Oak View Group CEO Tim Leiweke was indicted connected a national transgression conspiracy complaint related to allegedly rigging a bid to develop, manage, and run the University of Texas' hoops and amusement arena successful Austin, the Department of Justice said Wednesday.
Oak View Group, which volition wage $15 cardinal successful penalties successful transportation with the allegations, aboriginal Wednesday said that Leiweke "will modulation from the presumption of CEO to" vice president of the amusement venue giant's committee of directors, and stay a shareholder.
Leiweke, 68, is accused successful the indictment of conspiring with different would-be bidder connected UT's $338 cardinal Moody Center arena task to induce that 2nd institution successful February 2018 to driblet retired of the contention with Oak View Group successful speech for receiving lucrative subcontracts astatine the 15,000-seat arena.
CNBC has been told the 2nd institution was Legends Hospitality, a New York-based venue services institution that is majority-owned by Sixth Street Partners, and whose number owners see the New York Yankees and the Dallas Cowboys.
Oak View Group CEO Tim Leiweke attends the groundbreaking ceremonial for the caller University of Texas lawsuit facility, the "Moody Center" connected December 3, 2019 successful Austin, Texas.
Gary Miller | Getty Images
The indictment successful U.S. District Court successful Austin says that Leiweke aboriginal reneged connected that committedness to the 2nd institution aft it dropped its effort to bid connected the full project.
"The arena opened to the nationalist successful April 2022, and OVG continues to person important revenues from the task to date," the Department of Justice said Wednesday.
Leiweke "rigged a bidding process to payment his ain institution and deprived a nationalist assemblage and taxpayers of the benefits of competitory bidding," said Assistant Attorney General Abigail Slater of the DOJ's Antitrust Division, successful a statement.
Leweike, successful a 2022 interrogation with CNBC, said that the Moody Center was 1 of his company's "two astir palmy arenas."
The DOJ besides said Wednesday that Oak View Group and Legends agreed to wage $15 cardinal and $1.5 million, respectively, successful penalties "in transportation with the behaviour alleged successful the indictment against Leiweke."
Oak View Group's website says that the institution manages 400 sports, amusement and different venues.
FILE PHOTO: An wide presumption of the Moody Center, location of the Texas Longhorns, successful Austin, Texas connected December 1, 2022.
Porter Binks | Getty Images
Lewieke, who is charged with 1 number of conspiracy to restrain trade, is the erstwhile CEO of Maple Leaf Sports and Entertainment. Before that, helium served arsenic CEO of Anschutz Entertainment Group.
He faces a maximum imaginable condemnation if convicted of 10 years successful situation and a $1 cardinal fine.
"The good whitethorn beryllium accrued to doubly the summation derived from the transgression oregon doubly the nonaccomplishment suffered by the victims of the transgression if either magnitude is greater than the statutory maximum fine," the DOJ noted.
A spokesperson for Leiweke, successful a connection to CNBC, said, "Mr. Leiweke has done thing incorrect and volition vigorously support himself and his well-deserved estimation for fairness and integrity."
"The Antitrust Division's allegations are incorrect connected the instrumentality and the facts, and the lawsuit should ne'er person been brought," the spokesperson said. "The instrumentality is clear: vertical, complementary concern partnerships, similar the 1 contemplated betwixt OVG and Legends, are legal."
"These allegations blatantly disregard established ineligible precedent and question to criminalize communal teaming efforts that are proven to heighten contention and payment the public. The Moody Center is simply a cleanable example, arsenic it has resulted successful important and sustained benefits to the University of Texas and the City of Austin."
Leiweke, successful his ain statement, said, "While I'm pleased the institution has resolved its Department of Justice Antitrust Division enquiry without immoderate charges filed oregon admittance of wrongdoing, the past happening I privation to bash is distract from the accomplishments of the squad oregon gully absorption distant from executing for our partners, truthful the Board and I decided that present is the close clip to instrumentality the succession program that was already underway and modulation retired of the CEO role.
Oak View Group, successful a statement, said, "Oak View Group cooperated afloat with the Antitrust Division's enquiry and is pleased to have resolved this substance with nary charges filed against OVG and nary admittance of responsibility oregon wrongdoing."
"We enactment each efforts to guarantee a just and competitory situation successful our manufacture and are committed to upholding industry-leading compliance and disclosure practices," Oak View Group said.
CNBC has requested remark from Legends.
Chris Granger, who was president of Oak View Group's part OVG360, has been appointed arsenic interim CEO of Oak View Group by the company's board.
Granger antecedently was radical president for sports and amusement of the Detroit Tigers and Detroit Red Wings, and president and main operating serviceman of the Sacramento Kings.
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