Kanye West entitled to reduced fee if Adidas rebrands Yeezys

According to a clause in the terminated contract between clothing brand Adidas and rapper Kanye West, the musician is entitled to a reduced fee if the company decides to release the Yeezy designs without the Yeezy name, TMZ reports.

Last month Adidas cut ties with the rapper and fashion designer (who now goes by the name Ye) after comments that were deemed anti-Semitic.

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At the time, the German sports brand said the Jesus Walks hitmaker’s comments had been “unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fairness”.

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CONTRACT STATES KANYE WEST IS ENTITLED TO SOME MONEY FROM ADIDAS

On Wednesday, 9 November, the German sportswear giant announced that it would continue to sell the lucrative sneaker and apparel line, but without the Yeezy name and branding.

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“Adidas is the sole owner of all design rights registered to existing products. We intend to make use of these rights as early as 2023,” said CFO of Adidas, Harm Ohlmeyer.

However, sources have revealed to TMZ that a clause in the contract between Kanye West and the clothing company says that he should get a certain percentage of the sales should Adidas release the sneakers and apparel line without the Yeezy name.

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Speaking to the publication about the clause, Adidas said that Ye would not be getting a cent from the new sales. The publication added that the Donda rapper may have to take the sportswear giant to court if he wants what is his, as per the contract.

WHO MUCH WILL ADIDAS SAVE WITH ITS NEW APPAREL AND SNEAKERS?

When Adidas severed ties with Kanye West last month, it said it would take a “short-term” knock of €250m (R4.5 billion) to its income for this year after deciding to stop the brand’s business with immediate effect.

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With its announcement on Wednesday, CNN reports that Adidas will save about $300 million (R5.2 billion) in royalty payments and marketing fees if it sells the sneakers under its own branding.

“Going forward, we will leverage the existing inventory with the exact plans being developed as we speak,” Ohlmeyer said.

Yeezy items generated nearly $2 billion (R34.7 billion) in sales last year for Adidas. This reportedly accounts for 8% of the company’s total sales.