A 2020 antitrust case filed in the Western District of Tennessee by parents of competitive cheerleaders alleged that Varsity Brands LLC, acting in concert with other associated entities and individuals, “conspired to raise, fix, and stabilize the prices charged associated with Competitive Cheer.” In 2018, Bain Capital Private Equity purchased Varsity Brands, LLC. The complaint alleges that Bain Capital’s funding “enhance[d], extend[ed], and ensure[d] Varsity Brands’ monopoly power and obtained financial rewards and benefits from having done so[.]” Based on expert reports submitted with plaintiffs’ recent motion for class certification, plaintiffs may claim up to 27% overcharges that have been passed onto competitive cheer participants and their families in connection with alleged antitrust violations.
What is Competitive Cheer?
For the uninitiated, “competitive cheer” refers to the competitive sport of cheerleading in which cheering is the main event. In competitive cheer, teams typically produce 2 minute and 30 second dance and gymnastics routines set to music and are scored competitively against one another. Sideline cheer, by contrast, is the type of cheerleading that sports fans may be familiar with at football or basketball games. In the sideline cheer context, the cheerleaders support another sport’s athletes through supportive chants while also performing gymnastics and coordinated dance routines. Since the early aughts, competitive cheer has become increasingly popular, and nearly one million participants compete in the sport every year.
Market Competition and Price-Fixing
The anti-trust complaint against Varsity Brands and its affiliates centers around cheer athletes who participated in competitive cheer from 2016 to present, potentially through school cheerleading teams, but who indirectly paid Varsity for competitions, camps, related lodging, fees, equipment and costumes. The complaint alleges that Varsity controls “70% of the School Cheer Competition Market.” The alleged price-fixing outlined in the complaint included these and other costs associated with competitive cheer, including school cheer. According to the complaint, “[a] single season [of competitive cheer] costs between $3,000 and $7,000 per team member. These prices can rise to $20,000 per family, including costs[.]”
Plaintiffs Move for Class Certification
On Feb.10, 2023, the plaintiffs moved for class certification, alleging that plaintiffs can establish that the impacted parents of cheer athletes can show sufficient “numerosity, commonality, typicality, and adequacy of representation” in order to proceed as a class action. In plain terms, this means that the plaintiffs must show that an identifiable group comprised of more than 40 members were allegedly impacted by defendants’ actions. In order to show “adequate representation,” plaintiffs must also show that the damages of “class representatives” (named individuals who represent the “class” as a whole) are typical of the other potential members of the class. Plaintiffs must also demonstrate that common questions raised in the lawsuit predominate over individual questions, and that a class action is superior to alternative methods of adjudication.
Plaintiffs’ motion is supported by several expert reports, including those drafted by economist Dr. Janet Netz, Ph.D, and economic consultants Dr. Randal Heeb, Ph.D. and Dr. Jen Maki, Ph.D. Drs. Heeb and Maki used mathematical models in an attempt to demonstrate how common evidence could be used to construct a damages model in the case. What remains to be seen is how the Western District of Tennessee will rule on plaintiffs’ motion for class certification.
While the ultimate disposition of the case could be years away, the future of competitive cheer may hang in the balance. Attorneys in KJK’s Student and Athlete Defense practice group will continue to follow the development of this and other cases that impact student athletics. For more information or to discuss further, please contact Susan Stone (SCS@kjk.com; 216.736.7220), Kristina Supler (KWS@kjk.com; 216.736.7217), or Anna Bullock (AEB@kjk.com; 216.736.7223)