cheerleading industry legal precedent Archives

By Steve Pawlyk

Published January 17, 2024

Competitive cheer has been significantly impacted by a major antitrust lawsuit, Fusion Elite All Stars, et.al. v. Varsity Brands LLC, et.al. This case, which has garnered substantial attention within the cheerleading community, involves allegations of monopolistic practices against Varsity Brands, a prominent company in the All Star Cheerleading industry. The lawsuit was brought forth by All Star gyms and All Star event spectators, accusing Varsity Brands of unfair business practices in collaboration with the US All-Star Federation (USASF).

Background of the Case

Varsity Brands, known for its influence in the cheerleading competition and apparel markets, has been accused of colluding with the USASF to monopolize the All Star Cheer Events market. The plaintiffs in the case alleged that Varsity Brands engaged in systematic acquisitions of rival event companies, imposed exclusionary contracts and loyalty programs on All Star gyms, and used the USASF to control bids to key national championships.

Settlement and Its Terms

In a significant development, Varsity Brands agreed to pay $43.5 million to settle this long-running antitrust class action. As part of the settlement, Varsity and USASF agreed to several conditions to reduce Varsity’s influence over the sport’s governing body. Notable terms include preventing Varsity board members from simultaneously serving on USASF’s board, limiting Varsity’s participation in USASF’s board and sanctioning committee, and restrictions on requiring attendance at All Star events for receiving rebates or discounts.

Implications for Competitive Cheerleading

The implications of the Fusion Elite All Stars v. Varsity Brands case for competitive cheerleading are profound and multifaceted, affecting market dynamics, governance, fairness, and legal precedent. Let’s delve deeper into each of these aspects:

1. Market Dynamics

The settlement in this antitrust lawsuit is expected to significantly alter the competitive landscape of cheerleading events. Prior to this case, Varsity Brands held a dominant position in the market, which may have limited competition and innovation. With the new terms set by the settlement:

Increased Competition: There will likely be more opportunities for new and smaller event organizers to enter the market. This could lead to a greater variety of competitions, potentially at different price points and with varied formats, benefiting teams and athletes.
Diverse Event Offerings: Teams and athletes might have access to a wider range of events, including those with different judging criteria or focusing on various aspects of cheerleading, such as stunting or choreography.
Enhanced Innovation: With increased competition, event organizers might innovate more in terms of event management, athlete experience, and audience engagement.

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2. Governance and Fairness

The case underscores the critical need for fair and transparent governance within sports organizations. As a result of the lawsuit:

Governance Reforms: The cheerleading industry might see reforms in how governing bodies like USASF operate, with a push for more democratic and transparent decision-making processes.
Athlete-Centric Policies: There could be a shift towards more athlete-centric policies, ensuring that the needs and rights of athletes are at the forefront of all decisions.
Fair Access and Opportunities: The case may lead to more equitable rules regarding team participation in events, ensuring that all teams have a fair chance to compete and succeed, regardless of their affiliation with specific organizations.

3. Legal Precedent

The settlement sets a significant legal precedent, particularly concerning antitrust issues in amateur and semi-professional sports:

Broader Implications for Sports Law: This case may influence future antitrust cases in other sports, serving as a reference point for how monopolistic practices are addressed in the sporting domain.
Empowering Smaller Entities: Smaller teams and organizations now have a precedent to reference if they face similar issues, potentially leading to more legal challenges against dominant players in various sports.
Awareness and Education: The publicity surrounding this case raises awareness among athletes, coaches, and sports administrators about antitrust laws and their applicability to the sports sector.

The Fusion Elite All Stars v. Varsity Brands case marks a turning point in the cheer industry. Its resolution not only impacts Varsity Brands and the USASF but also sets a framework for how competitive sports organizations should operate in a fair and competitive environment. As the cheerleading community adapts to these changes, it paves the way for a more equitable and dynamic future for the