August 7, 2023 – Varsity Brands Agrees to $43.5M Settlement in All-Star Cheerleading Antitrust Class Action
The claims detailed on this page have been resolved as part of a $43.5 million settlement. The official settlement website can be found at AllStarCheerAntitrustSettlement.com.
Want to stay in the loop on class actions that matter to you? Sign up for ClassAction.org’s free weekly newsletter here.
Chief United States District Judge Sheryl H. Lipman granted the plaintiffs’ motion for preliminary approval of the settlement terms on April 25, 2023. The deal, which now awaits final approval from the court, will cover a gym class—any entities that paid registration or related fees and expenses directly to Varsity Brands to participate in Varsity All Star events between May 26, 2016 and March 15, 2023—and a spectator class, defined as anyone who paid entrance (admission) or other fees directly to Varsity Brands in order to watch Varsity All Star events during that time period.
According to the settlement website, Varsity Brands has agreed to pay $43,500,000 over two years to the aforementioned classes and make certain changes to its policies designed to curb its hold over the All Star competition and apparel market. For example, Varsity Brands will not directly or indirectly pay the salaries of or provide benefits to any U.S. All Star Federation, Inc. (USASF) employees or executives, nor will any person simultaneously serve on the Varsity Brands and USASF boards. Head to FAQ 6 on the official settlement website to read the full list of Varsity Brands’ policy changes.
In order to receive a share of the settlement fund, eligible class members must submit a valid claim when the time comes. If the court approves the deal, a claim form will be created and a deadline set for claim submission. Eligible class members will be able to file a claim through the website or by email or mail. Claim forms will be mailed or emailed to members of the gym class who have valid addresses on file, but members of the spectator class must retrieve a form through the settlement website or by calling the toll-free number 1-(888)-610-6050.
Though it is still unknown how much payments will be or when they will be distributed, the gym class is set to receive 85 percent of the net settlement fund, while the spectator class will get 15 percent.
Per the website, payments will be made to members of the gym class on a pro rata basis depending on how much they spent to register their All Star teams. Alternatively, members of the spectator class who submit valid claims will receive $10 for each Varsity All Star event admission ticket paid directly to Varsity Brands between May 26, 2016 and March 15, 2023, not to exceed $200 per claimant.
If you believe you are a class member covered by the deal, there is nothing you need to do now. However, if the settlement is approved, you must submit a claim form in order to receive a share of the $43.5 million fund. Head here to sign up for updates from the settlement website so you don’t miss an important deadline.
A final approval hearing is scheduled for September 26, 2023, at which time the court will approve a plan and schedule for distributing payments to eligible class members.
Don’t miss out on settlement news like this. Sign up for ClassAction.org’s free weekly newsletter here.
July 14, 2020 – Plaintiff Tries Again with New Class Action Against Varsity Brands in Pennsylvania
Less than a week after voluntarily dropping its first lawsuit, California’s Fusion Elite All Stars, along with a Florida-based Fuel Athletics, has filed a new proposed class action alleging Varsity Brands and the U.S. All Star Federation have gained and maintained an illegal monopoly over the all-star cheerleading industry.
The new antitrust case, filed July 10 in Pennsylvania, alleges Varsity Brands, Varsity Spirit, Varsity Spirit Fashion & Supplies and U.S. All Star Federation, Inc. have over the last 15 years artificially inflated prices for apparel and entry into all-star cheerleading events through a competition-suppressing series of “intentional and methodical business maneuvers.”
July 8, 2020 – Varsity Brands Facing Another Antitrust Class Action
A Clarkston, Michigan All-Star Cheer academy has filed at least the second proposed class action alleging Varsity Brands, Varsity Spirit, Varsity Spirit Fashion & Supplies and U.S. All Star Federation have engaged in unlawful conduct to suppress competition and charge inflated prices within the All-Star Cheer competition and apparel markets.
Echoing the complaint detailed on this page, the 60-page lawsuit out of Pennsylvania federal court claims the defendants have over the last 15 years come to gain and maintain monopoly control over “every aspect” of All-Star competitive cheerleading—a “notoriously expensive sport”—by systematically buying up actual and potential rivals, weaponizing exclusionary contract terms, and utilizing their market leverage to relegate would-be challengers to “B-league status.”
“Varsity has used its dominant market power in the Relevant Markets to substantially foreclose competition in both markets and thereby maintain and enhance its dominance in both markets,” the lawsuit summarizes. “In so doing, Varsity’s Exclusionary Scheme has led to reduced output, supracompetitive prices, and reduced choice in both Relevant Markets.”
During the time period described in the suit, Varsity and its co-defendants have collectively controlled roughly 90 percent of the All-Star Cheer competition market—including all three national championship events—and approximately 80 percent of the sport’s apparel market, according to the lawsuit, which can be found here.
A California All-Star Cheer gym alleges in a lawsuit that Varsity Brands and a group of subsidiaries have violated federal antitrust laws by charging artificially inflated prices for participation in All-Star competitions and for All-Star apparel.
The 49-page lawsuit alleges the defendants—Varsity Brands, Varsity Spirit, Varsity Fashion & Supplies and U.S. All Star Federation, Inc.—have come to dominate the market for All-Star cheerleading through a continued and systematic series of acquisitions and other anticompetitive conduct.
According to the complaint, the defendants’ conduct has allowed them to acquire, maintain and enhance control over the three most important national cheerleading championships—the Cheerleading World Championships, The Summit and the U.S. Finals.
All-Star Cheer, as defined by the USA Federation for Sport Cheering, is a discipline involving two-and-a-half minute routines comprised of tumbling, stunting pyramids and dance, the lawsuit says. Notably, All-Star Cheer, with a focus on gymnastics and acrobatics, is separate and apart from traditional school cheerleading, such as that seen on the sidelines of a football game, in that an All-Star cheer team exists as a club open to all area athletes, the suit adds.
A “notoriously expensive team sport” ranging from $3,000 to $6,000 per participant, All-Star Cheer is typically facilitated through privately owned and operated companies that organize training and practices, the complaint explains. More specifically, All-Star gyms such as the plaintiff coordinate teams’ participation in competitions by paying registration fees, handling schedules and logistics, and buying All-Star apparel. Per the case, the level of athleticism required of an All-Star team makes membership highly coveted and competitive.
The lawsuit alleges, however, that Varsity Brands and its co-defendants have charged All-Star gyms such as the plaintiff thousands each year at artificially inflated prices as part of a multi-tiered scheme aimed at eliminating competition. According to the complaint, in acquiring and maintaining monopoly power over the All-Star cheer competition and apparel markets, the defendants, through an alleged “exclusionary scheme,” have sought to:
Impair and buy up actual and potential rivals who could possibly threaten Varsity’s dominance;
Impose exclusionary agreements or terms on All-Star gyms, forcing them to agree to patronize Varsity exclusively (or near exclusively) in the competition and apparel markets; and
Leverage their control of All-Star cheer’s governing bodies, including the U.S.A. Federation for Sport Cheering, by impairing actual and potential rivals to the point where they’re driven out of business or relegated to effective “B-league” status.
With regard to the “exclusionary agreements” wielded by the defendants—dubbed the “Network Agreement” and “Family Plan”—the lawsuit claims Varsity has required the largest All-Star gyms, i.e. those with the top cheerleaders and teams, to buy apparel exclusively from the defendants and to fill the limited number of events in each competition season solely with Varsity’s All-Star competitions. Further, gyms who sign with Varsity do so under the condition that they will not have to pay “penalty prices” for goods and services in the competition and apparel markets given their exclusive patronage, the complaint continues.
In all, Varsity, through a series of acquisitions, has come to dominate the All-Star cheer competition and apparel markets, the suit alleges, claiming the defendants hold roughly 90 percent of the former and 80 percent of the latter. From the complaint:
“The All-Cheer [sic] Competitions are, in part, market-dominant trade shows, and Varsityforbids or severely restricts its All-Star Apparel rivals from displaying wares in those events’ ‘showrooms.’Moreover, Varsityrewards All-Star Gyms that purchase Varsity’s All-Star Apparel for their All-Star Cheerleaders to use in Varsity’s market-dominant All-Star Competitions, withextra pointsawarded at All-Star Competitions. Given that Varsity’s competitions are the dominant events and comprise the majority of an All-Star Team’s schedule, and that it would be prohibitively expensive for most participants to purchase multiple competition uniforms for a season, Varsity’sexclusion of competing sellers of All-Star Apparel has a powerful exclusionary effect. Varsity’s conductblocks rivalsfrom both a key marketing channel which comprises the main, if not only reason, All-Star Gyms buy All-Star Apparel in the first place—for use at All-Star Competitions.”
The lawsuit looks to represent individuals and entities in the U.S. who directly paid Varsity Brands or any wholly or partially owned subsidiary for registration, entrance, or other fees and expenses for participation by an All-Star team or cheerleader in one of the defendants’ competitions, or for apparel from March 26, 2016 through until the time the “exclusionary scheme” alleged in the complaint ends.
Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s newsletterhere.