# Ohio v. NCAA: The Antitrust Injunction That Freed College Transfers

> A federal court enjoined the NCAA's transfer sit-out rule as a Sherman Act restraint, then a consent decree permanently ended it in 2024.

Topic: Right of Publicity  |  Author: Lidiia Levitska  |  Source: Intellectual Property Law (outsideipcounsel.com)
Canonical: https://outsideipcounsel.com/blog/ohio-v-ncaa-transfer-rule-injunction/


*Ohio v. National Collegiate Athletic Association*, No. 1:23-cv-00100 (N.D. W. Va.), is the case that effectively ended sit-out rules for transferring college athletes and helped usher in something close to free agency in Division I sports. A coalition of state attorneys general sued the NCAA in December 2023, contending that the association's rule requiring multi-time transfers to sit out a year of competition was an unreasonable restraint of trade under Section 1 of the Sherman Act. Judge John Preston Bailey of the United States District Court for the Northern District of West Virginia entered a temporary restraining order in mid-December 2023, which the parties converted into a preliminary injunction barring enforcement of the rule. The litigation resolved in 2024 through a consent judgment that permanently enjoins the sit-out requirement. Because a year on the bench directly suppresses an athlete's name, image, and likeness earning power, the case sits at the intersection of antitrust and the modern economics of college-athlete publicity.

## At a glance

- **Case:** *Ohio v. National Collegiate Athletic Association*, No. 1:23-cv-00100 (N.D. W. Va.), before Judge John Preston Bailey.
- **Decided:** Temporary restraining order entered December 13, 2023, converted to a preliminary injunction later that month; consent judgment entered in 2024.
- **Holding:** The plaintiff states were likely to succeed in showing that the NCAA's multi-transfer sit-out rule unreasonably restrains the labor market for Division I athletes in violation of Sherman Act Section 1, warranting an injunction against enforcement.
- **Status:** Resolved by a consent decree that permanently enjoins the Transfer Eligibility Rule and requires restored eligibility for affected athletes.

## The rule and the antitrust theory

The NCAA's Transfer Eligibility Rule, embodied chiefly in Division I Bylaw 14.5.5.1, allowed an athlete a single transfer with immediate eligibility but required those who transferred a second or subsequent time to complete a year in residence, sitting out competition, unless they obtained a waiver. The stated rationale invoked academic continuity and competitive balance. The plaintiff states, led by Ohio and joined by Colorado, Illinois, New York, North Carolina, Tennessee, and West Virginia, framed the rule as a naked restraint on the market for athletes' labor.

Their Section 1 theory built on the Supreme Court's decision in *NCAA v. Alston*, 594 U.S. 69 (2021), which subjected NCAA restraints on athlete compensation to ordinary rule-of-reason antitrust scrutiny and rejected the notion that the association enjoys special immunity. If restrictions on what athletes may receive are subject to the Sherman Act, so too, the states argued, are restrictions on where and when athletes may play, because those rules govern the same market for athletic services. A rule forcing an athlete to sit out a year raises the cost of switching schools, suppresses competition among schools for players, and diminishes the athletes' bargaining position and earnings.

## Why the court enjoined the rule

To obtain a preliminary injunction, the states had to show a likelihood of success on the merits, irreparable harm, a favorable balance of equities, and that an injunction served the public interest. Judge Bailey found the antitrust showing sufficient. The sit-out requirement operated as a horizontal restraint agreed among competitor schools that limited athletes' ability to move freely and to compete for playing time, the very thing that generates their value. The court was skeptical that the asserted justifications, such as academic continuity, could carry the rule under the rule of reason, particularly given *Alston*'s insistence on genuine procompetitive justification rather than tradition or paternalism.

The irreparable-harm analysis is where the NIL dimension became decisive. In the current environment, an athlete forced to sit out loses not only a season of play but a season of visibility, and visibility is the currency of name, image, and likeness deals. A benched athlete cannot build the profile that attracts NIL compensation, and lost playing time cannot be recovered. That concrete, non-compensable injury to athletes' present eligibility and earning capacity supported injunctive relief. The court entered the restraining order, and the parties then agreed to a preliminary injunction suspending enforcement.

## From injunction to permanent decree

The preliminary injunction was quickly followed by a broader resolution. In January 2024, the plaintiff group expanded, adding the United States Department of Justice through the Antitrust Division and several additional states. The enlarged coalition and the NCAA negotiated a consent judgment, with a proposed final judgment filed in May 2024. Its central command permanently enjoins the NCAA from enforcing the Transfer Eligibility Rule or any substantially similar rule that conditions eligibility on a period of residence or non-competition after a transfer between member institutions.

The decree went further than simply lifting the rule going forward. It required the NCAA to restore a year of eligibility to Division I athletes who had been held out under the rule in prior seasons, reaching back several years, and it barred the association from using its rule of restitution to punish athletes or schools that had relied on the injunction. The practical effect is that Division I athletes are now immediately eligible upon transfer regardless of how many times they move. What had been a discretionary, waiver-gated system became, by force of an antitrust decree, unrestricted transfer.

## What it means beyond transfers

*Ohio v. NCAA* is significant less for any single doctrinal innovation than for demonstrating how thoroughly *Alston* reoriented the legal treatment of NCAA rules. Once athlete-related restraints are subject to ordinary antitrust analysis, a wide range of eligibility and mobility rules become vulnerable, because most of them limit competition in the market for athletic services and are difficult to justify under a rigorous rule of reason. The case also showed the potency of state attorneys general and federal antitrust enforcers acting together, using the injunction and consent-decree mechanism to reshape NCAA governance faster than private litigation typically can.

For the law of athlete publicity specifically, the decision embeds a now-common premise: eligibility restrictions are not merely internal governance but economic constraints that suppress athletes' NIL earning capacity. That framing, treating lost playing time as lost commercial opportunity, has propagated into a wave of follow-on eligibility challenges.

## Open questions

- **Which other eligibility rules survive?** If sit-out rules fall as restraints, the durability of other limits, on seasons of competition, junior-college time, and age, becomes uncertain and is being tested in parallel litigation.
- **How far does the labor-market framing extend?** Treating athletes as participants in a labor market invites broader questions about employment status, collective bargaining, and revenue sharing that the transfer decree does not resolve.
- **What procompetitive justifications can the NCAA still mount?** The consent decree ended this rule without a full merits trial, leaving open how the NCAA might defend future restrictions under the rule of reason with a developed record.

## Implications for athletes and institutions

- **Transfer is now unrestricted in Division I.** Athletes can change schools and remain immediately eligible regardless of the number of prior transfers, a direct product of the antitrust injunction and consent decree.
- **Eligibility rules are antitrust-exposed.** After *Alston* and this case, NCAA restraints on where and when athletes may play are analyzed like any commercial restraint, so institutions should expect further challenges.
- **Lost playing time is a compensable competitive injury.** Courts now recognize that benching an athlete suppresses NIL earning power, which strengthens irreparable-harm arguments in eligibility disputes.
- **Enforcement coalitions move fast.** State attorneys general and federal antitrust authorities can reshape governance through injunctions and consent decrees well ahead of ordinary private litigation timelines.

## Frequently asked questions

**What rule did Ohio v. NCAA challenge?**
The states challenged the NCAA's Transfer Eligibility Rule, primarily Division I Bylaw 14.5.5.1, which required athletes transferring between Division I schools a second or subsequent time to sit out a year of competition before becoming eligible, unless the NCAA granted a waiver. The states argued this restrained the labor market for Division I athletes in violation of Section 1 of the Sherman Act.

**How does this connect to NIL and the right of publicity?**
In the NIL era, a year on the bench directly reduces an athlete's ability to earn name, image, and likeness compensation, which depends on visibility and playing time. The court treated the athletes' participation and NIL earning capacity as the competitive stakes, tying eligibility restrictions to concrete commercial injury in the market for athletes' services.

**Is the transfer sit-out rule still in effect?**
No. After a temporary restraining order and a preliminary injunction in December 2023, the NCAA, the Justice Department, and a coalition of states agreed to a consent judgment entered in 2024 that permanently enjoins enforcement of the multi-transfer sit-out rule. Division I athletes are now immediately eligible after transferring regardless of how many times they move.

## Authorities and sources

- *Ohio et al. v. National Collegiate Athletic Association*, No. 1:23-cv-00100 (N.D. W. Va.), NAAG multistate case page: https://www.naag.org/multistate-case/ohio-et-al-v-national-collegiate-athletic-association-ncaa-no-123-cv-00100-n-d-w-v-dec-7-2023/
- U.S. Department of Justice, "Justice Department and State Coalition Restore Competition for College Athletes at NCAA Division I Institutions": https://www.justice.gov/archives/opa/pr/justice-department-and-state-coalition-restore-competition-college-athletes-ncaa-division-i
- Department of Justice, Antitrust Division, "State of Ohio et al. v. National Collegiate Athletics Association; Proposed Final Judgment and Competitive Impact Statement," 89 Fed. Reg. 49194 (June 11, 2024), via govinfo: https://www.govinfo.gov/content/pkg/FR-2024-06-11/pdf/2024-12720.pdf
- Troutman Pepper Locke, "Transfer of Power: Federal Court Temporarily Blocks the NCAA's Transfer Eligibility Rules": https://www.troutman.com/insights/transfer-of-power-federal-court-temporarily-blocks-the-ncaas-transfer-eligibility-rules.html
- *NCAA v. Alston*, 594 U.S. 69 (2021), Supreme Court opinion: https://www.supremecourt.gov/opinions/20pdf/20-512_gfbh.pdf