Kanye West’s Net Worth Is Now Officially $3 Billion

Kanye West’s Net Worth Is Now Officially $3 Billion

In recent years, Kanye West has easily been the most discussed net worth on our website. Literally, not a single day goes by without someone sending us an email complaining that our number is wrong. Some people think the number is far too low. Some believe it is far too high. For the record, before today, our figure was $ 600 million.

Part of the challenge is that Kanye himself has been all over the place in finance. Do you remember when Kanye announced on Twitter that he was $ 53 million in debt after spending a fortune to launch and direct Yeezy?

Above all, the biggest question mark regarding Kanye’s wealth has always been the value of his clothing brand Yeezy.

What does he have? What does Adidas have? Is its royalty rate 5%, 10% or 25%? Does it receive a royalty on gross income or net profits? Can he leave the partnership? Does it have a minimum warranty?

I think of a dozen Kanye / Yeezy financial issues that have been extremely difficult to pin down… so far.

We are here today to make the following official announcement:

Kanye West is, without a doubt, not only a billionaire but a multi-billionaire.

Kanye West is the richest rapper on the planet.

He is one of the richest celebrities on the planet.

Complete stop. No debate. We have seen the numbers. And we will share these numbers with you now…

Kanye West Billionaire

Roy Rochlin / Getty Images

Jordan Henderson Net Worth

Let’s take a step back for a moment

When assessing the net worth (assets minus liabilities) of a person like Kanye West, we have followed the following categories for more than a decade:

  • Cash
  • Stock / investments
  • Immovable
  • Its music catalog (including G.O.O.D Music)
  • Yeezy
  • Other random liquid assets (art, jewelry, cars)

On the side of responsibility, it is essential to know how much Kanye owes in mortgages, in bank loans and if he really has another personal debt linked to the launch of Yeezy. We have good faith (mainly on the basis of a public real estate record), that Kanye’s various mortgages and bank debts mature around $ 100 million.

When we previously calculated Kanye’s net worth at $ 600 million, we used the following figures:

  • Real estate assets = $ 120 million
  • Music catalog including G.O.O.D Music = $ 80 million
  • Yeezy brand value = $ 500 million
  • Other assets = $ 20 million

Total assets = $ 720 million

Liabilities and other considerations = $ 100 million

Net worth = $ 600 million (with a conservative margin of error of $ 20 million)

It turns out that we were far from the current value of Yeezy…

Brand Yeezy

When evaluating the Yeezy brand, there are two key questions to consider:

1) What is the present value of future Adidas royalties guaranteed by Kanye?

-> In other words, if Kanye is guaranteed to earn X per year for the next 6 to 8 years, what are they worth now?

2) What is the brand’s future value for Kanye personally if he moves away from the Adidas partnership?

-> In other words, if Kanye decides to make and sell his own products, what is the value of this hypothetical future business based on today’s performance and projected performance?

These are extremely difficult questions to answer. Fortunately for wealth trackers like us, a recent financial disclosure from Yeezy has thrown A TON of light into everything we might want to know.

Warning. The numbers are impressive. Here we go:

a) Here are Yeezy’s real revenues from 2017 to 2019:

2017 = $ 300 million

2018 = $ 864 million

2019 = $ 1.5 billion

b) Yeezy is expected to generate $ 1.7 billion in revenue in 2020 (even with COVID, it seems). Here are the income projections for the years 2020 to 2016:

2020 = $ 1.7 billion

2021 = $ 2 billion

2022 = $ 2.3 billion

2023 = $ 2.6 billion

2024 = $ 2.8 billion

2025 = $ 3 billion

2026 = $ 3.1 billion

vs) If these figures continue, Kanye would personally earn the following annual royalty totals:

2020 = $ 214 million

2021 = $ 247 million

2022 = $ 289 million

2023 = $ 323 million

2024 = $ 359 million

2025 = $ 379 million

2026 = $ 391 million

Total = $ 2.2 billion

Now back to our two main questions.

1) What is the present value of future Adidas royalties guaranteed by Kanye?

Using a basic discounted cash flow analysis, Kanye could very well get someone to pay for it $ 1.4 billion today to buy this stream of royalties. Why would someone do this? Because they clearly think that fees will increase over time and maybe even faster than expected. Why would Kanye take $ 1.4 billion today instead of earning $ 2.2 billion in the future? Maybe he wants money to start a new business? Maybe he just wants to become a venture capitalist where a good bet pays 10X? Or maybe he just wants to stop working so hard.

Here’s the second question:

2) What is the brand’s future value for Kanye personally if he moves away from the Adidas partnership?

For the second part of the equation, we have to estimate the “final value” of the Kanye company in 2026. In other words, what would we pay Kanye today to own the 2026 value (and at beyond) Yeezy?

According to recently released financial information, the answer is $ 1.8 billion.

(Current royalty value $ 1.4 billion) + (Terminal value today $ 1.8 billion) = $ 3.2 billion the total present value of Yeezy right now.

To be honest, these numbers represent the best possible scenario for the Yeezy brand. They also assume that there is a buyer around the world who would be willing to shell out over $ 3.2 billion today for his brand. A brand that is inextricably linked to Kanye. Would you pay $ 3.2 billion for Yeezy without Kanye?

And although your first reaction to this question is “NO”, it is actually somewhat common. Kate Spade sold a majority stake in her business to Neiman Marcus six years after its launch. Tommy Hilfiger sold the majority of his business to investors Lawrence Stroll and Silas Chou just four years after its launch. Today, Lawrence and Silas are each worth about $ 3 billion. Lawrence probably has the most precious private collection of Ferrari on the planet. Earlier this year, he bought 17% of Aston Martin.

But let’s forget to sell the business. Instead of selling the present value of his hypothetical future business, let’s say Kanye is drawing a future where he operates 100% independently without Adidas. After all, he recently bought over 6,000 acres in Wyoming, including a commercial manufacturing plant.

As he plans and plans, he will almost certainly earn $ 2.2 billion in royalties between 2020 and 2026. At this point, if he turned to a 100% independent operation, he would own and operate a company that generates hundreds of millions of dollars a year in profits. . Frankly, if these numbers materialize, Yeezy could easily be worth $ 4-5 billion over time.

Here’s a more conservative way to project the value of Yeezy –

Let’s say that by 2026, Kanye owns and operates Yeezy 100% independently without Adidas. And let’s say his annual profits are $ 200 million, 50% less than what he currently plans to earn. So we are conservative.

If we use a multiple of EBITDA 10X on profits, the independent business is worth $ 2 billion in 2026 after it sits down and earns $ 1 billion to $ 2 billion in royalties. And it’s a conservative multiple. Similar mature retail companies trade at 15 to 20 times EBITDA. At these levels, his 2026 business that generates $ 200 million in profit is worth $ 3-4 billion.

Calculation of net worth

The same recently released financial information contains even more detail on Kanye’s other assets. Namely its real estate, Yeezy.com, its music catalog and G.O.O.D Music. Below is an updated net worth calculation taking everything we just learned into account, using a conservative value of $ 3 billion for the Yeezy brand:

  • Real estate assets = $ 120 million (no change)
  • Music catalog including G.O.O.D Music = $ 80 million (no change)
  • Yeezy.com website = $ 100 million (new number)
  • Yeezy brand value = $ 3 billion ($ 2.5 billion increase)
  • Other assets = $ 20 million (no change)

Total assets = $ 3.32 billion

Liabilities and other considerations = $ 100 million

Net worth = $ 3.2 billion (with a conservative margin of error of $ 20 million)

This number is distinct from his wife, Kim Kardashian. Together, Kim and Kanye have a net worth of at least $ 3.6 billion.

Kim and Kanye’s $ 3.6 billion cumulative net worth is $ 600 million more than double the $ 1.5 billion combined Jay-Z and Beyonce’s net worth.

The richest celebrities

In our opinion, the only richer celebrities than Kanye at this point are Oprah, Steven Spielberg and George Lucas:

# 4: Kanye West – $ 3.2 billion

# 3: Oprah Winfrey – $ 3.5 billion

# 2: Steven Spielberg – $ 3.7 billion

# 1: George Lucas – $ 6.5 billion

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