Timothy Leiweke, co-founder mogul of entertainment venue developer Oak View Group (OVG), is facing a decade in prison following an indictment returned on Wednesday. Leiweke is accused of allegedly conspiring with the CEO of competitor Legends Hospitality to make sure Oak View Group was the only bidder on a project to develop the 15,000-seat, $338 million Moody Center, which hosts the University of Texas’ mens and women’s basketball games and musicians such as Leon Bridges, Willie Nelson, George Strait, and Kali Uchis.
According to the Department of Justice, Leiweke allegedly told colleagues back in 2017 he wanted to figure out a way to get OVG’s competitor to “back down” in bidding for the arena project. In February 2018, Leiweke allegedly struck a deal in which the competitor CEO at Legends Hospitality agreed to stand down on bidding for the project. In exchange, Leiweke allegedly told the Legends CEO, unnamed by the DOJ, that OVG would give them some of the business through subcontracts. That left OVG as the only bidder for the development contract.
Officials called the alleged deal “bid rigging” and said it allowed the company to land a highly lucrative contract without an arm’s-length competitive process. The arena opened in 2022, and authorities said OVG continues to receive “significant revenues” from the project to date. OVG has agreed to pay $15 million in penalties while Legends Hospitality will pay $1.5 million, both “in connection with the conduct alleged in the indictment against Leiweke,” DOJ announced.
The antitrust division charged Leiweke with violating Section 1 of the Sherman Act, which outlaws bid rigging. The maximum penalty is 10 years in prison and a $1 million criminal fine, although it could be increased to twice the gain from the alleged crime or twice the losses suffered by victims if either is greater than the statutory maximum, authorities said. The criminal penalty for a corporation is up to $100 million, according to the Federal Trade Commission. OVG was not charged.
“Timothy Leiweke allegedly led a scheme designed to steer the contract for entertainment services at a public university’s arena to his company. Public contracts are subject to laws requiring an open and competitive bid process to ensure a level playing field,” said assistant director in charge of the FBI’s New York field office Christopher G. Raia in a statement. “The FBI is determined to ensure that those who disregard fair competition principles do not benefit from a rigged bidding process targeting our communities and public institutions.”
On Wednesday, OVG announced Leiweke would relinquish the CEO role and transition into a vice chairman role on the board. The company is the largest developer of sports and live entertainment venues worldwide and was founded in 2015 by Leiweke and Irving Azoff. The latter is former CEO of Ticketmaster Entertainment and executive chairman of Live Nation Entertainment. OVG has 30,000 employees across hundreds of venues and has committed more than $5 billion to developing new arenas in the next three years.
A spokesperson for Leiweke said the veteran exec had “done nothing wrong and will vigorously defend himself and his well-deserved reputation for fairness and integrity.”
“The Antitrust Division’s allegations are wrong on the law and the facts, and the case should never have been brought,” Leiweke’s spokesperson said. “The law is clear: vertical, complementary business partnerships, like the one contemplated between OVG and Legends, are legal. These allegations blatantly ignore established legal precedent and seek to criminalize common teaming efforts that are proven to enhance competition and benefit the public.”
In another statement, Leiweke said he was pleased the company resolved the DOJ’s inquiry without any charges or admission of wrongdoing.
“[T]he last thing I want to do is distract from the accomplishments of the team or draw focus away from executing for our partners, so the Board and I decided that now is the right time to implement the succession plan that was already underway and transition out of the CEO role,” Leiweke said. “ In my new role as Vice Chairman of the Board and as an OVG shareholder, I remain as committed as ever to the long-term success of the company, and I know OVG, our valued partners and our customers are in great hands with Chris and the rest of our stellar leaders.”
Oak View Group said in a statement it cooperated fully with the DOJ’s inquiry and is pleased the matter has been resolved with no charges against OVG.
“We support all efforts to ensure a fair and competitive environment in our industry and are committed to upholding industry-leading compliance and disclosure practices,” OVG’s stated.
Legends did not immediately respond to a request for comment.