Federal appeals court rules that Adidas did not have to warn investors about Kanye West's antisemitic behavior before the brand cut ties with him.
In a ruling issued last Wednesday, a federal appeals court rejected a lawsuit filed by a group of investors who claimed Adidas knew internally about serious problems with its partnership with Ye (formerly known as Kanye West) as early as 2018 but failed to disclose them. The investors argued that Adidas was misleading them and leaving them to face losses when the Yeezy partnership, which had been incredibly profitable for nearly a decade, finally came to an end in October 2022.
However, the court disagreed, saying that investors should have already known about Ye's "public notoriety" for "improper behavior" before they partnered with him. According to the ruling, "A reasonable investor would know that a partnership with a celebrity partner like Ye would come with inherent risks."
The court also noted that Adidas had warned investors about potential problems that might cause its share price to drop, including the risk of "improper" behavior by celebrity endorsers having a negative impact on the company's reputation. However, the court said that this disclosure was not misleading, as it presented the hypothetical risk as a negative effect rather than the improper behavior itself.
The case is seen as a significant victory for Adidas and its executives, who had argued that they were not required to publicly disclose their concerns about Ye's behavior. The investors' lawsuit claimed that Adidas should have taken steps to mitigate the risks associated with the partnership, but the court said that this was not the company's responsibility.
In a statement announcing the split from Ye, Adidas said that the rapper's statements had been "unacceptable, hateful and dangerous." The decision has had significant consequences for both Adidas and investors, who will now have to confront the reality of what happened in the partnership with a celebrity whose behavior was so toxic that it ultimately killed the deal.
In a ruling issued last Wednesday, a federal appeals court rejected a lawsuit filed by a group of investors who claimed Adidas knew internally about serious problems with its partnership with Ye (formerly known as Kanye West) as early as 2018 but failed to disclose them. The investors argued that Adidas was misleading them and leaving them to face losses when the Yeezy partnership, which had been incredibly profitable for nearly a decade, finally came to an end in October 2022.
However, the court disagreed, saying that investors should have already known about Ye's "public notoriety" for "improper behavior" before they partnered with him. According to the ruling, "A reasonable investor would know that a partnership with a celebrity partner like Ye would come with inherent risks."
The court also noted that Adidas had warned investors about potential problems that might cause its share price to drop, including the risk of "improper" behavior by celebrity endorsers having a negative impact on the company's reputation. However, the court said that this disclosure was not misleading, as it presented the hypothetical risk as a negative effect rather than the improper behavior itself.
The case is seen as a significant victory for Adidas and its executives, who had argued that they were not required to publicly disclose their concerns about Ye's behavior. The investors' lawsuit claimed that Adidas should have taken steps to mitigate the risks associated with the partnership, but the court said that this was not the company's responsibility.
In a statement announcing the split from Ye, Adidas said that the rapper's statements had been "unacceptable, hateful and dangerous." The decision has had significant consequences for both Adidas and investors, who will now have to confront the reality of what happened in the partnership with a celebrity whose behavior was so toxic that it ultimately killed the deal.
. If Adidas didn't have to warn investors about Kanye West's antisemitic behavior, then shouldn't they be held accountable for not doing more to stop him? I get what the court is saying - a celeb like Ye comes with risks - but what about the actual harm he caused? It feels like the company is getting off scot-free 
. And what about all the people who lost money because of this partnership? It's just not right 
.
. I'm thinking about why Adidas didn't feel like they had to warn us about Ye's antisemitic comments before they cut ties. Like, wouldn't it be common sense to let investors know if their partner was gonna say some super hurtful stuff? But the court said it was already known and we should have just taken the risk 
. I'm not buying it, tbh. It feels like Adidas is trying to shift the blame onto us as investors instead of taking responsibility for their own actions 
. What's crazy is that they even knew about Ye's problems internally but didn't think it was worth disclosing publicly 
. And now we get to deal with the fallout... this is a tough one to swallow 
. And now investors are left to deal with the fallout 
. And yeah, Adidas did warn investors about potential risks, but it was all very vague and watered down. I mean, who wants to invest in a company that's just gonna say "watch out for Kanye" without actually telling you what he's done? 
It's just not right 
.
! like i get it they warned investors about the risk but come on, ye's antisemitic behavior is not exactly something you can just "mitigate" and be okay with 
. it's not like they were expecting him to start spitting fire at them or something, but nope, instead they get to keep their cash and basically say "sorry not sorry" 
. i feel bad for the investors who are gonna be taking a hit on this one 
and Adidas got the best of it 
this ruling is so messed up adidas knew about yeezy's antisemitic behavior internally but still didn't warn investors, putting them at risk and costing them money 
. meanwhile, adidas is trying to distance themselves from yeezy's toxic behavior by calling his statements "unacceptable, hateful and dangerous" 
Like, come on! How could they not know something was seriously wrong with partnering with someone who has a history of spewing hate speech? 
It's like they were just trying to cover up the fact that they got in over their heads. And now we're left wondering why investors even bothered investing in the first place... 