US Court Dismisses Appeal Against Adidas Over Ye Partnership Termination

Adidas scores a legal victory amid the final throes of its controversial professional partnership with Ye, formerly known as Kanye West. The sportswear company has won an appeal filed by U.S. shareholders who accused it of knowingly concealing the celebrity artist’s anti-Semitic behavior before ending their partnership.

According to Reuters, the U.S. court in charge of the case has ruled that Adidas did not mislead shareholders in its annual reports. Moreover, it said that shareholders should know that a partnership such as West’s “carries inherent risks” related to misconduct. The court also concluded that there was no intent to deceive on the part of the German company.

The shareholders accuse Adidas of being responsible for the losses caused by the fall in the value of the company’s shares following West’s anti-Semitic comments, the same ones that caused the company to break off its partnership with him in October 2022, after nine years of relationship. According to the latest data, this union generated around $1.759 billion in sales in 2021.

The Court holds that Adidas did not mislead shareholders, who should have already known the risk involved in this type of collaboration

In addition, the investors maintain that Adidas chose to overlook Ye’s conduct, of which he was aware at least as early as 2018. According to them, Kanye West made “inappropriate comments on a regular basis” to both company employees and workers in his Yeezy brand design shop.

Adidas began in 2023 to sell its stock of the Yeezy sneakers at cost and pledged then to donate part of the proceeds to organizations fighting anti-Semitism. The sales culminated at the end of last year. In fact, the company’s North American revenue fell 2% last year because of this sales decline.

According to the latest data published, Adidas ended the first nine months of the year with a 52.17% increase in net income and a 5.73% rise in sales. In the third quarter, profit grew by 1.89%, while sales rose by 2.98%, reaching €6.63 billion, “the highest quarterly figure achieved by the group in its history,“ according to the group’s CEO, Bjørn Gulden.