How Nike lost the $1.5 billion Yeezy Deal
Nike and Kanye West started developing the Nike Air Yeezy in 2007.
Throughout 2008 Kanye was spotted wearing various prototypes of the Yeezy’s, including many color ways that never hit shelves. The “Nike Air Yeezy 1” finally dropped in a zen grey colorway in April 2009, followed by the black colorway in May and in June a tan beige colorway was released. The initial price for the sneaker was $215 but as we know how crazy the sneaker collecting and reselling game became, you will have to spend $2,000 plus to get your hands on a pair of the “Nike Air Yeezy 1”.
The “Nike Air Yeezy 1” was ahead of its time and wildly popular in spite of its chunky and gigantic look. Pretty much every celebrity you can think of was wearing a pair.
After the huge success of the first version Nike and West began developing the “Nike Air Yeezy 2” and this time it would come with a much more animalistic design, with snake skin inspired features on the shoe. In the lead up to the release of the sneaker Kanye received a lot of celebrity co signs like Jay Z shouting him out during a performance in 2012 while already wearing a pair of the new sneakers.
Nike officially announced them in May 2012, originally only announcing a platinum and black colorway but later on also an all red colorway famously known as the “Red Octobers”.
The “Red Octobers” were announced in June 2012 and only 5,000 pairs would ever be produced. They retailed at $245 but immediately went on to be resold online for between $4,000 and $90,000.
Before the shoe even dropped the fallout between Nike and Kanye had already begun, with West stating he himself did not even know when the “Red Octobers” would drop. Kanye went on saying he had to ask Nike when the shoe was releasing, with Nike replying they were not sure at the time. During concerts of his Yeezus Tour which started at the end of 2013 Kanye went on dragging Nike publicly. As well as discussing his tense relationship with Nike on his now famous interview with Zane Lowe on BBC. After that interview Nike tried to smoothen out the relationship by offering Kanye more freedom and higher budget to create. But Kanye felt that the level of skill, the reaction his designs had created as well as the money it brought in for Nike were enough for him to deserve more control and earning royalties from his creations. Nike told him that they could not offer him royalties because he was not a professional Athlete.
By the time the “Red Octobers” were dropped as a surprise release by Nike, Kanye had already stopped wearing the “Nike Air Yeezy’s” and the relationship between him and Nike fell apart completely. It is rumored that the surprise release of the “Red Octobers” was only made so that Nike could get out of the deal with West and release him.
Even though Nike was more popular, Kanye decided to take on a new challenge and signed with Adidas in December 2013. Kanye stated “ I just might have taken the new Nike deal because I just loved Nike so much, but the new me with a daughter takes the Adidas deal because I have royalties and I have to provide for my family”. Adidas is reported to have lured Kanye with an amazing offer supposedly worth $10,000,000 plus royalties.
In hindsight Nike should have kept Kanye happy and gave him what he wanted, as they could have had another big brand right next to the Jordan brand.
As we all know by now Kanye West’s Adidas Yeezy line reached $1.5 billion in sales in 2019.