The former president and CEO of Maple Leaf Sports and Entertainment, Tim Leiweke, has been indicted by a U.S. federal grand jury after he allegedly conspired to rig the bidding process for an arena at a Texas university.
The U.S. Department of Justice’s Antitrust Division announced the indictment on Wednesday.
Leiweke, who is the CEO of the Oak View Group (OVG), allegedly conspired with the head of a company planning to make a competing bid between Feb. 2018 and June 2024 to tamper with the process for the development, management and use of a multi-purpose arena at a public university in Austin, Texas, the authorities say.
Leiweke, who left MLSE in 2015, has been charged with violation of Section 1 of the Sherman Act and if convicted, could face a maximum penalty of 10 years in prison and a US$ 1 million fine.
“As outlined in the indictment, the defendant rigged a bidding process to benefit his own company and deprived a public university and taxpayers of the benefits of competitive bidding,” Assistant Attorney General Abigail Slater of the DOJ Antitrust Division said in Wednesday’s news release.
The indictment alleges that in Sept. 2017 Leiweke informed colleagues that he had learned another company was bidding against Oak View for the arena and that he wanted to “find a way to get [the competitor] some of the business” and “get them to back down.”
Months later, Leiweke allegedly told others that he was more than happy to talk to the competitor about not bidding and “receiving certain subcontracts” but had “no interest in working with them if they intend on putting in a bid.”
In Feb. 2018, Leiweke allegedly reached an agreement with the competitor not to submit a bid for the arena and in exchange, he represented that the competitor would receive subcontracts for the project.
The DOJ said OVG ultimately submitted the sole bid and won the project. The arena opened in April 2022 and “OVG continues to receive significant revenues from the project to date,” officials said.
“Timothy Leiweke allegedly led a scheme designed to steer the contract for entertainment services at a public university’s arena to his company. Public contracts are subject to laws requiring an open and competitive bid process to ensure a level playing field,” said Assistant Director in Charge Christopher G. Raia of the FBI New York Field Office.
“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.”
According to the news release, OVG and Legends Hospitality have agreed to pay US$15 million and $1.5 million in penalties in connection with the allegations in the indictment.
A spokesperson for Leiweke, in a statement, maintained that the executive has done nothing wrong and vowed to vigorously defend himself.
“The Antitrust Division’s allegations are wrong on the law and the facts, and the case should never have been brought. The law is clear: vertical, complementary business partnerships, like the one contemplated between OVG and Legends, are legal,” said spokesperson Amelia Fogg.
“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.”
In a separate statement, OVG said it cooperated fully with the DOJ’s inquiry and “is pleased to resolve this matter with no charges” against the company 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. We are proud of the partnerships we’ve built, and remain committed to continuing to offer exceptional hospitality and holistic venue management solutions and venue development expertise which deliver value to our venue partners, fellow service providers, and the communities and customers we serve,” OVG said.
