via: D Magazine – Inside the Multibillion-Dollar Dallas Empire Powering Youth Sports and Cheer Across America
📌 Key Takeaways
- KKR purchased Varsity Brands for $4.8 billion in 2024, the company’s fourth private equity owner since 2010
- Varsity Brands generates $3 billion in annual revenue and $400 million in EBITDA through youth sports distribution and cheerleading
- The company settled two monopoly lawsuits for $126 million combined while maintaining market leadership positions
- CEO Adam Blumenfeld plans a public offering within the next few years as private buyer pool shrinks
- BSN Sports and Varsity Spirit serve approximately 55 million youth athletes annually
🧠 Youth Sports Industry Takeaway
- Fourth ownership change demonstrates private equity interest in youth sports infrastructure companies
- Scale-driven business models face both growth opportunities and legal scrutiny
- Companies expanding from youth markets into professional sports entertainment
Fourth Private Equity Owner Values Company at $4.8 Billion
KKR acquired Varsity Brands for $4.8 billion in 2024, continuing a series of ownership transitions that began when OnCap purchased the company for $184 million in 2010. Charlesbank bought Varsity Brands from OnCap for $1.5 billion in 2014, then sold to Bain Capital for $2.5 billion in 2018.
The Dallas-based company operates two main divisions: BSN Sports, which distributes athletic equipment and uniforms to teams, and Varsity Spirit, which provides cheerleading training, competitions, and uniforms. Combined, the divisions generate $3 billion in annual revenue with $400 million in EBITDA.
BSN Sports employs 1,500 salespeople and distributes products from approximately 700 vendors including Nike, Adidas, Under Armour, and Puma. Varsity Spirit operates 600 regional, state, and national championships annually while training 350,000 athletes through camps and serving 750,000 participants in competitions.
“If we didn’t see the potential to at least double to triple the size of this business, then the investment would not have been for us,” said Felix Gernburd, a KKR partner involved in the transaction.
CEO Adam Blumenfeld remained with the company through all four ownership changes. During his tenure, he completed approximately 175 acquisitions targeting businesses with annual revenues ranging from $2 million to $150 million.
BSN Sports Distribution Model and Market Position
BSN Sports functions as an intermediary between major athletic brands and youth teams, handling distribution logistics that manufacturers typically avoid in team sales. The company manages customization, shipping, customer service, and accounts receivable for team orders.
“We do all the un-sexy stuff that goes into taking care of the needs of teams,” Blumenfeld explained. “Whether it’s shipping to homes, customization, customer service, or accounts receivable—this is not second nature to a major brand.”
Major manufacturers focus on retail sales where products sell out quickly. Team sports require different logistics, as incomplete uniform orders can disrupt entire teams. BSN Sports addresses this by managing end-to-end fulfillment for approximately 700 vendors.
The company developed proprietary apparel lines in 2020 and recently negotiated licensing agreements with Under Armour that allow BSN to manufacture select products directly. These arrangements help offset tariff impacts while reducing costs.
BSN Sports historically served middle schools, high schools, and colleges. The company generated $75 million in club and select team sales last year, representing entry into a $5 billion market segment.
Varsity Spirit Operations and Legal Settlements
Varsity Spirit controls multiple aspects of competitive cheerleading, from athlete training to uniform manufacturing and event management. The division hosts approximately 600 championships annually and maintains partnerships with Disney and ESPN. In 2024, Varsity Spirit produced 55 hours of televised programming.
The company faced two class-action lawsuits in 2020 alleging monopolistic practices. Fusion Elite All Stars and a group of parents accused Varsity Spirit of using exclusive contracts, predatory pricing, and influence through the U.S. All Star Federation to control the competitive cheerleading market.
According to the lawsuits, Varsity Spirit controlled as much as 90 percent of cheer and dance events and 80 percent of uniform sales. Plaintiffs claimed the company leveraged exclusive contracts and rebates to force gyms to use Varsity services while blocking rival championships.
Varsity Brands settled both cases for a combined $126 million and agreed to policy changes allowing increased competition. Despite the settlements, company executives maintain they did not operate monopolistically.
“We are a leader. We are a scale provider. We always have been and we’re proud of that,” Blumenfeld stated. “There is no reason we should be embarrassed about being a leader in a marketplace.”
The company also faces lawsuits alleging failure to prevent sexual abuse by affiliated coaches. Additionally, victims of a 2025 incident at the National Cheer Association All-Star National Championships in Dallas are seeking $1 million in damages after a parent altercation led to a stampede causing injuries.
Professional Cheerleading Launch and Business Expansion
Varsity Spirit announced plans to launch a professional cheerleading association starting with four teams in 2026. Athletes will participate in auditions in September 2025, followed by a draft system. The inaugural season begins in January 2026 with events in Indianapolis, Atlanta, Houston, Anaheim, and Nashville.
Unlike traditional cheerleading roles, participants will receive compensation. The company is finalizing broadcast rights agreements and developing an unscripted television series about the league’s creation.
“We’re putting the finishing touches on a broadcast rights deal and will produce an unscripted TV show on the making of the league,” said Bill Seely, Varsity Spirit president.
Varsity Spirit is also expanding its National School Spirit Championship to include band and performing arts competitions alongside existing cheerleading and dance events.
BSN Sports president Terry Babilla outlined expansion goals for club and select teams: “I want BSN to be the Amazon of team sports.” The company is restructuring sales operations specifically for this market segment.
Public Offering Plans and Ownership Structure
Blumenfeld expects to take Varsity Brands public within the next few years as the company’s size limits available private equity buyers. The timing depends on macroeconomic conditions and continued revenue and profit growth.
“I love the private markets because you can get a lot done and avoid some of the distraction that comes with being public,” Blumenfeld noted. “But we’re getting to a certain size—EBITDA well over $400 million and sales close to $3 billion—where the community of sponsors that you would market to privately shrinks.”
KKR implemented an employee ownership program giving all 7,500 Varsity Brands employees equity stakes. According to Gernburd, KKR has implemented similar programs across 60 companies in its portfolio, with 10 exits showing higher than average investment returns.
The company continues acquiring businesses and expanding internationally. Recent major acquisitions included Lids Team Sports in 2016 and East Bay in 2022, both generating over $150 million in annual revenue.
Market Position and Growth Trajectory
Varsity Brands operates in multiple youth sports segments through its integrated business model. BSN Sports serves as the primary distributor for major athletic brands while Varsity Spirit controls significant portions of competitive cheerleading infrastructure.
The company’s acquisition strategy targets businesses across a wide revenue range, from $2 million mom-and-pop operations to $150 million enterprises. This approach has enabled Varsity Brands to expand market presence while maintaining relationships with major athletic manufacturers.
Tariff impacts are affecting BSN Sports operations, leading the company to seek new manufacturing partners and renegotiate brand contracts. The Under Armour licensing agreement represents one approach to managing cost pressures while maintaining product quality.
Both divisions continue gaining market share in their respective segments. BSN Sports is expanding beyond traditional school markets into club and select teams, while Varsity Spirit is moving into professional sports and additional performance categories.
The employee ownership program and planned public offering represent efforts to retain talent while providing liquidity options as the company continues growing.
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