Kanye West has just suffered a major financial setback after Adidas ended their lucrative Yeezy deal in response to his anti-Semitic scandal. The move makes it incredibly unlikely that he is still a billionaire, according to Forbes.
Forbes estimated that West had made $2 billion off of his relationship with Adidas — a staggering $1.5 billion of which he’s going to lose now that the deal has fallen through. That accounts for most of his net worth, which was reduced to a comparatively paltry $400 million after the loss.
Forbes estimate that the $1.5 billion value of West’s Adidas deal is based on a multiple of their annual earnings.
The only assets left in the mogul’s portfolio after his bail bankruptcy are his music catalog, his real estate holdings and liquid cash, as well as a 5% stake in Skims, Kim Kardashian’s burgeoning shapewear business.
Columbia University sports management professor Joe Favorito says there’s a lot at stake. “When you part ways with a company that’s your major distributor, it has to have an impact on the bottom line,” he told The Post.
For years, Kanye West has accused the media of underestimating his empire. During a controversial interview with Chris Cuomo on NewsNation earlier this month, West said he believed the “Jewish underground media mafia” was attacking him – in part by misrepresenting how much money he has.
“Ever since I made my billions, no one even calls me a billionaire anymore,” West complained. “All of the sudden I’m just some rich douchebag—no tycoon, nothing. It’s like I spare them the tough words. Shortcuts.”
Forbes reported that West contacted the publication every year to complain about their valuations.
The estimated wealth of the West has varied greatly in recent years. Forbes claims he’s worth $2 billion, while Bloomberg estimates his worth to be as much as $6.6 billion.
Two years ago, the Wall Street Journal published an article stating that the value of West’s Adidas segment could be as high as $3.7 billion.
Adidas predicted that its decision to sever ties with West would have a sizable negative impact on its earnings in 2022, with expected losses from $250 million up to approximately 0.5% of its net income.
According to Baird analyst Jonathan Komp, the most recent Kanye West and Adidas collaboration was reportedly worth $1.8 billion in annual revenue and a “high-30% operating margin” for the company.
“After a thorough review, the company has taken the decision to terminate the partnership with Ye immediately, end production of Yeezy branded products and stop all payments to Ye and his companies,” Adidas said in a statement on its decision. “Adidas will stop the Adidas Yeezy business with immediate effect.”