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How did Adidas deal with Kanye West’s controversies over the years? What were the partners’ requests during contract negotiations?
In 2016, Kanye West found himself in a growing number of controversies. The Daily breaks down how Adidas dealt with the backlash by reevaluating the Kanye West-Adidas contract that year.
Learn more about Adidas’s attempt to do damage control to save the company.
Contract Negotiations Between Adidas and Kanye West
As Adidas processed employee grievances over West’s volatile behavior, they still saw the lucrative partnership as an opportunity to be extended. Despite West insinuating that centuries of slavery could be perceived as a choice, sparking widespread outrage, Adidas did not resort to their morals clause to reprimand West. This was surprising given the existence of the clause designed for such situations.
During the 2016 Kanye West-Adidas contract renegotiations, the morals clause was introduced with the intention to enable Adidas to sever ties should West’s behavior prove detrimental. Meanwhile, West negotiated a lucrative agreement that ensured significant royalties, advance payments, and stock options, with performance-based conditions for extending the partnership potentially for a full decade. The sustained sales of Yeezy merchandise even after the end of the partnership continued to bolster Adidas’ financial outlook for the year.
How Adidas Addressed Kanye West’s Erratic Behavior
To manage the unpredictability stemming from West’s behavior, Adidas implemented measures such as assigning roles intermittently within the Yeezy division to reduce mental strain and provided meditation apps subscriptions. They also established a private communication channel to swiftly address Kanye’s frequent and demanding issues.
These strategies aimed to provide a buffer against the stress West’s actions could cause within the company, such as his abrupt interruption during a Sacramento performance where he praised Donald Trump and criticized various celebrities, and the immediate end to his show with subsequent cancellation of tour dates.
Additionally, his personal challenges, including hospitalization and a diagnosis of bipolar disorder, became public and added another layer of complexity to the partnership.
Context
Adidas, the multinational corporation renowned for its athletic shoes and apparel, has faced a challenging ethical dilemma in its partnership with controversial rapper and fashion designer Kanye West. The collaboration between Adidas and West, known as Yeezy, has been highly lucrative for both parties. However, West’s erratic behavior and controversial statements have raised concerns about the company’s reputation. Despite this, Adidas has chosen to continue its partnership with West, navigating the delicate balance between financial interests and ethical considerations.
To understand the complexities of this situation, it is important to have background knowledge of Adidas as a leading sportswear brand and West as a prominent figure in music and fashion. Yeezy is a brand created by West in collaboration with Adidas. In 2016, negotiations between Adidas and West resulted in a new agreement that included performance-based conditions for extending their partnership.
The podcast episode explores several underlying themes. Firstly, it delves into business decisions and ethics by examining the ethical considerations involved in Adidas’ decision to maintain ties with West despite his controversial behavior. Secondly, mental health emerges as an important aspect affecting business dynamics as the episode discusses how West’s erratic behavior attributed to his bipolar disorder impacted the partnership. It also highlights measures taken by Adidas to address these challenges.
Balancing financial interests with reputation is another key theme explored in this episode. While sales of Yeezy merchandise remained strong despite controversies surrounding West’s actions or statements that sparked public outrage (such as suggesting slavery was a choice), there were employee grievances related to his volatile behavior that had to be addressed by Adidas.
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