The latest drama in the tumultuous breakup between Ye and Adidas has resulted in a class action lawsuit filed by investors who claim the company’s partnership with the artist caused them significant financial losses.
This comes after Ye made a series of anti-Semitic and racially offensive statements, leading to public calls for a boycott of Adidas for not ending their partnership with the controversial musician.
Adidas and Ye’s collaboration began in 2013 after the musician’s relationship with Nike ended. The partnership deepened in 2016, resulting in the creation of the Yeezy brand, which encompassed footwear, apparel, and accessories for all genders.
By 2019, Yeezy shoe sales had surpassed $1 billion, and the Adidas Yeezy sneaker line was poised to compete with Nike’s Jordan brand.
However, in the fall of 2022, Ye’s inflammatory behavior took a dark turn.
He began making overtly anti-Semitic and racially offensive remarks, starting with wearing a “White Lives Matter” shirt to a Paris fashion show. The Anti-Defamation League has described the slogan as a “white supremacist phrase.”
The situation escalated when Ye posted a screenshot of a private argument with hip-hop star Sean Combs, also known as Puff Daddy, on October 7, 2022. In the heated exchange, Ye targeted Jewish people, stating, “Ima use you as an example to show the Jewish people that told you to call me that no one can threaten or influence me.”
Ye continued his anti-Semitic tirade on Twitter on October 9, 2022, stating, “I’m going death con 3 on JEWISH PEOPLE.” He added, “You guys have toyed with me and tried to blackball anyone whoever opposes your agenda.” The tweet has since been removed.
In an interview with Tucker Carlson, Ye made more anti-Semitic remarks that were omitted from the aired version. He stated, “I prefer my kids knew Hanukkah than Kwanzaa. At least it will come with some financial engineering.”
Despite his incendiary comments, Ye believed Adidas would not end their partnership.
On October 21, 2022, he publicly stated, “I can literally say anti-Semitic [expletive], and they cannot drop me. I can say anti-Semitic things, and Adidas can’t drop me. Now what? Now what?”
Adidas eventually terminated the partnership with Ye, but the company now faces a financial crisis.
In February 2023, Adidas warned that it could shift from a profit to a loss if it failed to sell its inventory of Yeezy shoes. The company estimated that sales would fall at a high due to the “significant adverse impact of not selling the existing stock” of Yeezy products.
Failure to sell the stock of Yeezys, valued at $1.29 billion, would significantly lower the company’s revenue.
The class action lawsuit alleges that senior officers and directors of Adidas knew well before they cut ties that Ye’s erratic behavior could potentially cost the company significant revenues – but they kept the information and the risk he posed to investors and members of the investing public.
The lawsuit claims that the market price of Adidas stock was artificially inflated due to hiding Ye’s increasingly racist behavior until all hell broke loose and they had to get rid of him.
