: Kanye West is no longer a billionaire after Adidas shelves Yeezy partnership
By October 28, 2022 21 views
Adidas became the latest organization to distance itself from artist Kanye West this week when it ended its partnership with the rapper after he recently made a series of controversial comments.
West has lost his billionaire status in the aftermath of his Adidas
ADS,
ADDYY,
deal ending. He has been a billionaire since 2020, with his Yeezy-Adidas deal accounting for $1.5 billion of his net worth, according to Forbes estimates. Without Adidas, West's net worth is "only" $400 million.
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Following is what you need to know about Adidas's decision to cut ties with West, who now uses the name Ye, and the fallout.
Why did Adidas cancel its deal with Kanye West?
West, or Ye, recently tweeted antisemitic remarks leading to a temporary ban of his Twitter
TWTR
See also: Kanye West escorted out of Skechers office after he showed up unannounced, the company says
A since-deleted tweet read: "I'm a bit sleepy tonight but when I wake up I'm going death con 3 on JEWISH PEOPLE. The funny thing is I actually can't be anti-Semitic because black people are actually Jews also. You guys have toyed with me and tried to blackball anyone whoever opposes your agenda."
Video also surfaced of West appearing to brag that he could "say antisemitic things" without Adidas repercussions. "Now what?" he asks in the interview. "Now what?"
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Adidas issued a statement on Tuesday.
"Adidas does not tolerate antisemitism and any other sort of hate speech," the company said in a statement. "Ye's recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company's values of diversity and inclusion, mutual respect and fairness."
What is Kanye West's net worth?
West's net worth without the Adidas deal is roughly $400 million, by Forbes's calculations, and includes cash, real estate, his music catalog and a stake in Kim Kardashian-West's shape-wear brand Skims.
Will Adidas still sell Yeezy products?
Adidas says it will no longer sell Yeezy-branded products, including the highly sought-after shoes.
"After a thorough review, the company has taken the decision to terminate the partnership with Ye immediately, end production of Yeezy branded products and stop all payments to Ye and his companies. [A]didas will stop the adidas Yeezy business with immediate effect," the company said.
Currently, there are no Yeezy products on Adidas's website, or on its Confirmed App, the platform that releases the company's popular footwear item, such as Yeezy shoes.
On the secondary market, Yeezy shoes, the most popular of all Yeezy products, are still being sold peer-to-peer in large quantities. According to reseller StockX, thousands of Yeezy shoes have been sold in the past three days.
Adidas declined to offer further comment for this story.
How much is Adidas worth?
Adidas is publicly traded and has a market cap of $18.27 billion as of Wednesday morning.
The company said it estimates it will be forgoing roughly €250 million ($251 million) in net income in 2022 because of the West episode and promised a more detailed outlook during its third-quarter earnings call in November.
Analysts had already forecast a quarterly loss for the company, and Wedbush downgraded Adidas to neutral from outperform at Wedbush.
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The ramifications to Adidas of dropping the Yeezy line are not just short term. Yeezy generated an estimated $2 billion in revenue per year for Adidas, according to Morningstar's David Swartz, constituting about 9% of the company's yearly revenue.
In the months before Adidas cut ties with West, the rapper had accused the sportswear brand of stealing his designs and making false promises about opening Yeezy-branded stores.
U.S.-listed shares of German-based Adidas gained about 1.8% on Wednesday.
What other brands have dropped Kanye West?
West has lost business partnerships with several brands amid the firestorm over his comments, including Gap Inc.
GPS,
Balenciaga, the talent agency CAA and the production company MRC, which had been working on a documentary film with West.
Boston Celtics forward Jaylen Brown and Los Angles Rams defensive end Aaron Donald announced on Tuesday that they were leaving West's marketing agency Donda Sports, effective immediately.
"I now recognize that there are times when my voice and my position can't coexist in spaces that don't correspond with my stance or my values. And, for that reason, I am terminating my association with Donda Sports," Brown said.
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West's Instagram
META,
and Twitter
accounts are frozen for violating the platforms' terms and conditions — the accounts are not deleted, but new posts are not allowed.
When did West sign with Adidas?
Adidas and West first collaborated on an apparel line in 2013, and the first Yeezy shoe, the Boost 750, debuted in 2015.
When Adidas signed West, it represented a high-profile poach from rival Nike
NKE,
+3.52%.
The U.S.-based brand had in 2009 made West the first nonathlete with a signature shoe deal with the company. West and Nike released the Air Yeezys, which became one of the most sought-after sneakers of all time — sales of the Red October Air Yeezy 2 routinely go for over $20,000 a pair on the secondary market.
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At the time of West's deal with Adidas, the company labeled him "one of the most influential artists of this generation," adding that "he crosses music and fashion like no other, and together, with our history in fashion and streetwear culture, we will create a new chapter."
"I'm going to be the first hip-hop designer," West said in 2013 during an interview with New York radio station Hot 97. "I'mma be bigger than Walmart."
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