Kanye West Is Not the Highest Paid Person in Footwear, Top Adidas Exec Steps down
Kanye West made several outlandish claims on Wednesday, including an assertion that he’s “currently the single highest paid person in footwear” meaning, “I make more money on shoes than Michael Jordan.” He added that he expects his label to do $1 billion in 2018 sales (for comparison purposes, Jordan Brand did $3.1 billion in ’17), that the brand is the 2nd fastest growing business in history and that the company is on its way to becoming a decacorn ($10 billion valuation, would need to do $3 billion in sales annually). In other Adidas news, President Mark King has announced he will be stepping down effective July 1st; to be replaced by Zion Armstrong.
Howie Long-Short: Mark King has been credited with spearheading the company’s U.S. turnaround, so his loss hurts. In addition to perception changing collaborations developed with celebs like West and Pharrell Williams, he built a pipeline of desirable lifestyle (and retro) sneakers (Superstar, NMD, Stan Smith) and landed marquee sneaker and apparel contracts with Louisville, Miami, Texas A&M and Kansas.
Adidas sales were up 35% YoY in fiscal 2017, enabling the company to surpass Jordan Brand in U.S. sneaker sales and Under Armour in apparel sales. ADDYY will release Q1 ’18 earnings results on May 3rd.
Fan Marino: While it’s possible West earns more on per pair basis, there’s simply no chance he’s out-earning Jordan. His signature line is produced in such limited quantities and so few times/year (just 12x), that it couldn’t possibly generate comparable revenue. Jordan earned $110 million in 2017 royalties, 3x more than the next highest paid athlete (LeBron James). To put that number in perspective, West’s 2013 contract with Adidas in its entirety, was worth less than 10% of that figure ($10 million); he has since signed a new deal. Of course, West doesn’t just trail Jordan; he’s certainly behind Nike Chairman Emeritus Phil Knight too. Knight’s company did $34.35 million in 2017 sales. It must be noted that West has been acting erratically of late, earlier this week he fired his long-time manager Scooter Braun to “leave the traditional music business.”
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