Kanye West has come a long way financially in the last five years. In 2016, he was at one point $53 million dollars in debt. Earlier this month, he was initially thought to be the richest black man in American history, but it turns out his net worth is actually over $1 billion. Regardless of what conflicting reports say Kanye is worth, there’s no dispute that his financial turnaround from 2016 to now is incredible to say the least. Here are four reasons he was able to make it happen.
Yeezy
Kanye’s sneaker brand, Yeezy, started in 2006 with it’s first partnership being with Bape. He also collaborated with Louis Vuitton and Nike before finding a home for his brand with Adidas in 2015. What drew Kanye in was that he would have full creative control and receive royalties from each Yeezy sale. According to GQ, he got 5% of royalties from shoes and apparel in 2019. The brand made about $1.3 billion in sales. This means that he received about $65 million during that year. Expect Kanye get even more wealthy in the upcoming years as the Yeezy continues to grow as a brand.
Collaboration with Gap
Although this deal doesn’t factor into his reported net worth yet, business moves like this are why Kanye is the successful man he is today. This collaboration between Yeezy and Gap by itself is worth almost a billion. Gap believes that this combo will be worth a billion in eight years and expect get a billion as early as 2023. When interviewed by Nick Cannon, Kanye stated that this deal with Gap made his net worth increase to $5 million. Their apparel will be for adults and children, and is expected to be in stores later this year.
Brilliant Marketing
Kanye has his work cut out for him promoting his Yeezy sneakers as he's not the typical person with a shoe deal. Normally, star athletes are the ones who earn that privilege. One reason people buy shoes with a star's name like Stephen Curry is to feel like him when they're on the basketball court. While Kanye doesn't have athletic prowess, he makes up for it by being one of the most successful rap artists ever and an outspoken personality. His name recognition creates hype around a shoe and he takes advantage of that by having a limited quantity of what he's selling. One of his shoes called the Boost 350 sold out in stores and online after only being on sale for an hour. This proves to be affective as it creates urgency for consumers to buy since his shoes aren't easy to come by. There is no time for a indecisive consumer since Yeezys could be sold out during that time wasted deciding whether to buy or not.
Kanye brings more hype by having shows with a fashion runway format where celebrities are donning apparel from a new collection he's promoting. Moving Image & Content created the films for Kanye's first few campaigns and the founder Quynh Mai said, "Yeezy’s marketing approach is effective because it balances exclusivity (art, celebrities) alongside mass (Instagram, movie theaters). His campaigns are creative artistic expressions while his distribution strategies are mass."
Don't Forget About His Music
While Kanye is mostly know for being a legendary and influential musician, it is surprisingly not the top reason for him recovering from $53 million in debt. In recent months, he's been feuding with his label over owning the masters to his music. He sees it as an unfair deal, but actually many artists would ecstatic if they were in his position. Every album Kanye has released since 2016, which includes The Life of Pablo, Ye and Jesus is King, he was able to collect 100% of the profits received from each of them. As time passes by, he will have full master control of Ye and Jesus is King in 2026, and The Life of Pablo and Yeezus in 2036.
When an artist or label owns masters, it means that they have full control on what to do with the music. Having this power also allows Kanye to decide on the financial gains on what he owns. With the influence he's had on the rap genre and will have on future artists, his songs are probably going to get sampled at some point. On any artist he cosigns a sample with, Kanye will receive some royalties from them since it uses snippet of his music. He also the head of the G.O.O.D. Music label and claims he owns 50% of his own artists masters. Some of his current and former artists have made songs to chart at the top of Billboard, so he gets a decent piece of the pie.
Sources: Limited Run Shop, GQ, Complex, Business Insider, Vice, Pop Sugar, NME