Here's another children's cheerleader cheer that has words that are spelled out:

U-G-L-Y (Version #1)
U-G-L-Y
You ain't got no alibi
You're ugly
What? What?
You're ugly.

M-O-M-M-A
That is how you got that way
Your Momma yeah yeah
Your Momma
-Janell H (African American woman); from her memories of high school cheerleader cheers in Pittsburgh,PA in the mid to late 1980s; collected by Azizi Powell in 2003;http://www.cocojams.com/taunting_rhymes_2.htm

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Here's another version of that same cheer (or handclap rhyme?) :

U-G-L-Y (Version #2)
U-G-L-Y
You aint got no alibi U ugly Yeah Yeah U ugly
M-A-M-A how did U get that way UR mama Yeah Yeah UR mama
D-A-D-D-Y U dont even kno the guy UR daddy Yeah Yeah UR daddy
-Cherry, 2/15/2006 ; http://www.cocojams.com/taunting_rhymes_2.htm

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"U-G-L-Y" was included in the 1986 movie Wildcats which starred Goldie Hawn. In that movie an urban school's African American cheerleading squad chanted this cheer during a football game. The verses that they recited were the same as the first two verses that Cherry sent in. See http://www.imdb.com/title/tt0092214/ for more information about this movie.

On 9/27/2007, a Cocojams reader who uses the tag name "nobody cares about me lol" sent in the lyrics to U-G-L-Y that were performed by Daphne And Celeste on the soundtrack of one of the Bring It On cheerleader movie. These lyrics are found on a number of websites, including http://www.stlyrics.com/lyrics/bringiton/ugly.htm. Another version of U-G-L-Y was recorded in 1985 by Fishbone. The lyrics to that version are also found on a number of websites, including http://www.asklyrics.com/display/Fishbone/Ugly_Lyrics/121714.htm

I wouldn't be at all surprised to learn that the "U-G-L-Y" chant probably came from "the streets" and/or "the playground" before being picked up by the Fishbone music group and the Wildcats movie.