After reading and hearing about the monopoly they have I find it hard to believe they're key to the success of the "little guy". I fail to understand how a company can run comp's, training camps, own gyms that compete at said comp's, and encourage gyms to only wear their apparel and shoes, and give gyms a kickback for participating in the program. Where does the little guy have a standing chance to compete?
I'm sure if Nfinity and Rebel were given the opportunity to pay the high fees for vendor space at the events they would have jumped at the chance; however - I wouldn't go as far as to say they were piggy-backing off Varsity. They just want an equal chance at exposure that they aren't being permitted. Being creative at working around those limitations is being business savvy.
You used Pepsi as an example. Yes, it's true and very common place to have exclusive supplier contracts but the difference is Pepsi doesn't own 95% of the venues or sporting events, own some of the teams that are competing at those sporting events, own the food suppliers providing the food, and the uniform suppliers that are outfitting the majority of the teams and offering a kickback to the teams for attending their events and wearing their apparel. Imagine the uproar if Pepsi went to so far as to offer kickbacks to schools and infiltrated the school sport programs. It's one thing to have a school board signup a beverage company to exclusively sell their product and get a score board on their field with Pepsi's name on it (corporate sponsorship) but the ethical issues arise when their fingers get involved in other areas of the programs.
That situation is the furthest thing from healthy competition and giving a choice to the consumer. There's no setting of fair market value: they're determining it because consumers don't really have any other options unless they seek out the little guys but that can be time consuming when it's easier to have everything already packaged up. There's no saying the Pepsi teams wouldn't win because of the unfair advantages given to them. There's no saying they profit at wiping out the competition and creating a conflict of interest for themselves.
At least every other beverage supplier has a chance to compete for the contract to be the exclusive supplier because the owner of the venue is a 3rd party. It creates fair competition.
Did you know car manufacturers aren't permitted to own car dealerships? Why? Because this fairly standard law was created to ensure healthy competition at the retail level. Why are mergers between large organizations so scrutinized and evaluated by financial security firms? Because anti-trust laws are in place to protect the consumer and ensure that things like price fixing, and healthy competition are encouraged.
Nobody is crying "woe is me" and expecting sympathy but I wouldn't dare ever go so far as to say start-ups owe anything to Varsity for their success. I think if given the chance, startups would be more successful if they were allowed to compete on an equal footing. Competition is great. It pushes industry to strive for the best instead of settle for mediocrity, or get too comfortable and overconfident.
All one has to do is look at Blackberry to see what happens when an industry giant settles and doesn't strive for competition and innovation. Eventually the giant comes crashing down and opens the door for others to come in and up the game and improve what was already created.
ETA:
@catlady you used the great examples of stores and anchor stores. You're absolutely correct. Smaller and independent stores greatly depend on anchor stores for their success. However, we need to compare apples to apples. They all have an equal opportunity in the sense that they are sharing retail space proximity and providing customers the opportunity to shop at the various stores in 1 location. I'm notorious for going shopping at the mall and walking through the different stores to finding the best deal (whether that deal be on price or selection/options. I want the best value for my dollar and want to know that I don't have settle just because I have no other option). At least as the customer I have the chance to shop and have options.
That's not happening here. If we take your anchor store analogy one step further to have that work in this situation Varsity would have to allow the smaller companies to be vendors at their events (even if they only gave prime vendor space to their subsidiaries and gave the smaller guys the less prime space it's still creates choice and competition) so there's equal access to the consumers and the consumers would have multiple options to exercise their purchasing power.
