Complaint to the FTCpdf
Complaint to the FTCpdf
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  1. Good Morning Ms. Feinstein,I apologize for my jumbled message but I am glad that you were able to at least decipher that I needed your email!I was contacted by a Mr. Chelini, an attorney from the Justice Dept., a few days ago and he advised me to get in touch with your office regarding this matter.He gave me your name specifically and said to forward you my complaint as it may be of help and/or interest to your office.I am sure you are busy and one of your staff members Alan Friedman has already contacted me saying my email toantitrust@ftc.govwas forward to the FTC staff for review.I am copying my complaint here as well just asa follow through.I appreciate your time.•What are the names of companies, individuals, or organizations that are involved?Varsity Brands, Inc., Jam Brands Inc., and The Unites States All-Star Federation•How do you believe they have violated the federal antitrust laws? (For details on federal antitrust laws, seeAntitrust Laws and You.)As the largest corporations in the multi-billion dollar Cheerleading/Dance Industry, I believe that their merger will be a violation of the Clayton Act.Both companies already have a majority foothold in the industry, with Varsityand Jam Brands controlling the board of the non-profit United States All-star Federation.Varsity is also the largest company in the spirit industry.Varsity’s closest competitor was Jam Brands and Varsity was already several times the size of Jam Brands.•Can you give examples of the conduct that you believe violates the antitrust laws? If so, please provide as much detail as possible.Over the past several years, Varsity Inc. has been purchasing other event producers, uniform manufacturers, camp instructional companies, and other industry related companies.As they saw a company rise up and do something good, they bought them out.This has been going on for more than 20 years and with this last purchase of Jam Brands, there is no one even close to be considered a rival to Varsity Inc.Here is a list of Event producing companies that Varsity has purchased in recent memory:Jam Brands Inc.•National Cheerleaders Association•United Spirit Association•National Dance Alliance•American Cheerleaders Association•Athletic Championships•The American Championships•All Star Challenge•American Cheer Power•World Spirit Federation•Spirit Sports•Spirit Xpress•Spirit Cheer•The Summit•Cheerlebrity•Spirit Fest
  2. •One Up•PacWest•CHEERSPORT•Cheer Ltd.Here is a list of uniform manufacturing companies that Varsity has purchased in recent memory:Spirit InnovationsJust BriefsVaristy Inc. has essentially been purchasing the companies that would be their competitors and putting them under their brand.This is all compounded with the fact that Varsity was also one of the founding members of the United States All-Star Federation.(The federation is a non-profit that acts as the governing body for all-star cheerleading and all-star dance.)The federation was started with a $1,000,000 loan from Varsity Inc..The federation has since paid off that loan but Varsity still has a stranglehold on the federation.They have it written in to the charter of the organization that a member of the founding companies will always have a seat on the board. (Think about the UN security council.It is essentially like that.)So not only is Varsity Inc. removing their competitors from the market allowing for them to control the industry as they see fit, they also control the governing body which allows them carte blanche to do as they please regardless of the effect on everyone else involved.•What is the product or service affected by this conduct? Where is the product manufactured or sold, or where is the service provided?The products affected are cheer and dance uniforms, cheer and dance competitions, and cheer and dance instructional camps.All of these examples are available throughout the U.S. and if the acquisition of Jam Brands takes place, they will then be available in several other countries as well.•Who are the major competitors that sell the product or provide the service?Jam Brands was the second largest company in the all-star cheer industry. Now that they are a part of Varsity Inc., the next largest would be Epic Brands in my estimation.There are several other cheerleading/dance event producers and a few other uniform producersas well.All of those 100 or so other companies combined are still not significant fraction of what Varsity is.They are a more than billion dollar a year company that is competing against companies that make anywhere from $5,000,000 to $5,000 per year.There is no competitor for Varsity Inc. in this industry.•What is your role in the situation in question?I am a former athlete, coach, gym-owner, event producer, and also a parent in this industry.I am also a former employee of Varsity Brands Inc. along with thousands of others that started their career with them.(Working as an instructor at Varsity Summer Camps is the equivalent of working at McDonald’s as a starting job in the industry.)As an event producer in the industry, the merger affects memore on how the United States All-Star Federation is now being run almost completely by one company.The federation is our governing body and it is now essentially being taken over by one very powerful and rich
  3. company as they hold a monopoly on what happens in the industry due to their seats on the board of directors.•Who is harmed by the alleged violations? How are they harmed?Due to the stranglehold Varsity has on the industry, all parties involved will suffer.Cheerleading uniform prices have gone through the roof due to Varsity forcing their company on to unsuspecting gym owners.(Many people know the Varsity brand and don’t even know other companies exist.Varsity will charge thousands more than others for essentially the same thing.)Competition costs are so high that many athletes have to quit the sport due to the cost. (Competitions and Uniforms are the largest fees any athlete pays in respect to being on a team.)Smaller event producers are essentially pushed aside due to the foothold Varsity has in venues as well as their access to coaches and gym owners and their ability to offer them thousands of dollars to attend their events.Varsity has been gobbling up other successful event producers for the past several years.Jam Brands was the last hold-out and now that they have been purchased by Varsity Inc., every other uniform company and event producer is going to suffer due to this merger.This will mean that Varsity holds more than 80% or more of the industry.This hurts individual athletes as well as other spirit companies and it stifles competition in a big way.
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