When Adidas terminated its relationship with Kanye West in the wake of his rampant anti-semitism, the company made one thing abundantly clear: they would “end production of Yeezy branded products, and stop all payments to Ye and his companies,” bringing an end to the “Adidas Yeezy business with immediate effect.”
But due to strange wording in the rest of the Adidas announcement, there’s a possibility that Adidas will still be able to change the branding on existing Yeezy designs, and sell them without West’s involvement or trademark. The Adidas partnership with West generated $1.7 billion in 2021: almost 7 percent of the company’s annual revenue.
With the loss of his share in the Adidas deal, which Forbes valued at $1.5 billion, West’s net worth dropped down to $400 million this week.
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“Adidas is the sole owner of all design rights to existing products as well as previous and new colorways under the partnership,” the Adidas statement announcing its break with West continues.
“Adidas has the rights to existing Yeezy product designs and can sell these using Adidas branding (not Yeezy branding) following the termination of the Yeezy partnership, which Adidas intends to do...it believes it can limit the loss of revenues through this strategy,” Royal Bank of Canada analyst Piral Dadhania told Fortune.
How did it come to be the case that West didn’t retain Yeezy design rights? West told Forbes in 2019, “West still owns 100% of Yeezy,” but the now-terminated agreement between Adidas and Yeezy, which was previously set to expire in 2026, granted West creative control over the designs, which doesn’t necessarily translate to ownership of the designs; Adidas AG was in charge of distribution and production of the shoes.
That agreement was brokered with the help of West’s ex-manager Scooter Braun, who set up the rapper in a contract with Adidas which granted him “a 15 percent royalty on wholesale, according to sources familiar with the deal, plus a marketing fee,” according to Forbes.
As West’s greatest adversary in pop, Taylor Swift, could have told him if he’d asked: be careful getting into any deal Scooter Braun is involved in.
According to Fortune, Mascotte Holdings Inc., West’s company, reportedly has a roster of 160 trademark applications and registrations related to the Yeezy brand, but Adidas owns the design rights to most Yeezy shoes.
Now that the contract between West and Adidas has been ripped up, Yeezy fanatics are gearing up to profit off of and horde the remaining Yeezy designs that still bear the Yeezy branding: according to sneaker-trading online platform Tradeblock, there has been a 2.5% increase in Yeezy trade activity over the past 24 hours and about a 10% increase in users adding Yeezys to their wishlist.
According to Tradeblock, the Yeezy Foam Runner ‘Onyx’ shoe went from #33 to #7 on the platform’s ranking of most-traded shoes after the news of the Adidas termination was released.
How West plans to move forward with his juggernaut shoe brand is a mystery, but he can rule out partnering with Skechers, whose headquarters he attempted to bum rush on Wednesday.
“Kanye West—also referred to as Ye—arrived unannounced and without invitation at one of Skechers’ corporate offices in Los Angeles,” a Skechers spokesperson told The Daily Beast in a statement. “Considering Ye was engaged in unauthorized filming, two Skechers executives escorted him and his party from the building after a brief conversation. Skechers is not considering and has no intention of working with West. We condemn his recent divisive remarks and do not tolerate antisemitism or any other form of hate speech. The Company would like to again stress that West showed up unannounced and uninvited to Skechers corporate offices.”
