Class Action Settlement Reached in Cheerleading Monopoly

Bain Capital, Varsity Brands and its former owners have agreed to a substantial settlement in the cheerleading monopoly case. The agreement, amounting to $82.5 million, aims to resolve a class action lawsuit filed on behalf of cheerleading consumers who accused the defendants of having a monopoly or conspiring to monopolize various markets within the industry, including competitions, camps and apparel.

According to court filings this week, plaintiffs’ attorneys are set to receive a third of the settlement, totaling $27.5 million, along with $9.2 million in litigation costs. This settlement marks a significant milestone in a legal saga that dates back to 2020 when the initial lawsuit, Jessica Jones, et al., v. Varsity Brands, LLC, et al., was filed.

The proposed settlement was presented to the federal judge overseeing the case on Monday, nearly a year after Varsity Brands agreed to a $43.5 million settlement in another antitrust suit brought by a proposed class of rival all-star cheerleading gyms. This previous settlement, ratified by the court in October, underscores the broader legal challenges facing the cheerleading industry regarding competition practices.

The agreement reached in Jessica Jones, et al., v. Varsity Brands, LLC, et al., was finalized following a third round of mediation last month. Notably, Bain Capital, which acquired Varsity Brands in 2018 for $2.5 billion, is reportedly exploring options to divest its ownership stake in Varsity Brands, potentially through a public offering. The settlement includes not only Bain Capital but also Varsity’s former owners, Charlesbank Capital Partners and company founder Jeff Webb, as well as the U.S. All-Star Federation (USASF), a key entity in the cheerleading community.

Responding to the settlement, a spokesperson for Varsity expressed satisfaction, stating, “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.” The spokesperson’s statement underscores the company’s stance on the matter and its commitment to the cheerleading community.

Source: Sportico