How Kanye West lost Ksh 194 billion in one day

GEOFFREY MBUTHIA ENTERTAINMENT SUB-EDITOR

26 October 2022

• The father of 4 has lost a lot of his net worth after Adidas cut ties with him over his recent remarks.

• Despite losing three quarter of his wealth, Kanye is still among the richest musicians in the world.

Clothing giant Adidas has cut ties with rapper Ye, known as Kanye West, saying it does "not tolerate antisemitism and any other sort of hate speech".

His products will be pulled from sale with immediate effect, said Adidas. Cutting the partnership means Adidas will make a net loss of £217m in 2022 as a result, it said.

The means that the rapper has also lost his position in Forbes magazine's list of billionaires. The magazine estimates the loss of the Adidas partnership has cut Ye's net worth from $1.5bn to $400m.

And how did they work this out exactly?

According to investment firm Cowen, Yeezy items account for 4% to 8% of Adidas' total sales. It was much more significant for Ye because it contributed $1.5 billion to his personal worth.

It brings to an end one of the brazenest and most volatile individuals to ever appear on Forbes' pages with a shocking, self-inflicted fall (and a magazine cover). Ye did not reply when contacted for comment.

The Adidas deal's $1.5 billion value was determined using a multiple of yearly earnings. According to Forbes' analysis of industry experts' interviews, the royalties Ye received from Adidas were comparable to residuals from movies or music albums.

According to those experts, Adidas' income stream might be sold off, much as dozens of singers, including Bruce Springsteen and Bob Dylan, have done during the previous two years.

Ye would be worth $400 million without Adidas. According to Forbes, Ye's music library, real estate, cash, and a 5% ownership position in his ex-wife Kim Kardashian's shapewear company, Skims, account for the bulk of his wealth.

Ye's exclusion from Forbes' list of billionaires brings an end to a protracted dispute between the two parties as he has always believed his wealth was understated.

Ye wasn't pleased when he first appeared on the list in 2020 with an estimated $1 billion fortune. At the moment, he told Forbes, "It's not a billion." Since no one at Forbes understands how to count, that is $3.3 billion.