Adidas and Kanye West settle legal dispute over split from Yeezy

Adidas has reached an agreement with Ye (formerly Kanye West) to resolve all outstanding legal claims arising from the company's decision to end its partnership with the rapper and his Yeezy brand.

The deal announced by the CEO Björn Gulden during a quarterly earnings conference call and first reported by Bloombergcame about two years after Adidas announced it was terminating its year-long brand deal with Ye due to his anti-Semitic comments and other erratic behavior.

“Both parties said we no longer needed to fight and withdrew all claims,” Gulden said in the call, adding that neither side would make payments to the other as part of the settlement. “No one owes anyone anything anymore. So what happened is history.”

It is unclear exactly what litigation was underway when the agreement was reached. The two sides conducted private arbitration over the split last year, but the status of that case is unknown. A representative for Ye did not immediately respond to a request for comment on Adidas' announcement.

Adidas, which had a lucrative sneaker collaboration with West for nearly a decade, was one of many companies to end its relationship with the rapper in fall 2022 after a series of bizarre statements and actions, such as the unveiling of a “White Lives Matter” shirt , ended at Paris Fashion Week, claiming he would “kill Jewish people.”

It was a messy breakup for Adidas. The split left the company with $1.3 billion worth of unsold Yeezys and no easy way to offload them, contributing to a $655 million loss in sales in the final three months of 2022.

Days after Adidas announced its split with West, court documents show the company demanded Yeezy return $75 million that it said had been deposited into its accounts. When Yeezy refused, Adidas secretly filed suit in federal court seeking an order to immediately freeze those funds. A judge initially granted that request, but later released the funds.

During the course of this litigation, both sides disclosed that they were also in private arbitration to terminate the partnership. The exact parameters of the dispute were kept secret, but Adidas argued in public court documents that Ye's “racist, anti-Semitic and other offensive public statements and behavior” had “caused significant damage to its brand” and led to the collapse of the partnership.

“Adidas has multiple causes of action against Yeezy arising from Ye's highly public and offensive conduct described above, which violated the terms of the Agreement and warranted adidas' termination of this Agreement,” the company argued. “These broader causes of action and the dispute over (issues) will be resolved through arbitration.”