A high-profile executive, Timothy J. Leiweke, the co-founder and CEO of Oak View Group (OVG), is facing federal charges related to an alleged conspiracy to manipulate the bidding process for the Moody Center, a $338 million arena located in Austin, Texas. The indictment alleges that Leiweke orchestrated a scheme to ensure OVG secured the contract for the development, management, and operation of the venue.
The U.S. Department of Justice announced the indictment, outlining the charges against Leiweke and the alleged scheme that unfolded between approximately February 2018 and June 2024. The accusations center around Leiweke's purported efforts to stifle competition and guarantee OVG's success in securing the lucrative contract.
Allegations of Collusion
According to the indictment, Leiweke allegedly contacted the CEO of a competing venue-services company with the intent of persuading them to withdraw their bid for the Moody Center project. The alleged motivation behind this was to eliminate competition and pave the way for OVG to submit the sole qualified bid.
Further details revealed that in September 2017, Leiweke reportedly told colleagues that he had learned of a rival company planning to bid on the arena project. He purportedly expressed a desire to find a way to involve the competitor in the project, essentially offering them a piece of the pie in exchange for withdrawing their competitive bid. This, in essence, was to "get them to back down," as stated in a press release related to the case.
The indictment claims that Leiweke indicated that the competitor would receive subcontracts related to the Moody Center project in return for their agreement to not submit a competing bid. As a result, the competitor allegedly complied with the agreement and refrained from submitting a bid.
OVG's Sole Bid and Continued Revenue
With the competitor out of the running, OVG submitted what officials described as the sole qualified and winning bid for the Moody Center project. The arena officially opened its doors in April 2022, and OVG has reportedly been receiving "significant revenues" from the project since its launch. The exact financial details of OVG's earnings from the Moody Center remain undisclosed.
Penalties and Settlements
In connection with the allegations against Leiweke, Oak View Group and Legends Hospitality have agreed to pay penalties of $15 million and $1.5 million, respectively. These penalties are related to the conduct alleged in the indictment against Leiweke.
Potential Consequences for Leiweke
If convicted on the charges, Leiweke faces a maximum penalty of 10 years in prison and a $1 million criminal fine. The actual sentence, if he is convicted, will be determined by a federal district court judge.
Oak View Group's Response
Oak View Group issued a statement asserting that it "cooperated fully" with the Antitrust Division's inquiry. The company also stated that it was "pleased to have resolved this matter with no charges filed against OVG and no admission of fault or wrongdoing."
The statement continued, "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."
University of Texas's Silence
The University of Texas, the institution that owns the Moody Center, declined to comment on the matter.
Oak View Group's Former Role in Dallas
Prior to this indictment, Oak View Group had a significant presence in Dallas, Texas, managing Fair Park. The City of Dallas hired OVG in 2019 to manage the park. However, in June, the City of Dallas announced that it was taking over day-to-day operations at Fair Park and canceling its contract with Oak View Group. The decision to terminate the contract followed months of unsuccessful mediation.
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