The founder of venue operator Oak View Group, Tim Leiweke, is standing down as CEO of the company after being indicted over allegations he “orchestrated a conspiracy to rig the bidding process” when the University Of Texas was seeking a partner to develop the Moody Center venue in Austin.
Leiweke strongly denies the allegations of criminal conduct, which could result in ten years in prison, but says “the last thing I want to do is distract from the accomplishments” of the OVG team or to “draw focus away from executing for our partners”. Therefore “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”.
It’s alleged that when the university was inviting bids to develop the new venue that was subsequently named the Moody Center, Leiweke and OVG persuaded a rival - Legends Hospitality - to drop out of the bidding in return for a promise of lucrative sub-contracts once the new arena was in operation.
Leiweke’s representatives insist agreements and partnerships between rival businesses involved in major projects like this are entirely legal, but prosecutors say the arrangement violated competition law.
In a statement announcing the indictment against Leiweke, FBI Assistant Director Christopher G Raia says that the OVG chief “allegedly led a scheme designed to steer the contract for entertainment services at a public university’s arena to his company”.
Public contracts of this kind, he adds, “are subject to laws requiring an open and competitive bid process to ensure a level playing field” and 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”.
Abigail Slater, Assistant Attorney General at the US Department Of Justice, says that Leiweke “rigged a bidding process to benefit his own company and deprived a public university and taxpayers of the benefits of competitive bidding”. The DoJ’s Antitrust Division, she adds, “will continue to hold executives who cheat to avoid competition accountable”.
Former AEG chief Leiweke co-founded OVG in 2015 with veteran artist manager Irving Azoff. It now has involvement in 400 venues, mainly in North America, although it has started to branch out internationally, including in the UK with Manchester’s Co-op Live.
It was announced as the University Of Texas’s partner on the new Moody Center in 2018, with building work on that venue beginning the following year. The arena then opened in 2022.
The DoJ says that, after persuading Legends to pull out of the bidding, OVG put in the “the sole qualified bid” to develop the university’s new arena, therefore easily winning the rights to develop and run the venue from which it “continues to receive significant revenues”.
Following the DoJ’s investigation into the Moody Center bidding process, OVG has agreed to pay penalties of $15 million, while Legends will pay $1.5 million. Those payments have ended the government department’s investigation into the two companies without either admitting “fault or wrongdoing”, but the case against Leiweke personally proceeds.
A spokesperson for the exec says, “Mr Leiweke has done nothing wrong and will vigorously defend himself and his well-deserved reputation for fairness and integrity”. The DoJ’s allegations are “wrong on the law and the facts”, they add, “and the case should never have been brought”.
They then insist that “the law is clear” that “vertical, complementary business partnerships, like the one contemplated between OVG and Legends, are legal”. And, therefore, the DoJ is “blatantly ignoring established legal precedent” and “seeking to criminalise common teaming efforts that are proven to enhance competition and benefit the public”.
Leiweke will remain on the OVG board taking the position of Vice-Chair. Chris Granger, President of the company’s OVG360 division, has been appointed interim CEO of the group.