Perspective matters; Intellectual Property (IP) Assets matters more, and Kanye West has them, as does Adidas Group.
Before stoning Kanye West for what many do not have the full picture of, we need to know how the business of IP assets works. Like Piers Morgan, who then schooled on his show after wanting to give Kanye financial advice, there is need to school people of how Kanye West is still a billionaire even after the contract was cancelled with Adidas Group et al.
The ending of partnership between Adidas and Kanye West was sudden.
“Ye’s recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fairness,” they said in a statement. “Adidas will stop the Adidas Yeezy business with immediate effect,” they wrote in a press release They said this is expected to have a “short-term negative impact of up to €250 million” on the company’s net income in 2022.
Media opinion does not shape business valuation, nor does it instantly make null and void, a contract in session, especially one involving stock and intellectual property assets.
If we rewind time a bit, we will realise that in 2009, years before starting the collaboration with Adidas, Kanye released two pairs of Yeezy sneakers with Nike. This is not his first global footwear gig, and he owns intellectual property in this whole equation.
Kanye West is the owner of the billion-dollar brand called “Yeezy”, which trademark was registered in 2010, under Mascotte Holdings Inc., a company he owns. This trademark is responsible for the creation of a global phenomenon of a shoe line that generates US$2 billion in revenue annually.
Fortune Magazine reported that “Ye’s company, Mascotte Holdings Inc., appears to operate a portfolio of more than 164 trademark applications and registrations for his Yeezy brand, but Adidas owns the rights to the designs of most Yeezy shoes, including the well-known Yeezy Boost 350.”
“Filings with the US Patent and Trademark Office show that Adidas obtained a series of design patents for the Yeezy Boost 350 shoe in 2017 and 2018. The shoes were created by Nic Galway, Adidas’ vice president of global design, according to the filings” Fortune reported. Whilst there are many legal complexities, it is unclear of how the outcome will be as both parties claim rights to certain aspects of the deal – licensing, design, and trademark.
Intellectual Property management from inception is what will keep Kanye West well above centi-millionairehood bordering billionaire-hood. Well into 2023, Kanye West will still be paid by Adidas and that is not small money.
The Yeezy business earned more than $500 million in total royalty payments and marketing fees through 2020, the first four years of the Adidas deal. Ye’s pact with Adidas gave him a 15% royalty on wholesale Yeezy products, Forbes reported in 2019, but Ye told Bloomberg News in September that he wanted to renegotiate to a 20% lifetime agreement.
Suppose Kanye gets to just walk away with the name, and Adidas keeps the designs; this means he is still the owner of a global brand called YEEZY, and that is not a small thing. The name has been seen by over 4 billion people and worn by over 20 million sportswear enthusiasts globally. That is brand and social equity. The brand Apple or Coca-Cola is worth more than the production of the products themselves.
This is a lesson to many business owners and influencers.
As business owners take on influencers, the need to know who they are endorsing is very important, because in the event they “Kanye West Controversy Tweet” on you, there is need to know what to do.
On the other hand, influencers must know who they are getting into bed with and make sure their intellectual property is registered and managed well. Being a celebrity and influencer without knowledge of intellectual property will have companies railroad you in and out of contracts.
When you know your intellectual property as an influencer, you command attention on a global scale because you are that important. Adidas vs. Kanye is about Intellectual Property, and we must look at it correctly.
It’s just good business to manage your intellectual property well, even as an African creative or influencer.
Sources: Fortune, Bloomberg, Forbes, Adidas Group
WhatsApp for a Google-Ready Website
