#32 Is There Choice in Cheer? Considering Market Competition in Competitive Cheering
Mar 9, 2020
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Matt Stoller, author of "Goliath," dives into the competitive cheer industry, noting its rapid growth and the potential monopolistic grip of major players like Varsity Brands. He discusses how high costs and safety concerns plague participants, revealing the broader implications of antitrust issues hidden in unexpected fields. The conversation also touches on the relationship between democracy and market competition, alongside personal anecdotes that bring humor to serious topics. Tune in for a fresh perspective on competition law!
The cheerleading industry is heavily affected by monopolistic practices, particularly by Varsity Brands, limiting competition and increasing costs for participants.
Safety concerns for young cheerleaders are heightened by centralized control, emphasizing the need for robust governing bodies to establish and maintain standards.
Deep dives
The Importance of Understanding Cheerleading as a Market
Understanding the cheerleading industry is crucial for its participants, especially children, due to safety concerns associated with cheer. The podcast highlights the role of governing bodies in maintaining safety standards and how control by a single entity can lead to potential risks. The special focus on the cheer market illustrates broader implications on how monopolistic behaviors can affect not only the sport itself but also the well-being of youthful participants. Addressing these issues can shed light on critical aspects of competition law and its relevance in various sectors.
Competition and Monopolistic Practices in Cheer
The cheer industry is marked by monopolistic practices, particularly by Varsity Brands, which dominates the majority of competitions and apparel sales. Varsity's acquisitions through mergers, including its purchase of Jam Brands, have led to its control of approximately 90% of cheer events, limiting the competition's ability to thrive. The podcast discusses how Varsity's power affects gym owners and coaches, forcing them into economic arrangements such as rebate agreements that restrict their autonomy. These practices not only raise prices for cheer participants but also reduce the diversity of choices available, impacting the overall cheer community.
Consumer Harm and Rising Costs in Cheerleading
An examination of the cheer industry reveals significant consumer harm driven by the monopolistic power held by Varsity Brands. The podcast notes how the rise in competition fees and the high cost of apparel are burdensome for families, many of whom are struggling to afford participation. Varsity's control extends to travel arrangements for competitions, incentivizing families to pay inflated prices for accommodations and services. As cheerleading becomes increasingly expensive, it risks transforming into a luxury sport, limiting access for less affluent families.
Cultural Impacts and Broader Lessons from Cheerleading Monopolies
The dynamics of cheerleading underline wider cultural and economic issues related to monopolies that resonate beyond the cheer community. The podcast draws parallels between the cheerleading market and other sectors where monopolistic behavior exists, emphasizing the need for antitrust considerations that extend beyond mere consumer pricing. Monopolies create an environment of fear among professionals in the industry, much like fears experienced in other competitive sectors. The discussion invites listeners to reflect on how concentrated power can influence various markets, potentially eroding cultural practices and community involvement.
Interest in all-star cheer has exploded over the past decade, and the sport is fast becoming one of the most popular around the globe. But are there competition law issues in competitive cheer? Matt Stoller, author and commentator on the history and politics of monopoly power, joins Danielle Haugland and John Roberti to discuss competitive forces within the industry and how consumers (and kids) may be paying the price for dominance. Listen to this episode if you want to learn more about antitrust analysis in unexpected places.