The Justice Department announced on Wednesday that a federal grand jury has indicted Tim Leiweke, the co-founder and CEO of Oak View Group, for allegedly crafting a scheme to rig the bidding process of the Moody Center, an entertainment venue located on campus at the University of Texas at Austin.
If convicted of the charge under Section 1 of the Sherman Act, Leiweke could face up to a decade in prison.
The indictment, filed in the U.S. District Court for the Western District of Texas, claims that Leiweke conspired with another CEO, who is not named, from 2018 to 2024.
More specifically, the DOJ claims that Leiweke told colleagues he learned of a rival company intending to bid against Oak View for the Moody Center project. After additional discussions and strategy sessions, Leiweke allegedly reached an agreement with the competitor’s CEO in which the rival company agreed to not bid. In exchange, the rival company would receive subcontracts related to the arena. OVG, the DOJ contends, was the only qualified bid and thus won the arena project.
The fact that UT is a public—and thus taxpayer-funded—university is a significant feature. The DOJ points out that public contracts require “an open and competitive bid process” to ensure a level playing field. The basic logic is that a competitive bidding process forces rivals to offer better bids knowing that they could lose out. With rigged bidding, that competition is reduced or altogether lost, meaning the selector of the bid is denied the fruits of competition. A rigged bid at a public university can also undermine taxpayer interest and reflect malfeasance of government resources.
The DOJ says that OVG and Legends Hospitality “have agreed to pay $15 million and $1.5 million in penalties, respectively,” to resolve their potential liability “in connection with the conduct alleged in the indictment against Leiweke.”
In addition to up to 10 years in prison, a conviction could mean Leiweke must pay a $1 million fine, an amount that could be increased depending on losses suffered by alleged victims.
In a statement, Oak View Group said the company has “cooperated fully with the Antitrust Division’s inquiry” and “resolved the matter” without facing any charges or having to admit of fault or wrongdoing. The company also stressed it supports a fair and competitive bidding process in entertainment services. Legends did not respond to a request for comment.
A spokesperson for Leiweke has told media outlets he “has done nothing wrong” and will “vigorously defend himself.” Notably, the statement mentioned that “vertical, complementary business partnerships, like the one contemplated between OVG and Legends, are legal.”
The assertion that “complementary business partnerships” are supported by law is a key indicator of Leiweke’s forthcoming legal defense. Proving bid-rigging can sometimes be difficult if a defendant can offer pro-competitive reasons for coordinating with a rival. For example, Leiweke might argue that the agreement was designed to maximize the quality of the bid, with the rival company agreeing to offer valuable sub-contracting services to OVG if it were selected, and thus public resources were not compromised.
It’s also important to stress that Leiweke and his attorneys could negotiate a plea deal that would result in a shorter prison sentence or no time in prison.
Leiweke has been an influential figure in the sports and entertainment industry for decades. He previously served as CEO of Anschutz Entertainment Group and Maple Leaf Sports and Entertainment.
(This story has corrected the name of OVG in the fourth paragraph.)
