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Youth hockey operator Black Bear Sports Group has been hit with a proposed class action lawsuit from parents who claim the company coerces families into using designated hotels, charges undisclosed fees, and collects kickbacks from hotel partners.
The suit, filed Sept. 1 in Delaware federal court, takes aim at Black Bear, which came under fire last year following a story from The Lever headlined “Wall Street Is Paywalling Your Kids’ Sports.” It references the “Let Kids Play Act,” federal legislation that was proposed in May by Sen. Chris Murphy (D., Conn.), Rep. Chris Deluzio (D., Pa.), and other Democratic lawmakers. That bill would effectively ban private-equity investors from owning or operating youth sports businesses by forcing existing owners to sell assets and penalizing those who engage in predatory practices.
“This is really about getting the company to change its practices,” Karen Dahlberg O’Connell of Almeida Law Group LLC, one of the lawyers representing the plaintiffs, tells Front Office Sports.
“We’re also looking to get refunds for parents to compensate for junk fees and inflated rates they’ve paid as a result of this policy,” she says. “The way they’ve monopolized youth hockey, they can use a child’s roster spot as leverage over the parent’s credit card.”
Greenberg Traurig partner Doug Gansler, attorney for Black Bear, tells FOS the allegations are “entirely without merit.”
The primary issue at hand in the 46-page lawsuit is an alleged “Stay to Play” policy enforced by Black Bear in connection with hockey tournaments it operates under the following leagues: Defender Hockey Tournaments, Tier 1 Hockey Federation, and National Girls Hockey League.
The complaint challenges the “unfair practice of coercing parents” into complying with the policy, which allegedly requires families to book hotel reservations through a specific platform for their kids to participate in events.
Gansler disputes that notion, saying “there is no coercion or coverup, and plaintiffs are either misinformed or intentionally distorting the facts.”
The suit says that Black Bear “falsely” tells parents they must use a specific platform to book rooms with particular hotel partners, but in reality there is a “buyout fee” option under which parents do not have to do so. It says Black Bear “conceals or omits” this, and that the entire practice benefits Black Bear because it “receives kickbacks” from hotel partners. The suit also accuses Black Bear of “tacking on junk fees” in connection with the policy.
Gansler, however, says the buyout policy cited in the complaint doesn’t even exist, and notes that the contracts parents sign “make clear that the organization receives rebates from participating hotels.”
According to Gansler, “stay-to-play” policies are “used throughout competitive youth hockey and by USA Hockey, the sport’s national governing board, to ensure adequate hotel rooms for participating teams and to create a better overall event experience for players.”
“These policies are also used throughout other competitive youth sports for the same reasons,” he says, adding Black Bear will “vigorously defend” its policies.
The expectation is that the total number of class members could be in the tens of thousands, if not millions, according to the suit. A civil cover sheet filed alongside the complaint says the damages are expected to be greater than $5 million. The suit features four causes of action, including unjust enrichment and violations of consumer protection laws.
Black Bear, which has described itself as the “largest owner/operator of ice rinks in the U.S.,” owns more than 40 rinks across 11 states. The company was founded in 2015 by private-equity veteran Murry Gunty, who has faced increasing criticism over the last year. In March, Gunty stepped down as CEO.
Speaking to FOS in December, Gunty said, “I feel very good about our role in the sport of hockey. We believe we are the protector of youth hockey.”
