In January 2026, a federal jury in the U.S. District Court for the Northern District of California found competitive swimming’s international governing body, World Aquatics (AQUA), liable for orchestrating an illegal group boycott under the Sherman Act. The jury found that World Aquatics (formerly the Fédération Internationale de Natation, FINA) had used its exclusive authoritative powers to stifle the rise of a rival, the International Swimming League (ISL). The jury’s assessment of the actual financial damage inflicted on the ISL? A mere $1.00.

‍Can a $1 verdict truly change sports governance?

At first glance, this nominal payout seems more like a slap on the wrist, letting Swiss-based AQUA off the hook while denying the ISL the $41 million it sought in lost profits. However, it’s important to look beyond the monetary damages to the broader significance of this case for the structure of sports governance as a whole. In fact, this verdict, combined with a concurrent $4.6 million class action settlement with the ISL’s elite swimmers, represented a continued erosion of the legal shield that international sports governing bodies (SGBs) had hidden behind for decades: the so-called "sporting exception".

What was the sporting exception supposed to protect?

The sporting exception was a legal principle that acknowledged the unique structure of sports governance, the societal value of athletics, and the necessity of regulations that sometimes deviated from competition law in the interest of preserving athlete safety and fair play. Codified in European jurisprudence through Court of Justice of the European Union (CJEU) decisions such as Meca-Medina, and also reflected in Article 165 of the Treaty on the Functioning of the European Union (TFEU), the sporting exception recognized that rules strictly inherent to the integrity of the sport, athlete safety, or fair play could fall outside the prohibition of anticompetitive agreements.

In theory, the exception was meant to protect basic regulatory functions. Yet in practice, SGBs used the sporting exception as a way of maintaining dominance over their sport, stifling alternatives for athletes and dampening creative competition. Over the years, SGBs such as FIFA, the IOC, the International Skating Union (ISU), and World Aquatics (AQUA) claimed the exclusive prerogative not just to enforce the rules of the game, but to control broadcasting rights, cap athlete compensation, or veto any alternative leagues attempting to organize competitions.

In 2023, however, that power began to splinter at the highest levels of global sports. The legal groundwork was definitively laid in the CJEU's landmark 2023 rulings in European Super League Company, International Skating Union v. Commission, and Royal Antwerp Football Club alongside the U.S. Supreme Court’s unanimous decision in NCAA v. Alston. Together, those cases severely limited the sporting exception and established a firm judicial principle. SGBs could not wield discretionary, unconstrained sanctioning powers to protect their own commercial monopolies under the guise of "protecting the sport."

Why swimming?

Yet those court battles involved either lucrative, high-profile sports such as soccer, collegiate sports empires, or winter sports circuits. No one expected competitive swimming to become the next major legal battleground. Unlike European soccer or American basketball, competitive swimming is not a commercial goldmine. Swimmers routinely log grueling hours in the pool for minimal prize money, relying on modest national federation stipends and limited sponsorships to pursue their passion. Because the sport lacked major broadcast revenues, it was the last place anyone anticipated an antitrust showdown.

This economic reality gave AQUA an essentially unchallenged monopoly. As the self-proclaimed "sole and exclusive" authority governing six aquatic disciplines across more than 200 nations, it ran an uncontested monopsony over the athletes and national federations in its purview.

Then came the International Swimming League in 2017. Created by Ukrainian billionaire and swimming enthusiast Konstantin Grigorishin, the ISL introduced a novel concept: a mixed nation, team-based global swimming circuit offering elite swimmers guaranteed contracts and meaningful prize money. For swimmers accustomed to earning a fraction of what other professional athletes make, the ISL’s offer was irresistible.

AQUA’s initial response was not to offer better compensation, but rather to act swiftly to crush the competition. It first warned any ISL-contracted swimmers that participating in unauthorized meets would ban them from the 2019 World Championships. It also issued directives to more than 250 member federations, invoking the now-amended FINA General Rule 4 to compel a coordinated worldwide boycott of the ISL.

Rather than back down, the swimmers and the ISL took Swiss-based AQUA to court. After several years of battles, the resolution finally landed in late 2025 and early 2026. First, AQUA settled the swimmers’ class action lawsuit in October 2025 for $4.6 million. As part of the settlement, AQUA was prohibited from enacting any rules or maintaining policies that restrict the organization of alternative swimming events or limit the ability of athletes to seek compensation from these events. In January 2026, the court delivered its own unambiguous legal finding. AQUA’s coordinated boycott was determined to be an unlawful, anticompetitive move designed to protect its monopoly and commercial interests. By applying the Sherman Act to an Olympic discipline with modest commercial margins, the court demonstrated that no corner of sports governance remains immune from antitrust enforcement.

Who really bears the risk?

It is true that $1 nominal damages award highlights a continued compliance barrier. By escaping a crippling financial payout, AQUA emerged almost unscathed financially beyond the payout to the swimmers, thus preserving its dominant market position and financial reserves. For future commercial innovators in low-revenue sports, the verdict illustrated the steep cost of entry and the necessity of major financial reserves required to hold their own.

Still, the legal line in the sand has been drawn. The transformation of sports governance and the erosion of the sporting exception didn't stop with the Super League or the NCAA. The International Swimming League case proves that courts will hold governing bodies accountable, whether an industry generates significant revenue or not. Sports federations that continue to weaponize their control over athlete eligibility and their ability to authorize official events in order to protect their dominance will risk being challenged in court as opposed to preserving their regulatory powers.

Moving forward, federations need to continue to realign their sports governance standards. This includes increased transparency, a clear separation between legitimate athletic rules and commercial self-interest, and genuine cooperation with teams and athletes. With an adaptive, compliance-driven mindset, the future of sports governance looks significantly brighter.

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