As the private equity firm apparently considers outsourcing its prosperous but contentious cheerleading business, Bain Capital and Varsity Spirit continue to avoid legal action.
Jones et al v. Bain Capital Secret Equity et al, the parties to an antitrust complaint, announced earlier this month that they had reached an “agreement in principle” and planned to have it formalized by Sunday. The other defendants in the case, which was set to go to trial in July, include: Varsity creator Jeff Webb, the agency’s past owner, Charlesbank Capital Partners, and the U. S. All- Star Federation ( USASF), the governing body that was originally founded and seeded by Varsity. As of now, the terms of the colony, and to what extent it is likely to affect the dynamic praise market, are not known. Actually filed in December 2020, the course- actions match asked the court for triple damages, the disgorgement of “unjust enrichment” and injunctive relief.

The plaintiffs ‘ prosecutors did not respond to a request for comment.
A Varsity Spirit director stated in a speech to Sportico that” we are pleased to have reached an agreement in principle to overcome this prosecution.” We are convinced that Varsity Spirit acted correctly and in the best interest of our game because the lawsuit does not constitute an admission of any wrong or responsibility.
The outcome of this most recent lawsuit could determine whether Bain will sell Varsity at some point, either by releasing it to the public or by selling it. With a$ 6 billion valuation inclusive of company debt, Bain was actively exploring both options for Varsity Brands in November, according to Reuters ‘ report from November. Reuters reported that Bain had been conducting interviews with investment banks to help with a deal. When reached by Sportico, a Bain spokesperson declined to comment.
Bain originally purchased Varsity Brands—which includes both Varsity Spirit and BSN Sports, a team clothing and equipment maker—in 2018 from Charlesbank, the middle- market private investment firm, for$ 2.5 billion. That cost was one billion more than Charlesbank had paid Varsity for four years prior.
Varsity Spirit has repeatedly been the subject of controversy and litigation since Bain’s purchase, with plaintiffs alleging that it runs an illegal cartel and fosters a culture of sexual abuse and cover-up in club cheerleading. The litigation’s swarm of lawsuits over the past five years gave Varsity fans their first real hope that the organization they thought was responsible for club cheerleading’s problems would finally receive their fair share of the blame. None of the lawsuits have so far, though.
Varsity released its release from lawsuits filed by at least 21 people all over the country who allege that their cheer coaches sexually abused them, even while some of them were minors. The terms of those settlements were kept secret and are not anticipated to be made public.

The Jones case, meanwhile, was one of three antitrust cases that had been brought in 2020 against the so- called” Varsity defendants”. Varsity settled for$ 43.5 million with a group of plaintiffs representing all-star cheerleading gyms in March 2023. Varsity agreed to take several steps to remove its influence from the USASF as part of the resolution of Fusion Elite All Stars, et al v. Varsity Brands LLC, et al.
U. S. District Judge Sheryl Lipman presided over the antitrust trio in the federal courthouse in Memphis, Tenn., where Varsity is headquartered. For a while, the three cases shared discovery and witnesses. Around the same time the Fusion Elite case was settling, Lipman dismissed a second of the antitrust cases, American Spirit and Cheer Essentials, Inc. et al v. Varsity Brands, LLC et al, on procedural grounds.
Later, Robert Falanga, the attorney who represented the American Spirit plaintiffs, informed Sportico that his clients planned to file an appeal against Varsity’s dismissal and to continue pursuing antitrust claims. Falanga even attempted to inform the court of his clients ‘ intentions to appeal, but they decided against doing so after the defendants sought to pay the plaintiffs ‘ court costs. Falanga passed away in January.
In the Jones case, a group of “indirect purchasers” accused Webb, Charlesbank, Varsity Brands, Bain, and the USASF of conspiring to create an illegal monopoly in the competitive cheer market to benefit cheer athletes and their parents, and ended up earning Varsity hundreds of millions of dollars in” supracompetitive illegal profits.” Judge Lipman rejected the indirect purchasers ‘ claims for injunctive and declaratory relief under the Sherman Act in August 2022, but he denied their unjust enrichment claim.
The defendants had requested that a number of crucial pleadings in the Jones case be filed under seal, including the plaintiffs ‘ class certification brief and the defendants ‘ briefs in support of their motions to dismiss. The court released a trove of documents last month after the parties negotiated a protocol for reviewing the motions in question.
Varsity and Bain are undoubtedly not yet completely out of the litigation limbo.
It is argued that the most pressing legal issue facing the organization right now is with its insurance companies regarding who will ultimately be responsible for paying the costs of the sex-abuse cases ‘ legal fees and settlements. In September, Arch Insurance filed a “reformation action” asking a federal judge to correct what it claimed was a “mistakenly truncated” policy for Varsity that dealt with “abuse and molestation” limitations. Varsity, in turn, sued Arch in Delaware state court.
In a declaratory action filed last month, three additional Varsity insurers, including Westchester Fire Insurance, Berkshire Hathaway Specialty Insurance, and Evans Insurance Company, asked the court to determine their complicity in providing coverage for the sex abuse claims. The other insurers contend that the sex-abuse lawsuits fall outside the scope of the general liability policies they issued to Varsity, just like with Arch.
Varsity is also dealing with a serious antitrust case.
Varsity’s request to dismiss a lawsuit brought by a rival cheerleading event producer, Open Cheer and Dance LLC, was denied in March by a Texas federal court. Through a group boycott and other “anticompetitive and tortious tactics,” Varsity is accused of conspiring with three sanctioning bodies it helped found, including USASF, USA Cheer, and the International Cheer Union ( ICU). Webb has been in charge of the ICU since its founding, and he is currently in charge of that position.
Webb, who formally quit Varsity in late 2020, currently sits as an independent director on the board of LuxUrban Hotels Inc., a company that leases hotels and suites in Los Angeles, Miami, New York, and New Orleans. ( Webb did not respond to a request for comment. ) Leonard Toboroff, the one- time vice chair of Varsity Brands, also serves as an independent director of LuxUrban.
Two of the key individuals figures The Open Championships are Heidi Weber, owner of American Spirit and Cheer Essentials, and David Owens, owner of Rockstar Championships, which was also a named plaintiff in the American Spirit suit.
In addition, the USASF is suing Owens, Owens, and three other event officials for federal trademark infringement over the name of the organization’s annual Allstar World Championship in Orlando. Last week, the most recent version of that event took place.
The USASF has a federal registration for the trademark” The Cheerleading Worlds,” which Varsity Spirit first obtained in 2003. The governing body has argued that the use of the word “world” in its Orlando event is “likely to confuse consumers,” and it is suing for damages in the tens of millions of dollars. June is the trial date for that case.