Oak View Group CEO Indicted In Bid-Rigging Scheme Over Austin Arena

Timothy Leiweke, the CEO of sports venue owner and operator Oak View Group, was indicted Wednesday for allegedly rigging the bidding for a $375M multipurpose arena at the University of Texas at Austin.

The federal criminal conspiracy charge alleges Leiweke worked with the CEO of a competitor for more than six years to steer the contract bidding to develop, manage and operate the Moody Center, where the UT men's and women's basketball teams play, to Oak View Group. The competitor’s company is not named in the unsealed indictment.

Oak View Group agreed to pay $15M in penalties for Leiweke’s alleged actions, while fellow venue-services company Legends Hospitality will pay $1.5M for its connection to his conduct, the Department of Justice said in a press release. 

In a statement on its website, OVG said it fully cooperated with the the inquiry, which came from the DOJ's Antitrust Division, and was “pleased to have resolved this matter with no charges filed” against the company as well as “no admission of fault or wrongdoing.”

In a press release issued late Wednesday, hours after the indictment was unsealed, OVG announced that Leiweke would be resigning as CEO while remaining with the company as a shareholder and vice chairman of the board.

Chris Granger, who had been president of OVG subsidiary OVG360 and formerly served as president of the Detroit Tigers and Detroit Red Wings, was named interim CEO.

“While I’m pleased the company has resolved its Department of Justice Antitrust Division inquiry without any charges filed or admission of wrongdoing, the last thing I want to do is distract from the accomplishments of the team or draw focus away from executing for our partners,” Leiweke said in a statement.

Legends Hospitality was co-founded by YGE Holdings, an affiliate of the New York Yankees, and Jones Concessions LP, an affiliate of the Dallas Cowboys. Legends Hospitality, which is majority owned by Sixth Street Partners, didn't immediately respond to a request for comment.

In a statement to CNBC, a spokesman for Leiweke said the OVG CEO had done nothing wrong and will vigorously defend himself.

“The Antitrust Division’s allegations are wrong on the law and the facts, and the case should never have been brought,” Leiweke’s spokesman said to CNBC. “The law is clear: vertical, complementary business partnerships, like the one contemplated between OVG and Legends, are legal.”

According to the indictment, Leiweke found out in September 2017 that Legends was bidding on the UT Austin project and came up with a plan to give Legends “some of the business” to “get them to back down.” Leiweke then allegedly reached an agreement with Legends’ CEO in early 2018 for it to stand down from bidding on the project in exchange for subcontracts at the arena.

OVG won the bid for the project, and the Moody Center opened in April 2022. Assistant Attorney General Abigail Slater said the alleged bid-rigging scheme “deprived a public university and taxpayers of the benefits of competitive bidding.”

“Unfair business practices, like those employed here, make it very difficult for the American people to pursue prosperity like our founders intended,” U.S. Attorney for the Western District of Texas Justin Simmons said in a statement. 

Leiweke faces a maximum of 10 years in prison and a $1M criminal fine if convicted on the charge of violating Section 1 of the Sherman Act.

Before running OVG, Leiweke was president and CEO of Maple Leaf Sports & Entertainment, a professional sports and commercial real estate company that owns the Toronto Raptors, Toronto Maple Leafs and other professional teams.

“These allegations blatantly ignore established legal precedent and seek to criminalize common teaming efforts that are proven to enhance competition and benefit the public,” Leiweke’s spokesman said to CNBC. “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.”

OVG manages and operates more than 300 venues in the U.S., including Citizens Bank Park in Philadelphia, Climate Pledge Arena in Seattle and the Cotton Bowl in Dallas.

UPDATE, JULY 9, 4:50 P.M. ET: This story has been updated with the announcement that Leiweke is resigning as CEO of OVG.