Adidas and megastar Kanye West have parted ways, and in the process brand Adidas has prevented a public relations disaster. It’s turning out to be a valuable public relations case study.
Adidas ended its partnership with Kanye West after a string of controversies including a recent anti-Semitic outburst from the musician and fashion-brand owner.
The company will terminate the partnership with Ye, end production of Yeezy branded products and stop all payments to Ye and his companies.
The move, which ends a lucrative arrangement that has produced the popular Yeezy collection of sneakers, comes after weeks of pressure on the German sportswear company from human-rights advocates and after Gap, MRC film studio and other businesses severed their ties with Kanye West, who goes by Ye.
The costly Adidas and Kanye West “divorce”
The decision comes at a price: that Yeezy line of sneakers accounts for almost half of Adidas’s profits, according to estimates from analysts.
The Adidas decision follows weeks of deliberations inside the company, which over the past decade has built the Yeezy line into a brand that’s accounted for as much as 8% of Adidas’s total sales. The loss in earnings could be over $250 million.
The German company said it’s the “sole owner of all design rights to existing products, as well as previous and new colorways,” under the partnership.
Adidas earlier this month had called the partnership “one of the most successful collaborations in our industry’s history” and said it would continue co-managing Yeezy products during its review.
That success, however, had plenty of acrimony between the partners. The public relations battle between Adidas and the rapper has been raging for years. Ye has accused Adidas of copying his ideas and mismanaging the brand, and taunted outgoing Chief Executive Officer Kasper Rorsted on social media.
Meanwhile, Adidas has said it repeatedly tried and failed to resolve issues with Ye privately. The rapper said in September he wanted to negotiate with Adidas to get a 20% royalty on all the shoes he’s designed with the company in perpetuity.
Following his racist comments, Ye caused more controversy after by wearing a shirt at the Paris fashion week that said “White Lives Matter.”
He later got locked out of his Twitter and Instagram accounts after making repeated antisemitic remarks — remarks that have created a growing backlash from consumers and celebrities, with some calling for people to boycott Adidas products until the partnership is canceled.
Such a boycott would have cost Adidas billions of dollars and incalculable PR reputational damage.
The public relations lessons in the Adidas and Kanye West separation
The separation between Adidas and Kanye West has a hefty price tag on both parties. But the public relations cost to Adidas would have been far greater if it had continued in the sponsorship deal.
The Adidas and Kanye West celebrity partnership, throws up many public relations and influencer marketing lessons. Here are the top 3:
Superstars have a strong tendency to develop bloated egos. They may start normal, but stardom often intoxicates celebrities and they then behave differently. Brands must remain mindful of this potential and maintain a public relations reality check.
Brands must also ensure they have a damage control blueprint in place, so when a controversy breaks, they have a mechanism to deal with the public relations fall outs.
Watch the money
Financial terms should be agreed and fully understood, and the sharing formula for marketing success should not have any grey areas.
When celebrity endorsements produce run-away success, one of the parties may find finds to move the goalpost. This is probably why the lifetime Air Jordan deal between Michael Jordan and Nike, remains a win-win and PR disaster-free