Varsity Brands, a major player in cheerleading equipment and apparel, has agreed to a $43.5 million settlement in response to an antitrust class action lawsuit brought by California-based Fusion Elite All Stars. The lawsuit, initially filed in California federal court in May 2020 before being transferred to Tennessee, accused Varsity Brands and the U.S. All Star Federation Inc. (USASF) of monopolizing the cheer competition and apparel markets.
The settlement, filed in Tennessee federal court, involves cash payments from Varsity Brands, Varsity Spirit, and Varsity Spirit Fashion totaling $43.5 million. Additionally, Varsity Brands and USASF have agreed to significant prospective relief measures aimed at addressing some of the alleged anti-competitive practices cited in the lawsuit.
Fusion Elite All Stars accused Varsity of controlling approximately 90% of the competition market and 80% of the apparel market in the U.S. They claimed Varsity achieved this dominance through exclusionary agreements with major cheerleading gyms and by leveraging its influence over the governing bodies of the cheer industry.
Fusion highlighted agreements that required gyms to purchase Varsity apparel and attend numerous Varsity-owned events, with registration fees for these events reaching at least $30,000 per event. Additionally, all star gyms were reportedly required to be USASF members and report their competition attendance to USASF.
Eric Cramer, attorney for Fusion Elite, stated, “We are pleased to have resolved this long-running antitrust class action for the benefit of the classes of All Star Gyms and Spectators that we represent.” He emphasized that the settlement provides substantial monetary recovery and addresses key anti-competitive practices.
Varsity’s spokesperson, Susan Crumpton, stated that Varsity admits no wrongdoing or liability under the settlement terms. She noted that, pending court approval, a portion of the settlement proceeds would be allocated to gym owners for facility investments.
This isn’t Varsity Brands’ first involvement in antitrust litigation. Earlier this month, a Tennessee federal judge dismissed a proposed class action lawsuit involving multiple cheerleading apparel and equipment companies due to discovery violations by the plaintiffs.
Additionally, Varsity is involved in another significant antitrust lawsuit with indirect consumers who claim the company’s practices have led to higher prices for cheerleading apparel and competitions. This lawsuit highlights the broader impact of Varsity’s market dominance on consumers.
Varsity Brands has faced several other legal battles recently. This class action lawsuit filed by multiple cheerleading gyms alleges unfair business practices and excessive control over the competitive cheerleading market. Moreover, Varsity is dealing with an $82.5 million settlement in another antitrust case and is addressing a separate sex abuse settlement. These issues continue to shape the legal landscape for the company and the cheerleading industry as a whole.
The settlement represents a significant step towards fostering a more competitive environment in the cheerleading industry. The changes brought by this agreement, along with addressing other legal challenges, could lead to a more open market for gyms, athletes, and fans.
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