especially since top artists are often seen as the agency's "cash cow", even expected to help promote newcomers, it's perfectly understandable why established artists want independence.

Burning Bridges with the Agency Carries Huge Risks

Wanting to terminate the contract is understandable. But from a professional artist management standpoint, is publicly airing the conflict and escalating the situation a good choice?

The two senior professionals, Xiao Gao and Xiao Ying, offered different perspectives.

Xiao Gao believes that some details Zhao Lusi revealed in her livestreams and on Weibo might garner public sympathy. Looking at online comments, some neutral observers do support her.

Xiao Ying, however, feels this approach is far too risky. "She mentioned the agency telling her not to post, hinting she might be 'blacklisted' or something. There was absolutely no need to say things like that publicly."

Currently, Zhao Lusi seems to be adopting a "mutually assured destruction" stance against her agency, even suggesting she might quit the industry altogether and open a noodle shop. She also mentioned, however, that she is currently in a good state and ready to work.

So, from the industry's perspective, is actress Zhao Lusi still a viable choice?

Two professionals from a top TV production company told Yulee Studio that hiring her in the current situation is unthinkable. "The risk is simply too high. She stopped filming a previous project midway but then attended a music festival. If we hired her, we'd constantly worry she might not be able to finish again. That would be devastating for the production. Plus, she talks about so many things in her livestreams–it's all potential liabilities for us."

Several industry professionals emphasized that, for Zhao Lusi's own sake, they hope she will pursue legal channels to resolve her predicament. The public lacks the full context to judge who is right or wrong. Escalating the conflict publicly only increases the risks for the artist herself.

Lawyers Address the Core Issues

Regarding pursuing legal action, Zhao Lusi has publicly expressed concern that litigation would be a very lengthy process, worrying she might be worn down by it.

However, contract issues ultimately need to be resolved through legal channels. Regarding some core problems Zhao Lusi raised on online platforms, Yulee Studio consulted lawyers Mi Xinlei, a partner at Beijing Jincheng Tongda & Neal Law Firm, and Dong Yuanyuan, a senior partner at Beijing Tianchi Juntai Law Firm, for professional advice.

Liability for Compensation

Q1: Zhao Lusi stated that her illness was an unforeseen event beyond her control. For the resulting production shutdown of the drama crew, should Zhao Lusi and her company bear full responsibility? Does the production crew bear any responsibility? How is liability generally determined?

Mi Xinlei: This is generally stipulated in the Actor Employment Contract signed between the production crew (the producer) and Zhao Lusi's agency (Galaxy Cool Entertainment). Such contracts typically include clauses like "If due to reasons attributable to the agency and/or the artist, the filming of the TV drama is halted, the agency and artist shall bear full responsibility, return all (or part) of the remuneration, and pay liquidated damages." In this scenario, the agency and artist could potentially be held liable. Even though the artist's illness was unforeseen by anyone, it objectively caused the filming suspension, resulting in actual losses.

Dong Yuanyuan: If an actor falls ill, it depends on what the "Actor Employment Contract" with the producer stipulates. Sometimes, when an agency signs the agreement on behalf of the actor, it may include clauses like "If the artist is unable to commence or continue filming due to unavoidable reasons such as illness or flight delays, the Producer agrees that such circumstances shall not be deemed a breach of contract by the Artist." However, if the Actor Employment Contract lacks such exemption clauses, then the responsibility allocation between the agency and the artist needs to be examined based on the terms of the "Artist Management Contract."

Q2: Zhao Lusi asked her agency, "Didn't you need to discuss it before transferring money from my studio account? Then trick my finance into signing the settlement statement? The 2.05 million is already gone." Can she get this money back?

Mi Xinlei: The current information is insufficient to determine if the agency breached the contract. Zhao Lusi's August 2nd Weibo post included a screenshot of a WeChat conversation. Based on the context of that screenshot, Galaxy Cool Entertainment's current stance seems to be that since the production crew is demanding compensation, the agency and the artist should share the compensation amount proportionally, rather than the agency bearing it alone. Hence, funds were transferred from Zhao Lusi's account to cover the compensation. If this factual premise holds, whether Zhao Lusi can recover the money depends on how the management contract stipulates the allocation of liability for external breaches between the artist and the agency. If the contract is silent on this, sharing the liability based on their profit split ratio could be an approach a court might adopt.

Dong Yuanyuan: This depends on whether there is a legal basis. If there is, yes; if not, no.

Is Depression an Occupational Injury?

Q3: Some netizens are discussing whether depression could be considered an occupational injury. So, does depression count as an occupational injury? Can Zhao Lusi use this reason to claim compensation from the company?

Mi Xinlei: Generally, "occupational injury" refers to accidents or occupational diseases suffered by employees while working for an enterprise, as defined in the "Regulations on Work-Related Injury Insurance." Under this system, if it qualifies as an occupational injury, social insurance benefits are payable. However, this current matter is clearly not significantly related to occupational injury. The relationship between Zhao Lusi and Galaxy Cool Entertainment is not an employment (labor contract) relationship; it's not an employer-employee relationship. They have a management contract relationship. Zhao Lusi cannot claim compensation from the company on the grounds of "occupational injury." Unless their management contract explicitly stipulates that the agency is liable if its actions cause her illness or injury, she might be able to demand compensation based on that. But even with such a clause, proving that the company's actions directly caused her illness would be extremely difficult. Personally, I think it's rather unlikely.

Dong Yuanyuan: Generally, "occupational injury" applies within an employment relationship where an injury occurs due to work. Under an artist management relationship, liability is usually determined according to civil tort law, requiring the infringing party to bear compensation liability.

Recommended Best Path Forward

Q6: Have you handled artist termination cases before? What do you recommend as the best resolution path for Zhao Lusi?

Mi Xinlei: I've handled far too many termination cases, many involving top artists. But due to confidentiality obligations and other reasons, I cannot disclose or elaborate on them. The causes of conflict between artists and agencies are varied: uneven profit distribution, broken trust, the agency's professional inability to match the artist's growth, the artist wanting to go solo after becoming famous, etc. The situation between Zhao Lusi and Galaxy Cool Entertainment is relatively unique, primarily triggered by a chain reaction following the artist's illness. The agency's handling after the illness clearly further inflamed the conflict. Without this incident, things might not have reached this point. But this might also reflect the nature of many relationships: easy to share good times, hard to weather bad ones.

I don't have much specific advice. For Zhao Lusi, if she believes the trust with her agency is irreparably broken, then even if she's recovered and able to work, continuing the contract seems improbable. In that case, she will likely sue for termination. The outcome ultimately rests with the court. One thing worth emphasizing, though, applies not just to artists but everyone: actively prioritize your mental health. Seek intervention and treatment early if issues arise to prevent reaching an irreversible stage. This is especially crucial for agencies.

Dong Yuanyuan: I have represented many artist termination cases. The main 1sticking point is often that the agency doesn't want to terminate, while the artist feels stifled. The most critical issue is usually the extremely high termination penalty, sometimes tens of millions, which the artist often simply cannot afford. The court might not award the full amount demanded, but it won't be low either, and the process will be long. In termination cases, the artist is actually very vulnerable. Even if they speak out through public opinion, the law primarily looks at the contract between the parties. Sometimes, agencies might feel they've earned enough and choose to release the artist from their contract; both sides need to see the bigger picture. Often, it's only after negotiations fail that they turn to the media as a channel to voice their side, as a last resort.