Compass Lexecon Client NCAA Wins Major Victory in Eligibility Rules Litigation

Compass Lexecon client, the National Collegiate Athletic Association (“NCAA”) was successful in overturning an injunction that challenged the implementation of Division I student-athlete eligibility rules for a class of Division I student-athletes who had exhausted their eligibility under prior rules and sought to join rosters for the current academic year.

Compass Lexecon Senior Consultant, Professor Matthew Backus, serving as the NCAA’s economic expert, was retained to assess Plaintiffs’ alleged relevant market definition of “the labor market for Division I athletics,” and Plaintiffs’ claims of anticompetitive harm within the alleged market.

In June 2026, NCAA Division I adopted age-based eligibility legislation that allowed student-athletes to compete in up to five seasons within a five-year period, with eligibility beginning with full-time enrollment in any college or the academic year following the student-athlete’s 19th birthday, whichever comes first, and eliminated most waivers. Prior to this, NCAA Division I student-athletes were allowed four seasons of play within five years, with various possible waivers (e.g., redshirt, medical). The allowance of five years of eligibility under the new legislation was not applied retroactively to those who had already exhausted their eligibility under the previous rules.

Plaintiffs sued the NCAA seeking a fifth season, claiming that the decision not to apply the new rule retroactively was an illegal restraint of trade in the labor market for NCAA Division I athletes, in violation of Section I of the Sherman Act. The district court granted Plaintiffs’ request for a preliminary injunction on July 31, 2026, which was stayed by the Tenth Circuit on August 21, 2026.

In its November 6, 2026 published decision in Wisne v. NCAA, the Tenth Circuit reversed and vacated the district court’s preliminary injunction. At the heart of the appellate decision was an issue Professor Backus had challenged: the Plaintiffs’ fundamentally flawed definition of the relevant labor market. The Tenth Circuit expressly cited Professor Backus’s analysis, adopting his central criticism that the proposed market was “patently implausible.” Professor Backus demonstrated why treating all Division I athletics, across every sport, gender, and skill level, as a single labor market was inconsistent with sound economic principles and the available evidence. His rebuttal also identified errors in the opposing expert’s calculations and introduced economic evidence concerning competition between collegiate and professional sports.

Professor Backus’s criticisms of the Plaintiffs’ relevant market served as a basis for the Tenth Circuit Court’s finding that the “district court clearly erred at the first step of the rule-of-reason analysis – defining the relevant market. In turn, the district court clearly erred when it concluded Plaintiffs had shown a likelihood of success on the merits based on that market.”

USA Today Sports described the decision as the NCAA’s biggest legal victory to date in the eligibility cases arising from the June rule change. The NCAA has said the decision is consistent with the approach of every federal court of appeals to have considered the merits of preliminary injunctions involving NCAA eligibility rules.

The Tenth Circuit’s opinion reinforced the importance of rigorous, evidence-based market definition in antitrust litigation.

Professor Backus was supported by a Compass Lexecon team led by Colleen Loughlin that included Daniel Stone, Liam Ziaja, Henry Kalil-Felbinger, and Mete Bakircioglu.

Compass Lexecon worked closely with the NCAA’s outside counsel, Rakesh Kilaru of Wilkinson Stekloff, Taylor Askew and David Zeitlin of Holland & Knight, and Andrea Wechter and Ben Kappelman of Dorsey & Whitney.