In October 2022, Adidas terminated its partnership with Kanye West.
The financial impact was immediate and brutal. Adidas warned investors to expect $1.3 billion in lost revenue for 2023. The company posted its first annual net loss in three decades—a 513 million euro hit by year’s end.
West’s personal wealth dropped from $2 billion to $400 million virtually overnight.
This wasn’t just a brand divorce. It was a complete restructuring of how corporations approach controversial creator partnerships.
The Numbers That Tell the Story
At its peak, the Adidas-Yeezy partnership generated $1.7 billion in annual revenue, netting West $191 million in royalties. That represented roughly 10% of Adidas’ total brand revenue.
The concentration created a single point of failure.
When Adidas announced the termination on October 25, 2022, the company had $1.3 billion worth of Yeezy sneakers sitting in warehouses. The decision came just 18 days after placing the partnership “under review.”
The speed of the collapse reveals something important about modern corporate risk management.
Once public pressure mounted, the decision happened fast. Gap, Balenciaga, and Creative Artists Agency all terminated their relationships with West within days. The cascading exits demonstrated how reputational contagion risk drives corporate decision-making.
The Warning Signs Were There
Over the past decade, West made antisemitic remarks to Adidas managers and employees. He showed pornographic films to female staff. He engaged in verbal abuse.
Adidas overlooked it all.
The tolerance ended when the controversy became public and impossible to contain. Investors later sued Adidas in the U.S., alleging the company had long known about West’s offensive remarks and harmful behavior.
The lawsuit highlighted a critical shift: corporations can no longer maintain separation between a creator’s personal views and their product when facing public scrutiny and legal liability.
The Recovery That Didn’t Happen
By March 2025, Adidas finally sold off the last of its Yeezy inventory, generating approximately €650 million in 2024, down from €750 million in 2023.
West hasn’t found another major apparel partner.
He apologized to the Jewish community in 2024, then revoked the apology in February 2025. He praised Adolf Hitler, called himself a Nazi, and bought Super Bowl advertising slots to promote T-shirts emblazoned with swastikas.
The behavior demonstrates why certain types of reputational damage create permanent market resistance.
Today, Yeezy operates as a significantly smaller direct-to-consumer entity, recovering only 13% of its peak revenue. The brand health score plummeted from 95/100 to 10/100.
What This Means for Brand Partnerships
The Yeezy collapse established a measurable framework for understanding reputational damage:
Minor controversies led to $50-100 million impacts.
Critical controversies caused $500 million to $1.5 billion losses.
The direct correlation between controversy severity and financial damage is now quantifiable. You can track it. You can model it. You can prepare for it.
More importantly, the case revealed the vulnerability of partnerships built on single-channel distribution. Yeezy’s reliance on Adidas—87% of revenue flowing through one partnership—meant the brand had no cushion when that relationship ended.
The New Corporate Calculus
YouGov BrandIndex data showed something unexpected: while the decision to drop West cost Adidas money in the short term, it increased consumer willingness to buy from the brand among 18-34 year-olds and existing customers.
The data suggests that taking a stand on values can strengthen brand loyalty, even when it comes with immediate financial pain.
Corporations now face a different risk equation. The cost of maintaining a controversial partnership often exceeds the cost of termination, especially when factoring in legal liability, employee morale, and long-term brand health.
The Yeezy collapse didn’t just end a partnership. It established new standards for how quickly corporations must act when facing reputational threats, how much risk concentration they can tolerate, and what happens when brand values and creator behavior diverge publicly.
The lesson is clear: in an era of instant public accountability, the financial cost of inaction exceeds the cost of decisive separation.
Even when that separation comes with a $1.5 billion price tag.
