Yesterday, Forbes announced that culture savant, Kanye West is a billionaire.
The revelation came seemingly out of nowhere and elicited congratulations from the entire world. The millennial’s wing of the hip hop culture saluting him especially. To see someone become a billionaire for being their cool quirky self is a poster child for nonconformity.
With an immense music catalog of his solo projects and those for other people, West is a musical phenom. However, it was his breakout moment with the Yeezy sneaker and brand that made the difference.
According to Forbes, West was dogged about being listed on the Forbes annual billionaires list. He insisted he was a member of the exclusive club, however, when pressed for the financial records he was more obtuse.
“I’m not a numbers guy,” he explained to Forbes ten months ago. “To ask me to somehow translate this to numbers is to ask your grandmother exactly what the recipe of the cake was.”
West claimed he was worth over $3 billion. Forbes asked for the receipts.
However, West finally gave them what was requested, and when they took a peek, he indeed is a billionaire. Immediately, the streets were abuzz and once it was realized that his stake in the super popular Yeezy brand put him in rare air.
Break It Down
According to Forbes, the Yeezy brand is a complicated asset. West owns 100% of it but it’s functionally tied to Adidas for five-plus years. This is because Adidas produces, markets, and distributes the shoes. There is also a separate apparel division, however, Forbes reports it doesn’t believe it makes money yet.
Last year, the shoes were projected to finish 2019 with revenue north of $1.5 billion. Recent internal documents showed the final revenue number being closer to $1.3 billion. West’s agreement provides a royalty around 15% of Yeezy revenue from Adidas.
Factoring in expenses, his actual cut closer to 11%. At that rate, he would have received royalties of over $140 million from Yeezy sales last year.
West’s aggressive $3 billion self-appraisal is based on the idea that the business is infinitely portable. However, Forbes believes it’s not. Yeezy and Adidas are conjoined at the hip and West’s payout can be likened to a royalty stream, like music publishing or film residuals.
The biggest items are $81 million in “buildings and improvements” and $21 million in land that he owns.
In addition, West’s G.O.O.D. Music label—and his own recorded music and publishing rights—to be worth at least $90 million.
Then there’s debt: Between mortgages, advances and other liabilities, we saw about $100 million that West is on the hook for. All told, our current net worth estimate for Kanye West: $1.3 billion. This is $300 million more than his sister-in-law, Kylie Jenner.
Forbes makes no secret that West has been dogged about them including him in the billionaires list for years. Now that he is on the list, he continues to badger them about the number being $3.3 billion and not $1.3 billion. From his insistence to out the fashion world and expose the classism within to his constant search for relevance to inspire millions, Kanye West is a unique enigma.
We know you’ve got it Kanye. Now, what will you do with it? More Sunday Services with Joel Olsteen, a contribution to the Trump campaign or maybe another fashion venture.