WATCH | Ye loses billionaire status as Adidas ends deal over hate speech

The termination of controversial rapper Ye's partnership with Adidas has knocked the musician off the Forbes list of the world’s billionaires, according to Forbes.

Adidas on Tuesday announced it would terminate its partnership with the rapper and fashion designer after he made anti-Semitic remarks.

Adidas put the tie-up, which has produced several hot-selling Yeezy branded sneakers, under review this month.

“Adidas does not tolerate anti-Semitism and any other sort of hate speech,” the German company said.

Forbes magazine said the end of the deal meant Ye’s net worth shrank to $400m (R7.3bn). The magazine had valued his share of the Adidas partnership at $1.5bn (R27bn). 

The remainder of Ye’s wealth comes from real estate, cash, his music catalogue and a 5% stake in ex-wife Kim Kardashian’s shapewear firm, Skims, Forbes said.

Representatives for Ye did not immediately respond to a request for comment.

For Adidas, ending the partnership and the production of Yeezy branded products, as well as stopping all payments to Ye and his companies will have a “short-term negative impact” of up to €250m (R4.5bn) on net income this year, the company said.

Ye has courted controversy in recent months by publicly ending major corporate tie-ups and making outbursts on social media against other celebrities. His Twitter and Instagram accounts were restricted, with the social media platforms removing some of his online posts that users condemned as anti-Semitic.

In now-deleted Instagram posts earlier this year, the multiple Grammy award-winning artist accused Adidas and US apparel retailer Gap Inc of failing to build contractually promised permanent stores for products from his Yeezy fashion line.

He also accused Adidas of stealing his designs for its own products.

On Tuesday, Gap, which had ended its partnership with Ye in September, said it was taking immediate steps to remove Yeezy Gap products from its stores and it had shut down YeezyGap.com.

“Anti-Semitism, racism and hate in any form are inexcusable and not tolerated in accordance with our values,” Gap said.

European fashion house Balenciaga has also cut ties with Ye, according to media reports.

“The saga of Ye underlines the importance of vetting celebrities thoroughly and avoiding those who are overly controversial or unstable,” said Neil Saunders, MD of GlobalData.

Adidas poached Ye from rival Nike in 2013 and agreed to a new long-term partnership in 2016 in what the company then called “the most significant partnership created between a non-athlete and a sports brand”.

The tie-up helped the German brand close the gap with Nike in the US market.

Yeezy sneakers, which cost between $200 (R3,641) and $700 (R12,745), generate about €1.5bn (R27bn) in annual sales for Adidas, making up a little over 7% of its total revenue, according to estimates from Telsey Advisory Group.

Shares in Adidas, which cut its full-year forecast last week, closed down 3.2%. The group said it would provide more information as part of its upcoming Q3 earnings announcement on November 9.