In a significant development for the cheerleading industry, Varsity Brands and Fusion Elite All Stars have secured final approval from a Tennessee federal judge for their $43.5 million settlement. The lawsuit accused Varsity Brands and the U.S. All Star Federation of monopolizing the cheer competition and apparel market, and this settlement marks a substantial resolution to the case.
U.S. District Judge Sheryl H. Lipman granted final approval on Wednesday, also signing off on a $14.5 million counsel fee deemed “reasonable” by the court. The expenses incurred by the co-class counsel – Berger Montague, DiCello Levitt LLP, and Cuneo Gilbert & LaDuca LLP – totaled nearly $1.7 million. Judge Lipman noted that these costs would have escalated significantly if the litigation had progressed to summary judgment and trial, emphasizing the complexity and potential duration of the case as further justification for the settlement.
The lawsuit, initiated in mid-2020, claimed that Varsity Brands and the U.S. All Star Federation colluded to dominate the cheerleading apparel and competition market. According to Fusion Elite’s complaint, Varsity held approximately 90% of the competition market and 80% of the apparel business. The complaint accused Varsity of locking cheer gyms into exclusionary agreements that stifled competition.
Fusion Elite described how Varsity’s agreements required gyms to purchase apparel exclusively from Varsity and attend a mandated number of Varsity events each season. These events come with a hefty price tag, reportedly costing a minimum of $30,000 per event in registration fees alone. Additionally, gyms were required to be federation members and report their event attendance, further tightening Varsity’s grip on the industry.
The $43.5 million settlement fund will be disbursed in three installments, accompanied by concessions aimed at addressing Fusion Elite’s concerns. Notably, Varsity Brands will be prohibited from mandating attendance at more than three All Star events per season as a condition for receiving its lowest tier of rebates or discounts until the end of 2028. Additionally, the agreement prevents Varsity personnel from simultaneously serving on both the company’s board and the U.S. All Star Federation’s board, along with other measures to reduce entanglement between the two entities.
This isn’t the first time Varsity Brands has faced such allegations. Another lawsuit, also in Tennessee federal court under Judge Lipman, was filed by a cheer and dance company raising similar complaints. This separate suit highlighted additional financial burdens imposed on participants, including mandatory hotel stays, commuting fees, and spectator costs, all benefiting Varsity Brands.
As the cheerleading community processes this landmark settlement, it remains to be seen how these concessions will impact the broader landscape of cheer competitions and apparel. For now, the resolution of this case marks a significant step towards addressing concerns over market dominance and ensuring fairer competition in the cheerleading world.
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