Timothy Leiweke, co-founder mogul of leisure venue developer Oak View Group (OVG), is dealing with a decade in jail following an indictment returned on Wednesday. Leiweke is accused of allegedly conspiring with the CEO of competitor Legends Hospitality to verify Oak View Group was the one bidder on a venture to develop the 15,000-seat, $338 million Moody Heart, which hosts the College of Texas’ mens and ladies’s basketball video games and musicians corresponding to Leon Bridges, Willie Nelson, George Strait, and Kali Uchis.
In line with the Division of Justice, Leiweke allegedly advised colleagues again in 2017 he wished to determine a method to get OVG’s competitor to “again down” in bidding for the sector venture. In February 2018, Leiweke allegedly struck a deal by which the competitor CEO at Legends Hospitality agreed to face down on bidding for the venture. In alternate, Leiweke allegedly advised the Legends CEO, unnamed by the DOJ, that OVG would give them a number of the enterprise by way of subcontracts. That left OVG as the one bidder for the event contract.
Officers referred to as the alleged deal “bid rigging” and mentioned it allowed the corporate to land a extremely profitable contract with out an arm’s-length aggressive course of. The world opened in 2022, and authorities mentioned OVG continues to obtain “important revenues” from the venture to this point. OVG has agreed to pay $15 million in penalties whereas Legends Hospitality can pay $1.5 million, each “in reference to the conduct alleged within the indictment towards Leiweke,” DOJ introduced.
The antitrust division charged Leiweke with violating Part 1 of the Sherman Act, which outlaws bid rigging. The utmost penalty is 10 years in jail and a $1 million legal high quality, though it could possibly be elevated to twice the achieve from the alleged crime or twice the losses suffered by victims if both is bigger than the statutory most, authorities mentioned. The legal penalty for an organization is as much as $100 million, in response to the Federal Commerce Fee. OVG was not charged.
“Timothy Leiweke allegedly led a scheme designed to steer the contract for leisure providers at a public college’s area to his firm. Public contracts are topic to legal guidelines requiring an open and aggressive bid course of to make sure a stage taking part in area,” mentioned assistant director in control of the FBI’s New York area workplace Christopher G. Raia in a press release. “The FBI is set to make sure that those that disregard truthful competitors ideas don’t profit from a rigged bidding course of focusing on our communities and public establishments.”
On Wednesday, OVG introduced Leiweke would relinquish the CEO position and transition right into a vice chairman position on the board. The corporate is the biggest developer of sports activities and reside leisure venues worldwide and was based in 2015 by Leiweke and Irving Azoff. The latter is former CEO of Ticketmaster Leisure and govt chairman of Stay Nation Leisure. OVG has 30,000 staff throughout lots of of venues and has dedicated greater than $5 billion to creating new arenas within the subsequent three years.
A spokesperson for Leiweke mentioned the veteran exec had “completed nothing flawed and can vigorously defend himself and his well-deserved popularity for equity and integrity.”
“The Antitrust Division’s allegations are flawed on the legislation and the information, and the case ought to by no means have been introduced,” Leiweke’s spokesperson mentioned. “The legislation is obvious: vertical, complementary enterprise partnerships, just like the one contemplated between OVG and Legends, are authorized. These allegations blatantly ignore established authorized precedent and search to criminalize frequent teaming efforts which can be confirmed to reinforce competitors and profit the general public.”
In one other assertion, Leiweke mentioned he was happy the corporate resolved the DOJ’s inquiry with none prices or admission of wrongdoing.
“[T]he very last thing I need to do is distract from the accomplishments of the crew or draw focus away from executing for our companions, so the Board and I made a decision that now could be the best time to implement the succession plan that was already underway and transition out of the CEO position,” Leiweke mentioned. “ In my new position as Vice Chairman of the Board and as an OVG shareholder, I stay as dedicated as ever to the long-term success of the corporate, and I do know OVG, our valued companions and our clients are in nice palms with Chris and the remainder of our stellar leaders.”
Oak View Group mentioned in a assertion it cooperated totally with the DOJ’s inquiry and is happy the matter has been resolved with no prices towards OVG.
“We help all efforts to make sure a good and aggressive surroundings in our {industry} and are dedicated to upholding industry-leading compliance and disclosure practices,” OVG’s acknowledged.
Legends didn’t instantly reply to a request for remark.
