Yeezy without the Ye? Who is the new « sole » owner

New York
CNN Business

« When it starts to get crazy, then run away, » sang Kanye West. Adidas followed his advice.

Where to start? After a social media outcry, Adidas has severed ties with Ye, with the artist officially known as Kanye West (and formerly known as a billionaire) joining the long list of brands that parted ways with the star after his tour anti-Semitic media.

In its statement, Adidas said it would “end production of Yeezy-branded products and stop all payments to Ye and its companies. Adidas will discontinue the Adidas Yeezy business with immediate effect.

But scroll down, look at the last paragraph of the company’s announcement, and you’ll find an intriguing phrase that’s raising eyebrows in the industry (and seems to come straight from Adidas’ legal team).

« Adidas is the sole owner of all design rights to existing products as well as previous and new colorways under the partnership. »

Note this part: « Sole owner of all design rights… »

The Yeezy/Adidas contract is not publicly available, but I have spoken to several legal experts about the importance of this line and what Adidas can and cannot do in the future.

« The industry norm is that Adidas would be the owner, even though Kanye is the trademark owner of his brand, » Shahrina Ankhi-Krol, a fashion attorney in New York, told me. with the caveat that she hadn’t read the Adidas/Ye contract.

Even so, the wording raises more questions than it answers. While Adidas’ statement definitely closes the door on the sale of Yeezy-branded products, according to legal experts I spoke with, it opens the door for them to rebrand existing Yeezy designs without Ye.

Simply put, « Yeezy » could belong to Ye. But Yeezy shoe designs are intellectual property of Adidas.

« They won’t be able to use his individual marks, but the designs themselves which they can reuse because they own them, » said Nicole Haff, litigation and entertainment partner at Romano Law. Haff directed me to this article which dives into Adidas’ patent filings and shows that the company claims ownership of all Yeezy/Adidas designs with one exception: Yeezy Slides. They’re all Kanye.

Haff told me that the phrase « sole proprietor » in Adidas’ statement is a legal « warning shot » for Ye. “He said a lot of things to the press, like that his designs were stolen from him and money is owed to him,” she said. « What I think is happening is that Adidas has introduced its [legal] position. »

This legal position could depend on the moral clause of the Yeezy/Adidas contract, which could give Adidas legal cover to terminate their agreement. « It’s inconceivable that there isn’t a moral clause, » Haff said. Kanye’s behavior « absolutely causes reputational damage and damage to the Adidas brand. »

For a deep dive into the legal issues surrounding the Yeezy/Adidas split, The Fashion Law has a great write-up.

Could Ye now start his own fashion brand Yeezy? According to Teri Agins, the author of “Hijacking the Runway: How Celebrity are Stealing the Spotlight from Fashion Designers,” that could be a gargantuan task.

According to Agins, sneaker designs — unlike apparel — are more closely tied to technology and patents, which shoe giants hold tight. « All the properties that make a shoe special, it’s all trademarked, » Agins said. « He doesn’t have the infrastructure…you can’t do this alone. »

Let’s take a step back: West publicly ended his two-year partnership with Gap in September. Today, the company announced that it will immediately stop selling Yeezy-branded products in its own stores and shut down The site now redirects to the main Gap website.

Unplugging existing Yeezy merchandise was a no-brainer for the company. It was already a zombie brand with its star designer publicly quitting and bashing the brand.

Unlike Gap, Adidas had built a very profitable business selling Yeezy-branded merchandise. Adidas’ Yeezy sneakers were among the most coveted and influential shoes, often selling for thousands of dollars on the resale market. If you haven’t followed fashion trends over the past decade, you might not be aware of the vast influence Kanye’s Yeezy brand has had.

« There’s probably no more fashion influencer in the last decade than Ye, » Lawrence Schlossman, co-host of the Throwing Fits menswear podcast, told me, « which just makes its latest nuclear fall even more disappointing.”

Along with the influence came profits, enough to propel West onto the Forbes billionaire list (from which he has now fallen) and boost Adidas’ bottom line. Last month, Cowen analyst John Kernan estimated that the Yeezy brand accounted for 4-8% of Adidas’ overall revenue. (The company has a market capitalization of approximately 19.3 billion euros.)

Cowen had downgraded the stock based on the likelihood of the Yeezy partnership dissolving.

Cowen’s analysis was on point: Adidas stock is down more than 18% since the start of the month. « When it starts to get crazy, then run away…run away as fast as you can, » says a line from his 2010 hit song « Runaway. » But who is running from whom?


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CNN’s Paul La Monica gives some context to these numbers, writing that « Index provider S&P Global has a vested interest in promoting passive funds backed by various benchmarks. »

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