Oak View Group CEO Tim Leiweke has been indicted on a federal criminal conspiracy charge related to allegedly rigging a bid to develop, manage, and operate the University of Texas‘ basketball and entertainment arena in Austin.
Leiweke, 68, is accused in the indictment of conspiring with another would-be bidder on UT’s $338 million Moody Center arena project to induce that second company in February 2018 to drop out of the competition with Oak View Group in exchange for receiving lucrative subcontracts at the 15,000-seat arena.
Oak View Group CEO Tim Leiweke attends the groundbreaking ceremony for the new University of Texas event facility, the “Moody Center” on December 3, 2019 in Austin, Texas.
Gary Miller | Getty Images
The indictment in U.S. District Court in Austin says that Leiweke later reneged on that promise to the other company after it dropped its effort to bid on the entire project.
“The arena opened to the public in April 2022, and OVG continues to receive significant revenues from the project to date,” the Department of Justice said Wednesday.
The DOJ also said Wednesday that Oak View Group and another sports venue giant, Legends Hospitality, had agreed to pay $15 million and $1.5 million, respectively, in penalties “in connection with the conduct alleged in the indictment against Leiweke.”
Oak View Group’s website says the company manages 400 sports, entertainment and other venues.
FILE PHOTO: An overall view of the Moody Center, home of the Texas Longhorns, in Austin, Texas on December 1, 2022.
Porter Binks | Getty Images
Lewieke, who is charged with one count of conspiracy to restrain trade, is the former CEO of Maple Leaf Sports and Entertainment. Before that, he served as CEO of Anschutz Entertainment Group.
A spokesman for Leiweke, in a statement to CNBC, said, “Mr. Leiweke has 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,” the spokesman 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. The Moody Center is a perfect example, as it has resulted in substantial and sustained benefits to the University of Texas and the City of Austin.”
Oak View Group, in a statement, said, “Oak View Group cooperated fully with the Antitrust Division’s inquiry and is pleased to have resolved this matter with no charges filed against OVG and no admission of fault or wrongdoing.”
“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,” Oak View Group said.
CNBC has requested comment from Legends.
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