Cheerleading Giant Varsity Spirit Settles Antitrust Lawsuit for $82M

Varsity Brands, its current owner, Bain Capital, and others have agreed to pay $82.5 million to resolve a lawsuit alleging antitrust violations through overcharging for cheerleading competitions, camps, and apparel. The settlement, disclosed on May 12 in Memphis federal court, benefits consumers across 35 states who indirectly paid Varsity for cheer-related expenses between December 10, 2016, and March 31, 2024. According to the terms, the substantial settlement fund will be divided into three separate pools: 53% for competition payments, 26% for camp payments, and 21% for apparel payments. 

Varsity Spirit Agrees to $82.5M Settlement With Indirect Purchasers

Initially filed in 2020, this Varsity class action lawsuit accused the cheerleading giant and its affiliated entities of allegedly implementing a scheme to eliminate competitors from the cheerleading industry, consequently allowing Varsity to charge higher prices in violation of U.S. antitrust law. This settlement follows a $43 million agreement Varsity reached last year with gyms and other direct purchasers in a similar antitrust class action lawsuit.

The settlement agreement in the Varsity class action lawsuit involves multiple parties beyond Varsity Spirit. Bain Capital, Varsity’s current owner, and Charlesbank Capital Partners, its former owner, are also contributing to the $82.5 million settlement fund. Furthermore, company founder Jeff Webb and the U.S. All-Star Federation (USASF) have joined as defendants in the settlement.

Who Benefits From the Varsity Settlement?

This resolution addresses claims from “indirect purchasers,” i.e., parents and athletes who paid registration fees for Varsity cheer competitions or camps, or purchased cheer apparel. Class members may be eligible for compensation if they made qualifying purchases between December 10, 2016, and March 31, 2024. 

The $82.5 million Varsity lawsuit settlement was announced in advance of a scheduled July trial before Chief U.S. District Judge Sheryl Lipman. Despite agreeing to the substantial payout, all defendants have maintained their denial of any wrongdoing.

“This agreement is not an admission of any wrongdoing or liability, and we are confident that Varsity Spirit acted appropriately and in the best interest of our sport,” a Varsity spokesperson stated.

Beyond the financial compensation, the Varsity lawsuit settlement includes important structural changes. Notably, Varsity has agreed to stop basing eligibility for end-of-season championship competitions on prior participation at Varsity-owned cheer camps until at least 2029. Additionally, defendants will implement other significant changes to business practices that plaintiffs had challenged as anticompetitive for the next five years. 

Plaintiffs Allege Varsity Monopolized Cheerleading Industry

The plaintiffs in the Varsity Spirit lawsuit claimed that Varsity engaged in a systematic scheme to monopolize the cheerleading industry through multiple anti-competitive practices. At the core of these allegations is Varsity’s acquisition strategy, which involved purchasing numerous competitors—including Jam Brands in 2015, Spirit Celebrations in 2016/2017, and Epic Brands in 2018—essentially eliminating rival event producers.

Through these acquisitions, Varsity allegedly gained control over approximately 90% of the competitive cheerleading market. The complaint alleged that Varsity used this dominant position to raise prices significantly across competitions, apparel, and camps. After acquiring Spirit Celebrations, for example, registration fees reportedly increased substantially, resulting in decreased participation.

Moreover, the Varsity class action lawsuit alleged that Varsity maintained its monopoly through a strategic relationship with USASF. This relationship allegedly allowed Varsity to control which competitors could offer “bids” to prestigious championship events held at Disney World, effectively preventing meaningful competition from non-Varsity events. The plaintiffs further claim that Varsity implemented several restrictive policies, including:

• The “Stay Smart” policy, which required teams to stay at Varsity-approved hotels or face disqualification from competitions
• Preventing rival apparel makers from selling products at Varsity events
• Implementing reward programs that penalized gyms with higher prices if they didn’t purchase enough Varsity products
• Requiring gyms to report their entire cheerleading schedule to USASF

Scandals Facing the Competitive Cheerleading Industry

The $82.5 million Varsity settlement represents a significant development for thousands of families involved in competitive cheerleading across America. It also brings renewed attention to another more serious issue plaguing the cheerleading world – reports of sexual assault, grooming, and the oversexualization of youth athletes in cheerleading. 

Allegations of sexual abuse in cheerleading have become increasingly more common in recent years, with high-profile claims drawing attention to systemic failures within the sport’s governing bodies. The 2020 arrest of Jerry Harris, breakout star of Netflix’s “Cheer” series, on federal charges of child pornography, for which he later received a 12-year prison sentence, marked a pivotal moment in exposing the scope of the problem. 

Multiple federal lawsuits have also implicated major competitive cheerleading organizations, alleging that they failed to implement proper safeguards to protect athletes despite receiving reports of abuse. These reports alleging sexual abuse of minors highlight troubling parallels to other youth sports scandals, emphasizing the critical need for strengthened vetting procedures, mandatory reporting protocols, and institutional accountability to protect vulnerable athletes from harm.