Adidas ends partnership with Ye over anti-Semitic comments

NEW YORK (AP) — Adidas has ended a partnership that helped make the artist formerly known as Kanye West a billionaire and gave German sportswear a bold appeal, but ultimately didn’t was able to survive a growing outcry over the rapper’s offensive and anti-Semitic remarks.

The split will leave Adidas looking for another transcendent celebrity to help it compete with ever-bigger rival Nike, but will likely prove even more costly for Ye, as the rapper is now known. The sneaker giant has become the latest company to cut ties with Ye, whose music career is on the decline as he courts controversy.

Adidas said it expects to hit up to 250 million euros ($246 million) in net profit this year following the decision to immediately halt production of its Yeezy product line and stop payments to Ye and his companies. Its shares closed more than 2% on Tuesday.

“Adidas does not tolerate anti-Semitism and any other type of hate speech,” the company said in a statement Tuesday. “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.”

For weeks, Ye has made anti-Semitic comments in interviews and on social media, including a post on Twitter earlier this month that he was soon to perform “Death Con 3 on JEWISH PEOPLE,” an apparent reference to the scale of American defense readiness conditions known as DEFCON. He was suspended from Twitter and Instagram.

Ye expressed regret in an interview with podcaster Lex Fridman posted online Monday, in which he called his initial tweet a mistake and apologized to “the Jewish community.” An email message sent to a Ye representative was not immediately returned.

Adidas stuck with Ye through further controversies over his remarks on slavery and COVID-19 vaccines. But Ye’s anti-Semitic comments have reignited the company’s past ties to the Nazi regime that the company had worked to leave behind. The World Jewish Congress noted that during World War II, Adidas factories “produced supplies and weapons for the Nazi regime, using slave labor.”

Jewish groups said the decision to abandon Ye was overdue.

“I would have liked a clear position earlier from a German company that was also involved in the Nazi regime,” said Josef Schuster, president of the Central Council of Jews in Germany, the main Jewish group in the country where Adidas at his seat.

Adidas, whose CEO Kasper Rorsted will step down next year, said it made its decision after conducting a “thorough review” of its partnership with Ye, whose talent agency, CAA, as well as fashion house Balenciaga had already abandoned the rapper. In the hours leading up to the announcement, some Adidas employees in the United States had denounced the company’s inaction on social media.

Despite the growing controversy, Allen Adamson, co-founder of marketing consultancy Metaforce, believes Adidas’ late response was “understandable”.

“The positives are so big in terms of the audience it’s aimed at — younger, urban, trend setters, company size,” Adamson said. “I’m sure they were hoping against hope that he would apologize and try to make this right.”

Adidas won’t release Yeezy sales figures, but the impact will be more severe than expected given the brand has ended production of all Yeezy products and ceased royalty payments, Morningstar analyst says David Swartz in a note published Tuesday.

Swartz predicts that Adidas’ overall revenue will reach 23.2 billion euros ($23.1 billion) this year, with the Yeezy brand generating 1.5-2 billion euros ($1.99 billion), i.e. nearly 10% of the total. The expensive brand accounts for up to 15% of the company’s net income, Swartz said.

Forbes estimated that Adidas accounted for $1.5 billion of Ye’s net worth and without the deal it will drop to $400 million, including his music catalog, real estate, cash and a stake. in ex-wife Kim Kardashian’s shapewear company, Skims. Forbes said it will no longer include Ye on its list of billionaires, although the rapper has long insisted the magazine underestimates his wealth.

Ye has alienated even the most ardent fans in recent years. People close to him, like Kardashian and her family, stopped publicly defending him after the couple’s bitter divorce and disturbing posts about her recent relationship with comedian Pete Davidson.

Carl Lamarre, deputy director of R&B/Hip Hop at Billboard, said many Ye fans were disappointed with him, but the implosion of his business endeavors was hard to watch for those who admired the rapper’s ability to achieve success. new heights of success beyond hip-hop. .

“He’s someone who potentially set the blueprint for a lot of musicians to come,” Lamarre said. “When you see someone reach their superstar level and transcend business, fashion and hit that billionaire point, for our community, for hip-hop, for African Americans, that’s very ambitious.

“But the same kids, even me who used to be superfans, you try to defend him but every day he gives you a reason you can’t,” Lamarre added.

The rapper, who has won 24 Grammy Awards, is steadily losing radio listenership and even his streaming numbers have dipped slightly over the past month. According to data provided by Luminate, an entertainment data and insights company whose data powers Billboard’s music charts, its streaming audience fell from 8 million in the week ending September 22 to 5, 4 million in the week ending October 20. the popularity of its on-demand streaming songs also declined over the same period, from 97 million to 88.2 million, a decline of around 9%.

Ye has earned a reputation for stirring up controversy since 2016, when he was hospitalized in Los Angeles due to what his team called stress and exhaustion. It was later revealed that he had been diagnosed with bipolar disorder.

He suggested slavery was a choice and called the COVID-19 vaccine a “mark of the beast”, among other comments. He also came under fire earlier this month during Paris Fashion Week for wearing a ‘White Lives Matter’ t-shirt to the show and wearing models in the same design. After being suspended from Twitter and Facebook, Ye offered to buy Parler, a conservative social network without a gatekeeper.

The fashion, music and apparel world continued to distance themselves from Ye on Tuesday.

Foot Locker said it was cutting ties with the Yeezy brand and removing Yeezy shoes from its shelves and online sites. Gap said it would remove Yeezy Gap product from its stores by shutting down yeezygap.com. Universal Music Group, owner of record label Def Jam, said in a statement on Tuesday that Ye’s music and merchandise contracts ended last year. The MRC studio announced on Monday that it was putting a full documentary on the rapper on hold.

A Vogue spokesperson confirmed on Tuesday that the magazine and its global editorial director, Anna Wintour, have no plans to work with Ye again after his latest controversial remarks and behavior.

Jewish groups have highlighted the danger of the rapper’s comments at a time of rising anti-Semitism. Jonathan Greenblatt, CEO of the Anti-Defamation League, which on Tuesday applauded Adidas’ decision to drop Ye, said his organization had documented a threefold increase in harassment, vandalism or violence targeting Jews since 2015.

“We operate today in an environment where anti-Semitism is empirically on the rise,” Greenblatt said. “When people with big platforms allow anti-Semitism and other forms of bigotry, it creates an environment in which these types of activities are given a degree of permission that they might not have had before. .”

Lamarre said he understands Ye is struggling with mental health and personal issues, but that only makes it more important to pause and reconsider giving him a platform for his offensive comments.

“We’re watching someone who was a beloved superhero in the African-American community spin before our eyes,” he said. “But he’s someone who kind of falls on his own sword.”

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Associated Press writers Kristin M. Hall in Nashville, Leanne Italy in New York, Ryan Pearson and Anthony McCartney in Los Angeles, and Peter Smith in Pittsburgh contributed to this report.

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