Tim Leiweke, the co-founder of venue administration and improvement firm Oak View Group, is stepping down from the corporate after the Division of Justice‘s antitrust division indicted him on Wednesday over allegations of bid-rigging to safe the event of the Moody Heart in Austin, Texas.
The DOJ stated Wednesday that it had charged Leiweke with a violation of Part 1 of the Sherman Act, which if convicted carries a most 10-year jail sentence and a nice of $1 million. Within the indictment, the DOJ alleges that Leiweke had conspired with the CEO of rival firm Legends Hospitality from February 2018 by a minimum of June 2024 over the event of the Moody Heart on the College of Texas.
“Mr. Leiweke has carried out nothing improper and can vigorously defend himself and his well-deserved status for equity and integrity,” a spokesperson for Leiweke stated in a press release. “The Antitrust Division’s allegations are improper on the legislation and the info, and the case ought to by no means have been introduced. The legislation is obvious: vertical, complementary enterprise partnerships, just like the one contemplated between OVG and Legends, are authorized. These allegations blatantly ignore established authorized precedent and search to criminalize frequent teaming efforts which can be confirmed to reinforce competitors and profit the general public. The Moody Heart is an ideal instance, because it has resulted in substantial and sustained advantages to the College of Texas and the Metropolis of Austin.”
On Wednesday, OVG confirmed that Leiweke would transition from CEO to vice chairman of OVG’s board of administrators, and that he would nonetheless be a shareholder within the firm. OVG360 president Chris Granger will step in as interim CEO.
Because the DOJ states, in September 2017, Leiweke advised a number of colleagues that Legends was “bidding towards us” to win the contract for the brand new area, and that he’d “get them to again down” and “discover a technique to get [the competitor] a number of the enterprise.” Leiweke subsequently stated in November 2017 that he was “more than pleased speaking to [the competitor] about not bidding and [receiving certain subcontracts]” in return, however he additionally stated he had “no real interest in working with them in the event that they intend on placing in a bid” on the sector.
By February 2018, the DOJ stated, Leiweke “finally reached an settlement with the competitor’s CEO, pursuant to which the competitor agreed that it could stand down and neither submit nor be a part of an unbiased competing bid for the Area Undertaking.” In alternate for the competitor’s settlement to face down, Leiweke represented that the competitor would obtain Area Undertaking’s subcontracts. In step with the bid-rigging settlement, the competitor didn’t submit a competing bid for the Area Undertaking. OVG finally submitted the only certified bid and gained the Area Undertaking.
“As outlined within the indictment, the Defendant rigged a bidding course of to learn his personal firm and disadvantaged a public college and taxpayers of the advantages of aggressive bidding,” Assistant Lawyer Common Abigail Slater, who leads the Justice Division’s Antitrust Division, stated in a press release. “The Antitrust Division and its legislation enforcement companions will proceed to carry executives who cheat to keep away from competitors accountable.”
U.S. legal professional Justin Simmons for the Western District of Texas stated in a press release that “unfair enterprise practices, like these employed right here, make it very troublesome for the American individuals to pursue prosperity like our founders meant.”
Leiweke co-founded Oak View Group alongside trade titan Irving Azoff again in 2015. The corporate has since turn out to be probably the most highly effective venue improvement corporations within the trade, with fingers in main developments just like the Local weather Pledge Area in Seattle, Acrisure Area in Palm Springs and the UBS Area in New York. This isn’t the primary time Leiweke has been concerned in a DOJ inquiry within the reside music enterprise, as emails he’d despatched had been included within the DOJ’s civil grievance towards Dwell Nation final yr. (Neither Leiweke nor OVG had been named as defendants in that go well with.)
Oak View Group and Legends each agreed to pay penalties of $15 million and $1.5 million in penalties and weren’t formally accused of wrongdoing themselves within the DOJ’s indictment. A consultant for Legends didn’t instantly reply to a request for remark. In a press release on Wednesday, OVG stated the corporate “cooperated totally with the Antitrust Division’s inquiry and is happy to have resolved this matter with no costs filed towards OVG and no admission of fault or wrongdoing.”
In OVG’s announcement of the management change, Leiweke referred to as it “my nice honor to assist discovered and lead OVG because it has grown into the particular, customer-oriented firm it’s at present.”
“Whereas I’m happy the corporate has resolved its Division of Justice Antitrust Division inquiry with none costs filed or admission of wrongdoing, the very last thing I wish to do is distract from the accomplishments of the staff or draw focus away from executing for our companions,” Leiweke stated. “So the Board and I made a decision that now’s the best time to implement the succession plan that was already underway and transition out of the CEO function. In my new function as Vice Chairman of the Board and as an OVG shareholder, I stay as dedicated as ever to the long-term success of the corporate, and I do know OVG, our valued companions and our prospects are in nice fingers with Chris and the remainder of our stellar leaders.”