Varsity Spirit

Varsity Spirit, LLC, also known as Varsity, is an American cheerleading company owned by Varsity Brands. Founded in 1974 as the Universal Cheerleaders Association, the company is a manufacturer of apparel for cheerleading and dance teams, organizer of cheerleading competitions, and operator of training camps and sanctioning bodies.

Varsity Spirit, LLC
IndustryCheerleading
Founded1974
FounderJeff Webb
HeadquartersMemphis, TN, United States
Area served
Worldwide
Key people
Bill Seely
(President)
OwnerVarsity Brands
ParentBain Capital
Websitewww.varsity.com

The company's vertical integration and monopoly status has faced criticism, including accusations of anti-competitive practices, conflicts of interest via control of governing bodies, and institutionalizing high financial costs for participation in forms of competitive cheerleading.[1][2]

History

Varsity Spirit was founded by Jeff Webb,[3] a yell leader at the University of Oklahoma contemplating law school. After working as a summer camp instructor for Lawrence "Herkie" Herkimer's National Cheerleaders Association (NCA),[4] he attempted, but failed, to acquire part of the company.[5]

In 1974, Webb established the Universal Cheerleaders Association (UCA), in an effort to raise the profile of cheerleading, initially by establishing training camps, and later through promotional campaigns and its National High School Cheerleading Championship (which was first held in 1980).[6][7] Cheerleading had seen declines in participation due to the growth of women's sports following the introduction of Title IX.[8]

Webb first operated the company out of his apartment, and only made a profit of $850 during his first year of operations. By 2002, Webb estimated that Varsity Spirit held about half of the market, and that 60% of its revenue came from apparel.[9] In 2003, Varsity backed the formation of the U.S. All Star Federation, a sanctioning body for "all-star" cheerleading competitions involving teams from private gyms.[10]

In 2004, Varsity acquired National Spirit Group, owner of the NCA (which Webb estimated to have a 25% market share in 2002),[11][9] giving it control of the sheer majority of the cheerleading industry.[12] In 2005, it acquired the Knoxville-based Athletic Championships LLC and Premier Athletics LLC.[11] In 2007, it backed the formation of USA Cheer, a non-profit led by Webb which aimed to be a sanctioning body for cheerleading (with a goal to back cheerleading as a proposed Olympic event).[10]

In 2011, Varsity Brands merged with Herff Jones, an Indianapolis-based manufacturer of class rings, caps and gowns, and yearbooks;[13][14] Webb was named president and COO in December 2012,[15] and the merged company took on the Varsity Brands name in 2014.[16] In 2012, it acquired American Cheerleader magazine from Macfadden Communications Group, with the publishers of Memphis-based teen magazine Justine producing the magazine.[17] In 2015, it acquired JAM Brands, which had been the company's main competitor in the 2010s.[5]

In 2016, Varsity Brands sued Star Athletica, a competing manufacturer of cheerleading uniforms established by The Liebe Company (which was formerly contracted with Varsity), for copyright infringement over similarities in designs between their products.[18] The Supreme Court ruled in favor of Varsity, establishing that aesthetic elements of a useful article can be protected if they are a copyrightable artistic work, and are identifiable as art when mentally separated from the practical aspects of the item.[19]

In July 2019, the company introduced a new division, "Varsity Pro", which focuses on providing apparel and services for professional cheer and dance teams, such as NBA and NFL cheerleading squads. The division's first partnership as outfitter was with the NBA's Memphis Grizzlies.[20] It also acquired SA Feather Co. and Stanbury Uniforms to expand into the band market.[21]

Market position

Varsity Spirit has been described as having a monopoly position in cheerleading in the United States, due to extensive vertical integration of apparel businesses, training camps, affiliated gyms, cheerleading competitions, and sanctioning bodies, as well as acquisitions of competitors.[10][5][2][12]

Varsity has been accused of engaging in anti-competitive practices; the company signs gyms to multi-year agreements, under which they receive rebates if they exclusively purchase apparel from the company, and participate in Varsity-run competitions.[5] Only Varsity-owned brands are allowed to exhibit and market their apparel at its events, hindering the ability for competitors to do the same. Although there are no restrictions on use of non-Varsity apparel by participants in the competitions proper,[5] in 2010 Webb testified that in at least one competition, teams received more points if they used Varsity-produced props.[12]

Varsity also has effective control of affiliated governing bodies for cheerleading.[1] The U.S. All Star Federation (USASF), a governing body for private cheer and dance squads, was formed in 2003 with financial backing by Varsity Spirit via a no-interest loan.[10] Although Varsity Spirit officially states that it does not own the USASF,[22] its board is effectively controlled by Varsity Spirit by means of six of its 15 board members, and by-laws requiring seven seats to be filled by representatives of a group of cheerleading and dance associations that are ultimately owned by Varsity Spirit. The company also pays the salary of its president, and its vice president of events and corporate alliances.[23] In 2011, the USASF threatened to ban its members from participating in Varsity-run events if they participate in competing world championships not run by the company.[10]

USA Cheer, a non-profit governing body for cheerleading, was also established by Varsity Spirit with a no-interest loan, and is staffed by six contracted Varsity Spirit employees.[10] Varsity was also involved in the establishment of the International Cheer Union.[10]

In 2020, a proposed class action lawsuit was filed against Varsity Brands, alleging that it used its "undue influence and control" over affiliated bodies to maintain its monopoly in competitive cheerleading and scholastic apparel, including requiring participation in Varsity-run training camps in order to attend its competitions, participation in its insurance plans, and the aforementioned rebate program, which institutionalized financial costs for participation in competitive cheerleading. Varsity responded to the suit, arguing that they "welcome the kind of competition that enhances the cheer marketplace", and accused competitors of "seeking to chill that marketplace through the Courts. We are contesting this flawed diversion from an otherwise dynamic industry with energy, resources and determination."[24]

Classification of cheerleading as a sport

Varsity Spirit and its affiliates have lobbied against proposals for cheerleading to be sanctioned as a sport, including proposals by California and Texas's University Interscholastic League (UIL), arguing that this would result in increased oversight and regulation that would be detrimental to its business and self-oversight.[12] In 2015, the UIL announced a pilot "Spirit Championship", and that it would "partner with Varsity Brands to provide and train judges for the contest."[10]

In 2010, Webb was called upon as an expert witness in a Title IX case involving Quinnipiac University, which had redirected money out of women's sports to its all-girls cheerleading team under the argument that it was a sport.[25] In his testimony, Webb stated that he did not consider cheerleading to be a sport, as he primarily considered Varsity's competitions to be a promotion for its lines of business.[12] A federal judge held that cheerleading "does not qualify as a varsity sport for the purposes of Title IX".[26][12]

Sexual misconduct

In September 2020, USA Today published a report accusing governing bodies tied to Varsity Spirit of allowing 180 individuals (including coaches, choreographers, and others) indicted for child sexual abuse — 140 of whom having been convicted — to continue participating in activities. It found that their list of blacklisted individuals only contained 21 people, and was only amended and expanded following reports made by the paper.[23]

References
  1. "Cheerleaders". Penn & Teller: Bullshit!. Season 8. Episode 1. July 10, 2010. Showtime.
  2. "Cheerleading may not be a sport, but it is an industry". Christian Science Monitor. 2010-07-22. ISSN 0882-7729. Retrieved 2020-09-30.
  3. "Industry Profile: Jeff Webb of Varsity Brands, Inc". Cheercoachmagazine.com. 2006-05-01. Retrieved 2010-07-27.
  4. "NCC Nationals: Continuing a rich tradition". Philstar.com. 23 February 2015. Retrieved 6 August 2015.
  5. Buchanan, Leigh (2016-02-22). "Meet Rebel, the $20 Million Cheerleading Startup Living Up to Its Name". Inc.com. Retrieved 2020-09-30.
  6. Michael Sheffield (19 June 2015). "Top 100: Varsity squad leader Jeff Webb rallies billion-dollar spirit brands". Memphis Business News. American City Business Journals. Retrieved 6 August 2015.
  7. Elliott, Stuart (2007-06-11). "Marketers Are Joining the Varsity". The New York Times. ISSN 0362-4331. Retrieved 2020-09-30.
  8. Schultz, Jaime. "Cheerleading's peculiar path to potential Olympic sport". The Conversation. Retrieved 2020-09-30.
  9. Brady, Erik (2002-04-26). "From megaphones to mega-profits". USA Today. Retrieved 2020-09-30.
  10. "CHEER EMPIRE: A for-profit company built competitive cheer, pays people who make its rules". The Commercial Appeal. Gannett. Retrieved 2020-09-30.
  11. "Varsity Brands acquires Athletic Championships and Premier Athletics". Memphis Business News. 2005-07-06. Retrieved 2020-09-30.
  12. Reigstad, Leif (2015-07-21). "Varsity Brands Owns Cheerleading and Fights to Keep it From Becoming an Official Sport". Houston Press. Retrieved 2020-09-30.
  13. Hirsch, Lauren (2018-06-19). "Bain to acquire Varsity Brands, a top maker of cheerleader uniforms and school spirit items, for roughly $2.5 billion". CNBC. Retrieved 2020-09-30.
  14. "Rebranding spreads Varsity name around". Memphis Business News. American City Business Journals. 2014-06-03. Retrieved 2020-09-30.
  15. Michael Sheffield (11 December 2012). "Jeff Webb Named President, COO of Herff Jones". Memphis Business News. Retrieved 6 August 2015.
  16. "Rebranding spreads Varsity name around". Memphis Business News. American City Business Journals. 2014-06-03. Retrieved 2020-09-30.
  17. Ioanna Opidee (26 January 2012). "American Cheerleader Sold to Varsity Spirit Corp". Folio Magazine. Retrieved 6 August 2015.
  18. Smith, Erin Geiger (2016-10-31). "Who Owns Cheerleader Uniform Designs? It's up to the Supreme Court". The New York Times. Retrieved 2018-07-15.
  19. "Star Athletica, L.L.C. v. Varsity Brands, Inc". Harvard Law Review. 2017-11-04. Retrieved 2018-07-16.
  20. "Varsity Spirit launches new brand for pro teams". Memphis Business News. 2019-07-17. Retrieved 2020-09-30.
  21. "Varsity Spirit adds to squad, buys two companies". Memphis Business News. Retrieved 2020-09-30.
  22. "Varsity Spirit FAQ". Varsity.com. Retrieved 2020-09-30.
  23. "Cheerleading has a list of people banned from the sport. It was missing 74 convicted sex offenders". USA Today. Gannett. Retrieved 2020-09-30.
  24. "Federal lawsuit aims to break up alleged Varsity monopoly in cheerleading business". Memphis Business Journal. 2020-07-29. Retrieved 2020-10-01.
  25. Bill Cloutier (23 June 2010). "Quinnipiac trial: Legitimacy of cheerleading as sport focus of plaintiffs". New Haven Register News. Retrieved 6 August 2015.
  26. Goldman, Russell (2010-06-21). "Federal Judge: Cheerleading Is Not a Sport". ABC News. Retrieved 2020-09-30.
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