Why Kanye West was abandoned by business partners is not a simple thing – The Hollywood Reporter

As the business empire and fame of music star and designer Kanye “Ye” West grows in free fall – after he appeared during Paris Fashion Week wearing a “White Lives Matter” shirt, the following it was a flurry of hostile comments in interviews and on social media platforms – what remains to be seen as his so far lucrative contract with Adidas and Gap will eventually unravel. how.

Over the past few weeks, West’s business empire in the fashion, finance, music and media industries has collapsed with not only Adidas and Gap but also Balenciaga, CAA, UMG/Def Jam, Vogue and JP Morgan Chase both cut ties with the artist.

But the deals between Adidas and Gap may be the most difficult to deal with the complex questions surrounding artificial intelligence rights and whether an ethics clause exists in the contracts, which is something privacy account.

In an October 25 statement ending its seven-year partnership with West, Adidas, which said it would lose up to $247 million in the short-term from ending sales of Yeezy sneakers, announced that they were “sole owner of all design rights to existing products as well as previous and new colors in the partnership. ”

But while Adidas may claim to own West’s designs for Yeezy, similarly, the star also owns a label under the Yeezy name. So, in theory, Adidas could move forward by producing Yeezy-like products without calling them Yeezy items, and West could continue to use the Yeezy name independently for similar products. or markedly different. Similar considerations apply to the Yeezy Gap line, which the retailer no longer sells and a partnership West has previously said he wants to dissolve.

“Typically, there are different types of deals when a big brand works with a celebrity. And depending on the stature of the celebrity, they will have different levels of leverage,” said Ellie Heisler, entertainment and intellectual property attorney at Nixon Peabody LLC, who has not seen the deal and is commenting based on what is shared publicly, say The Hollywood Reporter. “When Kanye started with Adidas, from day one, he was very clear that Yeezy was an extension of him. And so that trademark belongs to him; it is not owned by Adidas. So, with parting, unless there are certain restrictions or contractual obligations in the contract that restrict his right to use the trademark, he may switch from Adidas and use the Yeezy trademark under the way he wants, for he is the owner of it. ”

As for designs, there is little that can be legally protected, which is why lawsuits over copied designs are often heavily litigated in court. And the intellectual property question is complicated by the fact that West’s designs were developed in partnership with Adidas during the Yeezy branding process, so unless otherwise stated, Adidas as a sole proprietorship. How the financier will own the materials they create for the brand, including photography, marketing materials, visuals, and coloring.

Finally, there are different ways to end a contract; in this case, Adidas ended up walking away after West publicly challenged Adidas executives. “The problem is Adidas – I can say objectionable things and Adidas can’t leave me,” West said in a statement Drinking Champagne audio file. Earlier, he said that he wanted to end the partnership with this sneaker company in the name of creative freedom.

According to Heisler, a contract “could be terminated for breach by either party, so if Adidas doesn’t pay what they owe Kanye, then he can put them on notice of breach. Usually, either party has the opportunity to correct the breach, and if they don’t fix it within a certain amount of time, the non-breaching party can continue to attempt termination. “

However, in celebrity-based deals, there is almost always an ethics clause, which the West could in theory violate.

“In terms of ethics, it allows the brand to terminate the agreement if the artist or celebrity violates the ethics clause, and the ethics clause would normally say [this can happen] if you commit a crime or you do something that shocks or offends the public,” Heisler said. “These ethical terms are heavily negotiated. And indeed, a lot of times these days, celebrities have some leverage in asking for a mutual offer. For example, if a key executive of the brand commits a crime, they also have a way out of the deal, because a celebrity must also protect their reputation.”

The Yeezy Adidas line has been highly profitable, with the star’s products reportedly generating $2 billion in annual sales for Adidas. And according to West on his Instagram, his net worth fell from $2 billion to $400 million in just one day after ending his partnership with the sportswear giant. Germany, the company said it would stop all payments to the star and his companies.

Whether West can achieve success with his own Yeezy brand in the future is another matter, though that seems to be on his mind. On October 26, West marked his return to Instagram, after a hiatus, by sharing a screenshot of a text message conversation with an advisor discussing deals. translate his Adidas and Gap.

“With adidas, you can start creating new designs for shoes, clothing and accessories right away. For Gap, non-compete expires December 2022,” the text from his advisor read, adding: “You own the name Yeezy and all trademarks associated with Yeezy. “

However, one crisis manager told CHEAP that he believes West can one day fix his famous brand.

“Obviously he’s backed into a tight spot. But again, if you know him and you’re stalking him, he doesn’t really care. He believes being flamboyant like this has helped his career and made him the brilliant brand he is today, but I think he’s crossed the line this time,” said Juda. says Engelmayer, a journalist who specializes in crisis management and has represented the likes of Harvey Weinstein. Anna Delvey, tell THR. “It is due to the ego. It feels like you’re too big to fail.”

“Has Kanye gone too far?” continued Engelmayer. “He may have, but I don’t think he recovered in the past. America is still a very, very forgiving place. We like the underdogs, and we like people who will make us feel good by admitting their mistakes and saying they’ll rebuild. But he has to take a series of steps first; If he’s apologizing right now, it’s like he’s doing it for the money. “

Looks like West doesn’t currently have the advice of a publicist. Many famous people failed to hire a crisis management company before the crisis hit.

Meanwhile, the number of brands and companies that say they won’t do business with West continues to grow. In recent days, TJ Maxx, RealReal, Skechers, Peloton, Foot Locker and Christie’s have all joined the list of corporations that have publicly distanced themselves from the West.

“We do not sell any of these materials nor do we plan to have any,” a Christie’s spokesperson said in a statement to the publication. THR.

Peloton announced that it has “indefinitely suspended the use of Kanye West’s music” on the platform, adding: “This means that our instructors no longer use his music. in any newly produced classes and we do not recommend any classes with his music in actively recommending Members. And a Foot Locker spokesperson said in a statement: “We will not be supporting any future Yeezy product drops and we have directed retail operators to withdraw any products. available from our store shelves and digital sites.”

And Bottom Bunk Sneaker House, a shoe resale store on Melrose Avenue designed to service former incarcerated men and women, is also stopping selling Yeezy shoes.

Bottom Bunk founder Cole Richman told CHEAP via email that Yeezy products have historically sold well, making it “a huge financial hit for Adidas, as well as for the Bottom Bunk”.

“Making the decision to remove them from our inventory was not an easy choice because YZY [Yeezy] Products make up about 30% of our business, says Richman, but staying true to our values ​​is paramount. “[Adidas] will survive with their current lines and collaborations and find new ones but it will be extremely difficult to replicate what they already have with YZY. “

Richman began his own career in the sneaker resale market by buying a pair of Yeezys and selling them for a profit, noting that the Yeezy slides (retail for $70 and resold with $300) is a bestseller from the line and other sneakers that retail for $150 to $250 and can go up to $2,000 on the resale market.

“Yeezy’s will continue to be on sale for a while and is a shoe coveted by collectors but for everyday use, consumers will switch to something else,” says Richman. “When you’re talking about hype sneakers, the YZY footwear is really Adidas’ only offering and is absolutely its most popular shoe in that category.”

As for West’s next steps – the self-proclaimed “most influential artist of our generation” who has compared himself to Warhol, Shakespeare, Disney and others – Engelmayer predicts West will it is very difficult to get new partners in the future.

“Even if he has fans who love him, even if he writes a new song, who will label it? Who will sell it? I don’t think that happened to him,” Engelmayer said. “The best he can do right now is shut up, walk away, close the door and just stay in jail for two months. And then start rebuilding slowly. America is a very good place for communication. If you close the door yourself, no one will cover you. You are only news when you are news. As long as he kept his mouth shut, he became yesterday’s news.”