Ratings agency Moody's revised the NCAA's credit outlook to negative Monday as a lawsuit against college sports' governing body proceeds in federal court.

The report marked the first time that litigation has emerged as a risk in a Moody's report for NCAA debt. A federal judge in Oakland is weighing a class-action certification for the suit, launched by former UCLA basketball star Ed O'Bannon in 2009, that would add potentially thousands more current and former athletes to the case and expose to the NCAA to greater damages...