Varsity Brands, the Bain Capital-owned cheerleading company, has agreed to settle one of the three federal antitrust lawsuits that have been filed against it.
On Tuesday, lawyers representing a group of competitive club cheerleading gyms and Varsity filed a joint notice in the case, Fusion Elite All Stars v. Varsity Brands, informing the judge that they are in the process of preparing a settlement agreement they will submit to the court.
“While we are confident Varsity Spirit has always acted appropriately and with the best intentions, reaching this mutual agreement is a positive outcome for everyone involved,” Varsity Spirit president Bill Seely wrote in a message to his employees, which was provided to Sportico. “It allows gym owners, cheerleaders, families, and each of you to focus on what matters most—our sport.”
Seely indicated that Varsity’s decision to reach a settlement was motivated, in part, by the “momentum” that came from the USOPC recently recognizing USA Cheer, the Varsity-backed national governing body, as well as the NCAA’s decision to grant the cheerleading spin-off sport STUNT emerging status at the Division II level.
The proposed terms of the settlement were not disclosed in the filing, and lawyers representing Varsity and the plaintiffs did not respond to emails seeking comment prior to publication.
The lawsuit, filed in August 2020, accused Varsity, its affiliated companies and the U.S. All Star Federation, a Varsity-created governing body, of having colluded on an “exclusionary scheme” that stifled industry competition and ultimately violated the Sherman Antitrust Act.
The plaintiffs, which were seeking class certification, alleged that Varsity maintained a monopoly over the cheer market by first snatching up rivals and then forcing all-star gyms to exclusively patronize Varsity apparel and competitions.
Specifically, the lawsuit took aim at the contracts, such as “Network Agreements,” that Varsity signed with the bigger all-star gyms, which were “required to commit to near exclusive attendance at All-Star Competitions and completely exclusive patronage by the Gyms and their Team members of All-Star Apparel.”
The litigation initially sought to tie the alleged monopolistic practices of Varsity with the growing sex-abuse scandal in the sport, which Varsity vehemently denied. The case was scheduled to go to a jury trial in early 2024.
Varsity is still a defendant in two other antitrust cases—one on behalf of cheerleading event producers and the other on behalf of customers—and in a dozen sex-abuse lawsuits. It is unclear to what extent the resolution in Fusion Elite v. Varsity will affect the other antitrust cases, which are also seeking class-action status.
(This story has updated the headline and added the case name Fusion Elite All Stars v. Varsity Brands in the second paragraph.)