Adidas Starts Major Investigation Into Kanye West Porn Allegations, Contract Fights
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Sunday’s Wall Street Journal business section has updated the investigation into Kanye West’s behavior promised by Adidas after publication of last week’s Rolling Stone expose on Kanye. Among the damning assertions was reference to a group letter sent years ago — or even more than one —informing Adidas executive management of West’s absolutely unacceptable behavior in the rapper’s business and management practices.
Unlike Nike’s Michael Jordan standalone partnership, where the two groups are separate but both flying under the Nike banner, the Adidas - Kanye West relationship was run under the Adidas organization. Separate teams were created for the Yeezy business, but the staff was Adidas for the most part.
According to Rolling Stone, the Adidas employees claimed that senior managers were aware of West’s “problematic behaviour” but “turned their moral compass off” and failed to protect its employees against “years of verbal abuse, vulgar tirades, and bullying attacks.”
The German brand initially refused to address these reports last Wednesday, November 23.
“It is currently not clear whether the accusations made in an anonymous letter are true,” Adidas said in a statement on Thursday. “However, we take these allegations very seriously and have taken the decision to launch an independent investigation of the matter immediately to address the allegations.”
Because this all happened over Thanksgiving in America, AOC will refresh readers on what transpired in the last four days concerning Kanye West and his problems with Adidas.
Investor Demand for Investigation
The demand for a complete and detailed Adidas investigation into the history of the firm’s relationship with West came from Germany’s third largest asset manager, Union Investment.
The firm has a 1 per cent stake in Adidas and is a top-20 shareholder, according to S&P Global Market Intelligence. “Adidas needs to disclose when the management and the supervisory board was first informed about the internal allegations,” Janne Werning, head of ESG Capital Markets & Stewardship at Union Investment, told the Financial Times, in making public its insistance that Adidas detail the history of the Kanye West relationship.
Belgium investor GBL, which is Adidas’s single largest shareholder, has said nothing publicly. Several years ago GBL owned 7.5% of the Adidas and began selling down their position out of concerns about Adidas. Nothing we’ve read confirms that they knew about the Kanye West problem.
German asset manager Deka, which holds a 0.8 per cent stake, also declined to comment. Frankfurt-based asset manager DWS, which holds a 1.8 per cent stake, did not immediately respond to a request for comment from the Financial Times, as of Sunday night.
Rolling Stone Allegations
The damning Rolling Stone article on Kanye asserted a history of complaints and even a leave of absence at a senior level triggered by the rapper’s behavior and the women’s refusal to put up with him.
Without specifically saying so, it seems that WSJ has confirmed most of the Rolling Stone story.
West appears to have been a rude, crude, demanding, demeaning, controlling, sleezy, misogynist provocateur in his role as a critical Adidas partner.
It’s estimated that Yeezy products have made up about 7-8 percent of Adidas revenue, indicating that West had major interaction and impact of a significant portion of the Adidas staff.
New WSJ Nov. 27, 2022 Reporting on Adidas Executive Management and West
Executive Management Knew Scope of Kanye West Problem in 2018
In 2018 Adidas executive board members, a group that included then CEO Kasper Rorsted and the head of human resources, were informed via a formal presentation of the risks for employees interacting with Mr. West. AOC assumes the presentation was tied to a renewal of the Yeezy contract.
WSJ confirmed all the essential points of the Rolling Stone piece and went further into the details of the fall 2022 negotiations around renewal of a forward plan.
Staff Claims Against West Not Disputed
No media coverage has ever suggested that Adidas executives found the complaints about Kanye West to be exaggerated, unreasonable or merely part of what was expected of Adidas employees and staff should learn to put up with him.
WSJ writes that the 2018 presentation “detailed mitigation strategies for the relationship with the Yeezy creator, including cutting ties with the rapper-turned-designer.”
It’s important to understand that West was demanding to become creative director of all of Adidas in October, 2018, based on documents reviewed by WSJ.
No Evidence [Yet] that Adidas Confronted West
To date, there is no evidence that Adidas executives ever confronted Kanye West about his actual behavior with Adidas staff — including his widespread habit of shoving pornography in their faces.
Occasionally, the pornography included compromising images of his now ex-wife Kim Kardashian. Kanye shared Kim’s private ‘gifts’ or their mutual private sexual moments filmed by Kanye with Adidas staff and even in interviews with new staff women and men.
Rolling Stone inferred that the women, in particular, saw the pornography as a controlling factor over them. Kanye was making it clear that he was above the corporate rules — perhaps even above the law in Germany.
For reasons that are understandable from an exclusively revenue loss analysis, Adidas sought to keep the relationship with Kanye West intact — most certainly without agreeing to make him the creative director of all of Adidas.
Rotating Staff Maybe?
WSJ has reviewed documents suggesting that perhaps Adidas could minimize keep staff having direct exposure to Mr. West with some kind of rotation system.
According to WSJ, one proposal suggested running Yeezy similar to the way Nike runs the Jordan brand. This would keep Mr. West away from Adidas employees, and they would be Yeezy or West employees.
Such a move wouldn’t end the problem, but make it Kanye’s problem and not an Adidas one.
There was discussion of buying the Yeezy trademark and running the brand without West, who was expressing an intense interest in philanthropy and perhaps walking away completely if the money was sufficient.
Recognizing their own vulnerability with Kanye, strong arguments were made to expand Adidas’ relationships with other sports and entertainment figures.
There is a line in WSJ that is telling, though. Kanye West was getting $100 million a year to market and fund Yeezy in philanthropic ventures. “Adidas executives decided that any spending beyond Adidas-related activities could help sell more sneakers as long as Mr. West kept himself in the headlines, the people said.”
Until Kanye West Headlines DID NOT Sell More Adidas Sneakers
Adidas executives also knew of complaints about West’s expressed antisemitism in 2018. Kanye had already made his infamous “slavery sounds like a choice” comment to TMZ and told Adidas staff he wanted to name his new album after Hitler.
Fast Forward to 2022 and New Adidas-Ye Negotiations
In the Spring of 2022 — as part of his social media daily frenzy that was primarily focused on winning back his wife Kim Kardashion while throwing every name in the book at Pete Davidson — West began to call out Adidas executives and accuse them of stealing his designs and trying to exploit him.
West’s rip-off accusations weren’t related to legal agreements in which Adidas — like most major brands — owns the Yeezy designs. In one case that caught AOC’s attention, West was accusing Adidas of ripping off his design when the development of the Yeezy shoe and all its technology was originally part of a 2010 Adidas shoe.
The original shoe that inspired Kanye’s ‘update’ of the design existed long before West arrived at Adidas. In reality Kanye was ‘severely inspired’ by an existing Adidas design.
Kanye has the view that “Everything is mine. It’s all mine. All good ideas come from me. I am the only one who can fix it.” Sound familiar?
Simply stated, starting with the Fashion Law website into this WSJ analysis, everyone agrees that Adidas owns all the designs from the past. By September, Kanye was definitely trying to renegotiate those terms, but the legal case seems pretty airtight in Adidas’ favor.
Also, all those Yeezy shoes are carrying propriety Adidas patented technology that predates his arrival in most cases. West is laying claim to years of technical research and development in the shoes.
How Ye thinks “it’s all mine” — the R&D development — defies logic. But there is no logic in dealing with Kanye West.
The Blowup Approaches
In August 2022, Kanye was all fired up over not approving the Yeezy Day, and again was writing hostile social media posts about Adidas. Executives assured staff that they had signed documents that Ye had approved Yeezy Day.
It seems that August became a point of reckoning for Adidas that the Kanye West relationship was about to blow sky high.
And yet, the executives continued to negotiate with West — after he shoved a porn video in their faces WSJ suggests that the voice on the porn video sounded like one of the top Adidas executives, a numbing experience for that executive who may have been subject to the new technology where the sound of our own voices is attached to videos that have nothing to do with an actual event.
Perhaps CEO Kasper Rorsted himself — who announced in August that he would leave Adidas in 2023 — was the voice. Given that Kanye shared that video on YouTube — showing him showing this phone in the faces of Adidas executives and we see and hear their astonished response, it seems that Kanye West may have crossed the line legally in a major way.
Note that a new Adidas CEO Bjørn Gulden takes over on Jan. 1, 2023. A veteran of Adidas who brought great results to Puma, Gulden can’t get there soon enough. Read on: Highly-Skilled Bjorn Gulden Leaves Puma to Lead Adidas Back to Glory
Like his pal Trump, Kanye is above the law in his own mind.
In September 2022 Adidas Was Making Concessions to Kanye
WSJ writes that new contract negotations continued in the fall, after Gap announced that it was severing ties with Ye on Sept. 15:
Adidas made an offer conceding to many of Mr. West’s demands, including ownership of new designs, paying royalties for copycats and offering to increase the royalty payment to 20% on existing Yeezy designs after 2026. But the company wanted him to give up the annual marketing payment.
West refused the deal. With the $100 million marketing money returning to Adidas, it’s clear they wanted to get marketing decisions — and public presentation of Adidas as a partner of Yeezy products — back into Adidas hands.
Mr. West wasn’t satisfied. He wanted Adidas to give him ownership of existing designs, and wanted the company to sell the designs without Yeezy branding—and pay him a 20% royalty for them, according to the people. He also wanted $1 billion worth of Adidas stock once sales of existing products hit $5 billion, and an additional $2 billion in stock if higher sales targets were reached, the people said.
White Lives Matter Day in Paris
And then all hell broke loose, with the White Lives Matter shirt. It was as clear to Adidas as to any of us who have high-level executive experiences in branded negotiations, that when later Kanye next went ballistic with antisemitism that there wasn’t a court anywhere in the world who would back him. Even uber-conservative Supreme Court Justice Clarence Thomas would agree that Kanye West had violated the morals clause in his contract in talking about going “def con 3” on Jews and posting it out to the world at large.
The bomb had just gone off for good. Ye had just wiped himself off the Forbes Billionaire List in one giant, grandiose act of self-destruction.
I can easily understand the frustration — especially among young people — with Adidas being willing to continue on with Ye — even in September 2022, as revealed in the WSJ article.
This is probably the most hideous situation I’ve seen in business — and the financial stakes could not be higher — not only for Adidas stockholders but also their employees.
This is a $20 billion brand we are talking about limping out of a COVID economy in Europe, with a war in Ukraine, massive energy shortages, an unreliable Chinese supply chain, and Putin acting as crazy as Kanye.
Adidas had to cut off the cancer of Kanye. You cannot have a racist, antisemite, misogynist, bomb-thrower egomaniac who thinks he’s God running lose, terrorizing your entire company.
There’s a strong argument to be made that different options should have been exercised in 2018, when Adidas was considering not renewing Kanye’s contract — given what they knew.
West was diagnosed with a serious bipolar condition in 2016, which he now disputes. There were flags all over the field about Kanye’s West erratic and potentially dangerous actions for years.
Presently, Kanye is focused on sowing discord far and wide across America. He is aligning himself with the most right-wing and bigoted, misogynist forces in America. It is all so, so, so sad but it is also very dangerous. Kanye West, legally known as Ye, is a very dangerous person as we move into the 2024 presidential election cycle . ~ Anne
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Note from Anne: I have tried to keep so much politics out of these fashion pages, being very active in the Kanye news elsewhere in the AOC website. My plan is to continue that practice but at least do weekly summaries in the fashion channel of what is happening.
Our organization of the Fashion, Branding, News pages is working very well with their own links.
AOC will not be shoving politics in our faces going forward. But I will bring big overview articles like this one to this Fashion channel, giving friends of AOC the option of reading it or not.
At this point I am so concerned about Ye and his destructive path for America and race relations generally, that he will have his own page complete with all other right-wing news events. ~ Anne
