On Tuesday, June 18, 2024, a Federal Court in Tennessee approved an $82.5 million dollar settlement in an antitrust action brought by parents of school-aged cheerleaders against Varsity Brands, LLC and other defendants.
The lawsuit began in 2020 when these parents filed suit against Varsity Brands and the other defendants. In their complaint, the parents allege that the defendants established a monopoly in the competitive cheerleading market, including the holding and organization of cheerleading competitions and camps, as well as the sale of apparel and other goods. The parents further allege that the defendants established a program that foreclosed competition in camps, requiring that cheerleaders attend a Varsity Brands run camp in order to be eligible to compete in national championships. Among other things, the parents assert that Varsity Brands established exclusive dealing arrangements that leveraged its market power to foreclose competition, that it funneled cheer teams to pre-selected (and more expensive) hotels and accommodations during events, and that it colluded with other defendants to engage in counterprogramming to eliminate or diminish events owned by competitors. As a result of the alleged monopoly, the parents claim that they endured inflated prices of goods and services, including enrollment in cheer competitions and the purchase of related goods and apparel. These parents further claim violation of anti-trust law and consumer protection statutes in nearly 30 states.
After a lengthy period of litigation, including heated discovery and motion practice, the parties were able to come to a settlement of the matter. The parents sought approval of the settlement agreement in the U.S. District Court of Tennessee, Western Division last month. On June 18, 2024, the court granted preliminary approval of the settlement agreement, which requires Varsity Brands and the other defendants to pay $82.5 million to these parents and take certain remedial action to diminish its alleged monopoly and influence in the cheerleading market.