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Adidas’ decision to part with Ye was commercial, not social

by: Sabrina Clarke

· Sustainability,Media

On 25 October 2022, Adidas announced they terminated their partnership with Ye. Four aspects of the statement stood out to me about this announcement:  

  • Adidas said they "do not tolerate antisemitism and any other sort of hate speech."
  • Adidas would end the production of Yeezy-branded products.
  • They expect a short-term negative impact of up to €250 million on the net income in 2022.
  • Adidas is the "sole owner of all design rights to existing products as well as previous and new colourways under the partnership."  

Adidas's decision seemed to respond to the reputational crisis they were experiencing. The optics of a German-founded company, given Germany's history with Jewish people, in association with a highly visible partner who is on record making antisemitic remarks, was damaging. It would therefore indicate; Adidas did the right thing. The protest from grassroots leaders and influencing voices worked as some espoused. In short, Adidas understood its responsibility to uphold the tenets of social and economic sustainability.  

However, examining the relationship with Ye critically, I concluded the decision by Adidas to terminate its partnership with him wasn't a social one; it was commercial. I arrive at this conclusion based on the above mentioned four aspects in the official statement and receipts I will present.  


If Adidas does not tolerate antisemitism and any other hate speech, why is the partnership with Ye ending now 

The recent comments by Ye toward Jewish people were both explicit and implicit antisemitism. For example, as explained by the Anti-Defamation League (ADL), when Ye commented, "I can't be Anti Semitic because black people are actually Jewish also", this was an implicit remark that questioned Jewish identity. When Ye made remarks about Jewish people "controlling the media and recording industry", these were explicit tropes that had been around for years.  

Given the implicit and explicit nature of Ye's comments, it stands to reason the same test should apply to Ye's other words and antics. Here is where Adidas had the problem. The ADL cited Ye's statements in 2013 alleging "Jewish people are more well-connected than Black people and therefore have an unfair advantage". In 2018, Ye settled a lawsuit with a former employee who alleged Ye "praised Nazis and Adolf Hitler multiple times." Ye denied the accusation in the settlement. However, there was a pattern associating Ye with antisemitic remarks before 2022. So, if there was an intolerance the decision should have come sooner.  

In my opinion, Adidas ending Yeezy products and experiencing a short-term negative impact on the business was a signal to the markets. The Adidas share price has plummeted from November 2021 to November 2022. In November 2021, the share price peaked at €298.40; as the scandal raged on, the share price plummeted to €93.95 as at 3 November 2022. It is crucial to answer a critical question. What happened to the share price when Ye premiered his "White Lives Matter" T-shirt and when he made his antisemitic remarks? Ye released a photo of the "White Lives Matter" T-shirt premiere on the 3 October. Adidas' share price experienced a dip at €119.00 ending in September but shot up to €126.20 the day the photo was released.  

Conversely, the share price is telling when Ye makes his antisemitic remarks. He makes his comments and doubles down through his tweets and from his appearance on the Drink Champs podcast (where his antisemitic comments go viral, Ye also makes untrue statements about George Floyd in the same video). From when the Drink Champs video started gaining popularity between 17 October to 31 October, which includes Adidas' statement on 25 October, the share price declined from €118.80 to €93.95.  

There could be many reasons the share prices increased or dipped in both scenarios; however, there is a correlation to be made. Making anti-black remarks wasn't bad for business but making antisemitic comments were. I think Adidas ended the partnership because if the trend continued, a €250 million net income problem would exponentially increase in context. It wasn't a social decision but a commercial one to stop the haemorrhaging.  

Adidas made it a point to note in their statement that they are the "sole owner of all design rights to existing products as well as previous and new colourways under the partnership." This statement suggests that the door is open to making products without the Yeezy trademark. The possibility of Adidas branded products links back to the commerciality of what might happen in the future because Adidas will need to recoup its losses.  

So what can be concluded from Adidas' choice to terminate the partnership with Ye if it was a commercial decision? Not all hate speech is equal; ultimately, decisions are still made based on the impact on the brand/business, not feelings.

Update: since writing this article, Adidas announced its partnership with Balenciaga. The designs are Ye without the name.

You can read my follow-up: What say you Adidas about their partnership with Balenciaga.