Tim Leiweke steps down at OVG after DOJ charge

Tim Leiweke has stepped down as Oak View Group (OVG) chief after being charged by the US Department of Justice (DOJ) with orchestrating a conspiracy to rig the bidding process for Austin’s Moody Center.

Leiweke, who denies the allegation, is accused of conspiring with the CEO of a competitor – reportedly New York-headquartered premium experiences specialist Legends – to rig the bidding for the development, management and use of the 15,000-cap multi-purpose arena on the campus of the University of Texas.

OVG, which was founded by Leiweke and ex-Live Nation chair Irving Azoff in 2015, has named OVG360 president Chris Granger as interim CEO.

“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,” says assistant attorney general Abigail Slater of the DOJ’s antitrust division. “The antitrust division and its law enforcement partners will continue to hold executives who cheat to avoid competition accountable.”

The DOJ says that OVG and Legends have agreed to pay $15 million (€12.8m) and $1.5m (€1.3m), respectively, in penalties in connection with the alleged conduct.

“Timothy Leiweke allegedly led a scheme designed to steer the contract for entertainment services at a public university’s arena to his company”

According to the indictment, Leiweke informed colleagues in September 2017 that he had learned another venue services company was “bidding against us” for the scheme and wanted to “find a way to get [the competitor] some of the business” and “get them to back down”.

He allegedly reached an agreement with the competitor’s CEO the following February, whereby the competitor agreed that it would stand down and neither submit nor join an independent competing bid. In exchange, Leiweke is said to have represented that the competitor would receive the arena project’s subcontracts.

Having submitted the sole qualified bid, OVG ultimately won the project and the arena opened in April 2022.

“Timothy Leiweke allegedly led a scheme designed to steer the contract for entertainment services at a public university’s arena to his company,” says assistant director in charge Christopher G. Raia of the FBI New York field office. “Public contracts are subject to laws requiring an open and competitive bid process to ensure a level playing field. 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.”

“The antitrust division’s allegations are wrong on the law and the facts, and the case should never have been brought”

Former AEG and Maple Leaf Sports & Entertainment CEO Leiweke is charged with a violation of Section 1 of the Sherman Act, for which the maximum penalty is ten years in prison and a $1m fine.

In a statement to IQ, a spokesperson for the 68-year-old executive says that Leiweke “has done nothing wrong and will vigorously defend himself and his well-deserved reputation for fairness and integrity”.

“The antitrust division’s allegations are wrong on the law and the facts, and the case should never have been brought,” adds the spokesperson. “The law is clear: vertical, complementary business partnerships, like the one contemplated between OVG and Legends, are legal. These allegations blatantly ignore established legal precedent and seek to criminalise 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.”

Previously addressing the allegations in a note to OVG employees, Missouri-born Leiweke said: “First, as some of you may already know, the DOJ’s antitrust division made formal allegations against me today alleging that more than eight years ago I made an improper agreement with Legends during the selection process for the construction and management of the Moody Center at the University of Texas. It is not true, and I am confident that jurors in Austin will see this case for what it is – wrong on the facts and the law and a misguided attempt to criminalise the lawful, ethical, and procompetitive efforts of complementary businesses joining forces to deliver a compelling proposal.

“The Moody Center is a fantastic project and an indisputable success. OVG won the work on the merits of our qualifications and proposal, and we set the bar for NCAA facilities, transforming live sporting and entertainment events for the University of Texas and the City of Austin. At a time when the current administration is trying to promote American enterprise and innovation, this prosecution is inexplicably trying to stifle them.”

“We support all efforts to ensure a fair and competitive environment in our industry”

He added: “Second, as you know, our mantra has always been to focus completely on our mission and commitment to excellence. The antitrust division’s actions today prevent me from doing that, so I have agreed with our board of directors that now is the right time to implement the succession plan that was already underway and transition from my role as CEO.

“I will continue to serve on our board of directors in the role of vice-chairman and will remain a shareholder of OVG.”

OVG, whose venue portfolio includes Seattle’s Climate Pledge Arena, UBS Arena in New York and Co-op Live in Manchester, UK, says it “cooperated fully” with the inquiry and says it is “pleased to have resolved this matter with no charges filed against OVG 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,” continues a statement by the firm. “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.”

Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.