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Feinberg sheds light on FCAA, how compensation could be handled

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Renowned mediator Kenneth Feinberg could play a key role and determining how former athletes should be compensated if Ed O'Bannon wins his case against the NCAA or gains a favorable settlement.

In an exclusive interview with SI.com, renowned mediator Kenneth Feinberg sheds light on the Former College Athletes Association (FCAA). The FCAA is an organization that awaits a world where former college athletes are entitled to compensation for the commercial use of their names, images and likenesses. Should Ed O'Bannon and Sam Keller's lawsuits against the NCAA prevail or lead to favorable settlements, former college athletes would be owed compensation when they appear on classic broadcasts, trading cards, video games, apparel and other products. The FCAA would be ready to assist in the transition and would have procedures in place for former college athletes to obtain their share.

Feinberg plays a crucial role at the FCAA as a board member. Other board members include two of the most prominent advocates for college players' rights, Sonny Vaccaro and Ramogi Huma. An announcement of additional board members is expected soon and there will likely be major names revealed.

Feinberg is a legendary figure in the world of fund distribution. He oversaw the allocation of victim funds for the September 11th terrorist attack, the BP Deepwater Horizon disaster and the Boston Marathon bombings. He is consistently entrusted with the difficult choice of deciding how much money goes to whom. Feinberg's involvement with the FCAA lends it instant credibility and expertise.

With the O'Bannon and Keller cases headed for trial next month, the FCAA might soon become active. Feinberg shares key insights with SI.com on what to expect.

An overview of the FCAA

While imaging a world where college athletes are entitled to compensation from the NCAA is a speculative exercise, the FCAA would play a central role in it. The FCAA would demand from the NCAA a share of revenue it generates from the commercial use of individuals who are no longer college students. The share would reflect some percentage of revenue, and there may be varying percentages depending on the type of revenue at stake. For instance, former athletes may be entitled to higher or lower percentages of revenue generated by television and Internet broadcasts of classic games in which they appear, television highlights of their play and computer and video games where avatars representing them are on game rosters. The precise arrangement of percentages would presumably be contained in an order by U.S. District Judge Claudia Wilken as a result of O'Bannon winning his lawsuit or in a negotiated settlement between O'Bannon and the NCAA. The funds would be deposited in a "trust fund" for former college athletes, and from there distributed by the FCAA.

The distribution of funds by the FCAA to former college athletes would require formulas, and Feinberg says those formulas, along with associated bylaws and regulations, are "still in development." In other distributions supervised by Feinberg, individuals and businesses have been awarded different amounts of money depending on such factors as type of injury suffered, proximity to the harm, loss of revenue pegged to prior years' averages and quality of supporting documentation. As an illustration, business geographically closer to oil spills have received more money because of proximity, but their type of harm and prior earnings matter, too.

Feinberg has generally received praise for developing formulas that balance equity and fairness, although some have complained his methodologies are too rigid. No matter what formulas are used, some do better than others. The same would be true of former college athletes should they be entitled to compensation. Some would do better than other former players and some would likely complain. Potential factors for formulas are numerous and may include type of sports played, playing time, team and individual exposure on television, statistical performance and public recognition.

Along those lines, it is possible that college athletes at big-time sports schools would receive more from the FCAA after college. This could provide a recruiting advantage for coaches at big time sports schools when recruiting star high school athletes. It is important to stress, however, that until formulas are finalized and revealed, it is difficult to know their possible impact on college sports. Feinberg emphasizes that the FCAA would be "fair" in distributing any money.

FCAA would be a voluntary organization

Former athletes would not have automatic membership in the FCAA. This is a distinction from athletes who fall within one of the class action lawsuits against the NCAA, NFL and now Major League Baseball over minor league players' salaries. In those cases, if a judge certifies a class and if the plaintiffs win or settle, membership would be presumed unless one opts-out of the class. Former athletes, in contrast, would have to register with the FCAA, and Feinberg says there would be a website available for easy registration.

Not every former athlete may want to join the FCAA. Highly marketable former athletes, perhaps aided by sports agents, may reason they can strike better deals on their own with the NCAA. Feinberg makes clear former athletes can choose as they like. "It's not a matter of opting out -- you have to opt-in," Feinberg stresses. "You have to register. If you don't register, you're not a member. This is a free country."

FCAA would be open to all former college athletes, male and female

The O'Bannon and Keller lawsuits have raised legal claims on behalf of football and men's basketball players, but not other athletes. The FCAA is far more inclusive. Feinberg says the FCAA is "gender neutral" and "will represent all former college athletes. Men and women."

FCAA would not distribute money "paternalistically"

Much has been written about athletes going broke after their playing careers end. Might it make sense for the FCAA to distribute money gradually to former athletes, so that they receive certain amounts at age 25, then more at ages 35 and 45 and so on? While stressing that formulas for payment are still being determined, Feinberg bristled at the notion of a "paternalistic" system. He emphasized that former college athletes are "adults" who should be able to make their own choices. Expect former athletes to be paid as money is earned on their names, images and likenesses, rather than paid later in deferred payments.

FCAA would not promote college athletes unionizing or professionalizing college sports

Even though a fellow FCAA board member, Huga, is president of the National College Players Association and a leading voice for college athletes unionizing, Feinberg emphasizes that the FCAA has no relationship with the attempt by Northwestern football players to unionize. "Our organization is only for former college athletes," Feinberg points out. "We are not part of the debate on college players' unions."

As to concern that the FCAA might accelerate the professionalizing of college sports and create incentives for sports agents to visit campuses, Feinberg rejects that notion. "We're not talking about college students in the FCAA. Those who join the FCAA won't have a relationship with their college beyond being alums. They're like you and me: members of the market place, making business and life decisions."

FCAA would draw from the NCAA's share of revenue, not television and video game companies' share

Media, broadcast and video game companies have clearly profited from college sports, including through the names, images and likenesses of former athletes. Feinberg stresses that the FCAA would only draw from the NCAA's share of revenue, not from advertising and other revenues paid to other companies. This is good news for ESPN, CBS and other companies that generate considerable revenue through the use of former college athletes. Those companies, however, could still face lawsuits brought by former college athletes over the commercial use of their names, images and likeness. The FCAA would play no role in such litigation.

The NCAA has not been receptive to the FCAA

When asked if the NCAA has been receptive to the FCAA, Feinberg was unequivocal: "absolutely not." When asked if that might change, Feinberg replied, "If [the NCAA] incurs an adverse judgment, they'll be responsive."

Michael McCann is a Massachusetts attorney and the founding director of the Sports and Entertainment Law Institute at the University of New Hampshire School of Law. He is also the distinguished visiting Hall of Fame Professor of Law at Mississippi College School of Law.

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