All-Star To Be Continued...

[tumbleyoda]

I agree and disagree. I truly don't believe anyone had the proverbial "wool" pulled over their eyes...It was just easier to play naive and reap the profits.

ETA: never seen a bunch of folks grow totally silent the way gym owners did a few years ago after their futile attempt to "take control"

Hmmm maybe not so much wool over their eyes than Wizard of Oz "you see nothing Ignore that man over there" type scenarios. Having spoken with many ex employees the overwhelming consensus was being kept in dark, strength of personal relationships )You know Joe, he would never do that so you can trust if he is in it it must be ok - not realizing Joe sold out a couple of years ago) promises to climb up the industry ladder with more promising and visible opportunities and then once they figured out things may not be what was presented feeling as if they had no option to successfully continue their career unless they kept silent.

If wool was pulled over eyes it was truly the mom and pop gym owners who are not connected to the grid like that, who suffered from being misled. Those that truly wanted to see the industry grow and believed in what we were told was the stated mission, only to find out way differently. That is less likely now than ever with the advance of social media, so I do agree with you in that.

 

[MissCongeniality]

What else would you have us do?

Exactly! There is nothing you can do. Just as there is nothing parents can do. There was an attempt...it failed...kumbaya. At least you, as a large gym owner, will see some positive...meanwhile the bottom feeders (aka the parents) better just stay hooked up to the koolaid IV. And let me make it clear...it isn't that cheer can't be a great experience...but the smoke and mirrors (you don't see the man over there) is real. Parents are going to find themselves forking over more and more because, yep... the power that be "has their number". Maybe a breaking point exists...maybe it does not. Time will tell.

 

[catlady]

Gym owners (and coaches/athletes/etc) have absolutely felt that squeeze as well with higher entry fees, etc. Combine a genius-level martketing push towards Summit and a (practical) monopoly on the event side, they can raise the entry fees without much fear of short-term reprisal. Many things make more sense now, with the push for profit-now at the possible expense of the long-term health of the industry or their image. If your main goal is to boost temporary profit and cash out, that leads to different decisions than trying to grow a healthy industry with great relationships with competitor businesses, customers, and vendors 20 years down the road.

I don't fault a private company for maximizing their profits, but that doesn't mean that we have to admire them for it or trust their overall motives going forward. (FWIW - There are many folks at Varsity that I absolutely love.)

^^^For many in the cheer community, you have had long term business and personal relationships with people at Varsity. I can only speak for the past six or seven years I've been following Varsity and that's strictly from observation and limited reading material since it's privately held. What I do know is Webb loved cheerleading and if he needed something and it didn't exist, it was created to perpetuate that vision, including events, merchandise, government and scoring. <<That's the Varsity the cheer community focuses on. From my perspective in the past 6-7 years I've seen a lot of acquisitions and while people like to discuss "profit" they tend to ignore the "debt" conversation, and that became crystal clear in November 2017 when they received a B2 credit rating from Moody's because their debt ratio was so high. <<That's the Varsity I focus on. There's only one way to pay debt, so when those acquisitions happened the fees began to increase. High valuation, high debt, brings the necessity of equity groups @Scotty B mentioned how the employees pumped an additional billion into Varsity the past four years, but in reality, a large portion of that billion came from debt and its acquisition of BSN Sports in 2015. As a once corporate buyer perspective, I know the highest gross margin piece of the pie is coming from its "in stock", "fast turning" merchandise. It's not coming from the EP side where the operation portion relies on third party businesses and government owned facilities to do business. Adam Blumenfeld from BSN being the CEO, confirmed that.

I worked for equity groups my entire career, not an individual or tight knit group of investors, so the whole "it's business, not personal" is somewhat ingrained in me, for that I apologize. But, coming from a corporate perspective, it's not doom and gloom. Personally, I don't see an equity group with a retail background wanting to govern cheer, create score sheets or deal with judging drama, they want to sell merchandise. <<<The cheer community wanted that. I'm seeing the door slowly open to the IASF. Now, that may not be what people expected and wanted, but their mission says it is to move forward "on a global course". The EP catagory deals with city government, government venues, third party businesses...IMO Hades on earth. My background in operations is next to zero so I'll leave that for someone else, but I do know when dealing with third parties and government your profit erodes quickly. I, personally, believe a lot of those EP acquisitions and mergers happened out of necessity because it is so hard to profit under those circumstances (contrary to what many imply). I know when May Corp had electronics in their dept stores their gross margin for that category was around 8% (pitiful), but Best Buy came along and does it for a PM around 22%. Perspective, fast turning imports in the early 2000's had a PM around 55% at May Corp (ETA). So, they will keep the portion they do best and allow others to take on the portions they can do better.

 

[ScottyB]

^^^For many in the cheer community, you have had long term business and personal relationships with people at Varsity. I can only speak for the past six or seven years I've been following Varsity and that's strictly from observation and limited reading material since it's privately held. What I do know is Webb loved cheerleading and if he needed something and it didn't exist, it was created to perpetuate that vision, including events, merchandise, government and scoring. <<That's the Varsity the cheer community focuses on. From my perspective in the past 6-7 years I've seen a lot of acquisitions and while people like to discuss "profit" they tend to ignore the "debt" conversation, and that became crystal clear in November 2017 when they received a B2 credit rating from Moody's because their debt ratio was so high. <<That's the Varsity I focus on. There's only one way to pay debt, so when those acquisitions happened the fees began to increase. High valuation, high debt, brings the necessity of equity groups @Scotty B mentioned how the employees pumped an additional billion into Varsity the past four years, but in reality, a large portion of that billion came from debt and its acquisition of BSN Sports in 2015. As a once corporate buyer perspective, I know the highest gross margin piece of the pie is coming from its "in stock", "fast turning" merchandise. It's not coming from the EP side where the operation portion relies on third party businesses and government owned facilities to do business. Adam Blumenfeld from BSN being the CEO, confirmed that.

I worked for equity groups my entire career, not an individual or tight knit group of investors, so the whole "it's business, not personal" is somewhat ingrained in me, for that I apologize. But, coming from a corporate perspective, it's not doom and gloom. Personally, I don't see an equity group with a retail background wanting to govern cheer, create score sheets or deal with judging drama, they want to sell merchandise. <<<The cheer community wanted that. I'm seeing the door slowly open to the IASF. Now, that may not be what people expected and wanted, but their mission says it is to move forward "on a global course". The EP catagory deals with city government, government venues, third party businesses...IMO Hades on earth. My background in operations is next to zero so I'll leave that for someone else, but I do know when dealing with third parties and government your profit erodes quickly. I, personally, believe a lot of those EP acquisitions and mergers happened out of necessity because it is so hard to profit under those circumstances (contrary to what many imply). I know when May Corp had electronics in their dept stores their gross margin for that category was around 8% (pitiful), but Best Buy came along and does it for a PM around 22%. Perspective, fast turning imports in the early 2000's had a PM around 55% at May Corp (ETA). So, they will keep the portion they do best and allow others to take on the portions they can do better.

Relevant.... (from a reddit post about Toys R Us workers attempting to fight back after losing their severance packages in the bankruptcy due to debts by KKR and Bain Capital)

 

[catlady]

Relevant.... (from a reddit post about Toys R Us workers attempting to fight back after losing their severance packages in the bankruptcy due to debts by KKR and Bain Capital)

In the Toys R Us case, they were on the selling block in 2004 (FAO Shwartz was in bankruptcy at the same time), the flyer above doesn't mention they were already $1 billion in debt. Bain, KKR, and Vornado took them over in 2005 in a leveraged buyout which typically means everyone benefits in the sale. However, Toys R Us had issues with flat sales and profit loss since the 1990's, they couldn't gain traction with the rapidly growing internet commerce and their new debt on top of the old. The employee and media claim that they could have taken on e-commerce when their debt was only $1 billion versus the $6.2 they now have with Bain. But, where were the going to get the money to build their internet sales? <<< The media and employees conveniently leave out that tiny detail. If you are looking for greed in the retail world, it happened in the 1980's when retail sales were booming and it began the expansion fury to grab market share. All of these retailers took on incredible debt with the hope that their increased market coverage would bring incredible sales. Hello internet.

Varsity's debt issue is the same in the sense their debt came from aggressive acquisitions, but different in the sense they're a niche business. They may have a B2 Moody rating, but lenders wouldn't see them as much of a short term loan risk.

 

[Keep_Believing]

Is it true stay to play will now be required for all Varsity competitions and that family exceptions (staying with family) will no longer be allowed? I am praying that's a false rumor.

 

[CheerBank]

Is it true stay to play will now be required for all Varsity competitions and that family exceptions (staying with family) will no longer be allowed? I am praying that's a false rumor.

I heard they changed the family exemption to where the gym is located as opposed to if you have family within a certain radius. I haven’t seen that in writing though so don’t hold me to it.

 

[Keep_Believing]

I heard they changed the family exemption to where the gym is located as opposed to if you have family within a certain radius. I haven’t seen that in writing though so don’t hold me to it.

That is what I heard too.

 

[cheermomforever]

That is what I heard too.

So glad we r not doing stay to play comp this year.... trying UCA instead.

 

[Boughetto]

Is it true stay to play will now be required for all Varsity competitions and that family exceptions (staying with family) will no longer be allowed? I am praying that's a false rumor.

I hope that's not true but I'm thinking it is. If you check the JAMFEST 2019 website for stay to play the only exemptions they allow :

 

[Keep_Believing]

So glad we r not doing stay to play comp this year.... trying UCA instead.

I thought UCA was part of Varsity?

 

[cheermomforever]

I thought UCA was part of Varsity?

Don’t think it’s STP....,

 

[Keep_Believing]

Rumors can be false, many are false, but new rumor I heard was all Varsity comps will be stay to play.

 

[cheermomforever]

Rumors can be false, many are, but new rumor I heard was all
That would not be good ..hope it doesn’t change!

 

[Keep_Believing]

Me too!