Adidas & Ye Reach Settlement to End Legal Disputes Over Yeezy Split
The deal comes two years after Adidas terminated its lucrative partnership with the rapper over his antisemitic statements and erratic behavior.
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Adidas has reached a settlement with Ye (formerly Kanye West) to resolve all outstanding legal claims stemming from the company’s decision to end its partnership with the rapper and his Yeezy brand.
The deal, announced by CEO Bjorn Gulden during a quarterly earnings call and first reported by Bloomberg, came roughly two years after Adidas announced it would terminate its years-long brand deal with Ye in the wake of his antisemitic statements and other erratic behavior.
“Both parties said we don’t need to fight anymore and withdrew all the claims,” Gulden said on the call, adding that neither side would pay the other as part of the settlement. “No one owes anybody anything anymore. So whatever was is history.”
It’s unclear exactly what legal disputes were ongoing when the deal was reached. The two sides were engaged in private arbitration over the split last year, but the status of that case is unknown. A rep for Ye did not immediately return a request for comment on Adidas’s announcement.
Adidas, which operated a lucrative sneaker collaboration with West for nearly a decade, was one of many companies to terminate its relationship with the rapper in the fall of 2022 after a string of bizarre statements and actions, like unveiling a “White Lives Matter” shirt at Paris Fashion Week and claiming he was going “death con 3 on Jewish people.”
It was a messy breakup for Adidas. The split left the company holding $1.3 billion worth of unsold Yeezys and no easy option to unload them, contributing to a loss of $655 million in sales for the last three months of 2022.
Days after Adidas announced the split with West, court records show that the company demanded Yeezy return $75 million that had allegedly been deposited into its accounts. When Yeezy refused, Adidas secretly filed a case in federal court, seeking an order to immediately freeze those funds. A judge initially granted that motion, but then later unfroze the funds.
In the course of that litigation, both sides revealed that they were also engaged in a private arbitration case over the termination of the partnership. The exact parameters of the dispute were kept secret, but Adidas argued in public court documents that Ye’s “racist, antisemitic, and other offensive public statements and conduct” had caused “considerable damage to its brand” and led to the breakdown of the partnership.
“Adidas has multiple causes of action against Yeezy, resulting from Ye’s highly public and offensive conduct described above, which violated the terms of the agreement and justified adidas’s termination of that contract,” the company argued. “Those broader causes of action, as well as the dispute over [issues], will be resolved through arbitration.”
