Sharing Of College Athlete N.I.L. Data Raises Interesting Antitrust Questions

Earlier this week, Ross Dellinger of Sports Illustrated reported that Opendorse, a company that provides N.I.L. endorsement support to colleges and athletes, has created a proprietary book to allow its clients to share biannual data about the average pay from college athlete endorsement deals, which is broken down by the athletes’ sport and position, as well as by athletic conference. While it is easy to understand why N.I.L. collectives at NCAA member colleges would find value in obtaining this information, the plan to distribute this information among clients poses some novel questions about the antitrust sensitivity of data in the emerging world of college athlete endorsement deals.

Generally speaking, the exchange of information about financial transactions has been a source of debate among antitrust regulators—irrespective of whether the information exchanged includes product pricing, employee salaries, or other sensitive cost data. Specifically, antitrust regulators are most concerned about the exchange of information among competitors where they believe that rivals’ access to industry-wide information will facilitate their collusion on the price of products or the compensation they plan to offer employees.

Given that certain information exchanges are more likely to facilitate collusion than others, antitrust regulators are typically far more concerned about information exchanges where the shared data is specific and based on current transactions and thus can be used by companies in future bidding. By contrast, information exchanges based on past, aggregated data or data already publicly available are perceived as more benign.

Without having access to the data in Opendorse’s N.I.L. book, which Dellinger describes as “confidential and private,” the information, based on Dellinger’s description clearly does not seem to fall under the antitrust riskiest form of data because Opendorse’s shared data is purportedly aggregated by sport, position, and conference. Nevertheless, by providing this information to athletes, colleges, and N.I.L. collectives, there is still an increased risk of stabilizing the value of N.I.L. deals—especially at a time when the college athlete endorsement market in new and dynamic.

Along similar lines, providing N.I.L. endorsement data to NCAA member colleges also can create concern that access to this data will help college and conference employees to identify schools or conferences where athletes perform exceedingly well in signing endorsement deals—thus making it easier for them to accuse these schools of violating what remains of the NCAA’s Principle of Amateurism.

Indeed, in this brave new world of college athletes finally having the opportunity to endorse products, novel questions are bound to emerge about the methods that data pertaining to athlete endorsement deals are collected, used, and shared. While Opendorse is perhaps the first company that will need to address the antitrust issues pertaining to the exchange of data they have collected, it would not be surprising to see rival companies encounter these same concerns in the years ahead.

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Marc Edelman ([email protected]) is a Professor of Law at Baruch College’s Zicklin School of Business, Sports Ethics Director of the Robert Zicklin Center on Corporate Integrity, and the founder of Edelman Law. He is the author of “A Short Treatise on Amateurism and Antitrust Law” and Reimagining the Governance of College Sports After Alston.