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Adidas just yanked its deal with Kanye West. Here's how much of a hit his net worth might take.

Oct 26, 2022, 02:13 IST
Business Insider
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  • In 6 years, Kanye West went from allegedly being $53M in debt to being a billionaire on Forbes' list.
  • Now that Adidas yanked its deal, experts expect West's fortune to take a hit of hundreds of millions of dollars.
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In just six years, Kanye West went from allegedly being $53 million in debt to being on Forbes' billionaire's list — largely helped by a clothing deal with Adidas.

Now that the deal is terminated, experts estimate West's net worth will take a massive hit.

On Tuesday, Adidas announced it was yanking its partnership with West, who now legally goes by the name Ye, following recent antisemitic remarks by the rapper-turned-designer.

"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," the company said in a statement.

Adidas said terminating the deal would cost the company about $250 million in 2022.

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However, when estimating the exact financial hit to West's bottom line, the numbers get a bit murkier, because Adidas had never publicly shared the specific details of its deal with West.

"There's very little to go on because we don't know the sales, and we don't know the royalty percentage," David Swartz, an analyst who covers Adidas for Morningstar, told Insider.

Swartz said he estimates that Adidas' Yeezy partnership brought in between $1.5 billion to $2 billion per year and that West's design company, Yeezy, might get paid a 10% royalty fee, meaning it could rake in between $150 million to $200 million per year.

However, Swartz said that entire amount wasn't going solely to Ye.

"He actually does have designers that work for him, so he does have some expenses. The royalties would be shared," Swartz said.

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Forbes estimates that ending the partnership with Adidas whacks West's fortune down to $400 million from $1.5 billion.

The rest of Ye's net worth lies in real estate, cash, his music, and a 5% stake in his ex-wife Kim Kardashian's clothing and shapewear line, Skims, according to Forbes.

Last month, West teased that he planned to eventually "go it alone" and operate his Yeezy brand separate from his partnership with Adidas. Still, Swartz said restarting the shoe brand will be challenging for West as Adidas legally owns Yeezy's designs.

"I don't think he can put out replicas of those shoes without getting sued," Swartz said.

"His obstacles of actually launching his own company are enormous... He would essentially be starting from scratch," he added.

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