Michigan-Nike Contract: the School Seizes and Sells New Player Data

Author Michael Lewis’ 2012 Princeton Baccalaureate speech described an experiment by two Cal psychology professors who assembled a series of three students to meet, and arbitrarily designated one as the group leader. The participants were told that their purpose was to solve some complicated moral problem; in fact, the professors wanted to observe how the three would react when, halfway through the gathering of the three students, they were interrupted by a person who placed on the table before them a plate of four cookies.

“With incredible consistency,” Lewis said, “the person arbitrarily appointed leader of the group grabbed the fourth cookie, and ate it. Not only ate it, but ate it with gusto: lips smacking, mouth open, drool at the corners of their mouths. In the end all that was left of the extra cookie were crumbs on the leader’s shirt. This leader had,” Lewis continued, “performed no special task. He had no special virtue. He’d been chosen at random, 30 minutes earlier. His status was nothing but luck. But it still left him with the sense that the cookie should be his.

The 2016 contract Michigan signed with Nike contains a few nuggets. First, notice that Nike no longer describes itself as a ‘manufacturer.’ It’s now just a “sports and fitness company engaged in the design, marketing, distribution, and sale of athletic and athleisure footwear, apparel, and related accessories.” A middleman.

More important, though, are the brand-new provisions which pertain to the right to player-generated data. An entirely new definitional category is described on page one, labelled, “Activity-Based-Information,” which is defined as “performance and/or activity information/data digitally collected from the Teams or Team members during competition, training or other cover Program Activities, including but not limited to speed, distance, vertical leap height, maximum time aloft, shot attempts, ball possession, heart rate, running route, etc.”

The operative lawyer’s term here is ‘including, but not limited to,’ which means that this is a nice, innocuous-appearing list, but it’s tiny compared to the tractor-trailer load of data which Nike can haul off with, as a result of this provision.

And Michigan grants to Nike the “right to utilize . . . Activity Based Information . . . in all media including, but not limited to, the worldwide web and other interactive and multimedia technologies, in connection with the manufacture, advertising, marketing, promotion and sale of Nike products and Digital Features and programming [which use shall be] on an aggregated, anonymous and de-identified basis and otherwise in compliance with [Big Ten, NCAA, and Michigan] regulations.”

[Michigan’s contract also identifies a category of “Smart Products” defined as: “(e.g., fuel bands, etc.), body-worn (or handheld) activity tracking/monitoring devices (e.g. heart-rate monitors, pedometers, etc.) and/or performance of fitness improvement and/or activity enhancing electronic or digital devices including, but not limited watches (GPS and non-GPS-enabled) and performance tracking monitors (collectively ‘Fitness Devices’)…”

By way of contrast,  Illinois’ December 2015 contract with Nike contains no reference to any ‘Activity-Based-Information,’ or any school grant of rights to the data. See also Alabama’s 2010 Nike contract, which also contains no such ABI provision.]

Michigan here is seizing a new Fourth Cookie. This is not a cookie which was ever known back when amateurism was founded in mid-19th century London. Data, publicity rights, NIL rights — they were all unknown then. And this is very personal data. So there are no strict ‘amateurism’ precedents which dictate that this player data must belong to Michigan, rather than the player, sufficient to allow Michigan to sell or lease that data to Nike.

 

But this is just one more such Fourth Cookie which has been arbitrarily seized by the NCAA or school. When Nike and others wanted to put logos on the player’s shoes back in 1978, the ‘revered tradition of amateurism’ had no precedents which made clear that the coach had the sole right to sell those promotional services, or even that the school did. The coach [and later, the school] just seized that Fourth Cookie.

In this era of the explosion of publicity and promotional rights, and of the personal brand, Michigan has just signed a ten-year contract ceding to Nike personal player performance data. Even though the data is “de-identified’ it has, in the aggregate, tremendous, if not fabulous potential value: obviously, Nike intends to aggregate that data, on an ongoing basis, by inserting these  ‘right to Activity-Based-Information’ provisions in contracts with every school — and Nike intends to then sell aggregated performance data, as a product, for increasingly large amounts.

The result? No wonder Michigan got $173 million for a ten-year contract: millions or even tens of millions of dollars of that price recognized the mammoth value of this brand-new player-performance kind of value which Nike is purchasing from Michigan. Michigan sold its player’s data, without even telling the players, or getting authorization. (The SAS signed by the player by no means makes it clear that such data is surrendered by the player; nor do pertinent NCAA bylaws.)  In the professional leagues, that sale of data is a subject which an be addressed through the collective bargaining process, but the college player nowhere has any sector-based group to push their collective interests.

But Michigan just seized that Fourth Cookie of player data, for its own use and advantage. This is the kind of arbitrary appropriation of player economic opportunity (under the guise of looking out for ‘player welfare’) which has been the core identifying — and corrupting — characteristic of amateurism — since the ‘student-athlete’ stage name was dreamed-up in 1956, as a cover for the pay-to-play scheme which was set up that year.

Amateurism’s cardinal rule is not ‘no-pay’; it is that the school gets to seize all economic opportunity which might come the player’s way.

Rather than spending its time discussing how it will execute the annual charity event conducted by ‘student-athletes’, the ‘Student-Athlete Advisory Committee’ needs to discuss this forced ‘charity’ donation of its valuable player data which has been visited upon them by Michigan.

Copyright William Wilson 2016

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