Oak View Group co-founder Tim Leiweke looks over the construction on the New York Islanders new UBS Arena, Oct. 7, 2020. Leiweke has been indicted by the U.S. Department of Justice for allegedly conspiring to rig the bidding process for an arena at a Texas university as CEO of Oak View.Kathy Willens/The Associated Press
The former head of Maple Leaf Sports and Entertainment Ltd. is contesting U.S. Department of Justice allegations that he conspired with a competitor to rig the bidding for an arena at a Texas university, saying that having discussions with another company about a business partnership is not illegal.
Tim Leiweke, who co-founded live-event and hospitality company Oak View Group after leaving MLSE in 2015, was charged Wednesday with orchestrating a conspiracy to rig a competitive bidding process to develop and manage the Moody Center, a multipurpose arena on the University of Texas grounds in Austin.
Oak View Group owns or manages about 400 venues, according to its website, including 19 across Canada. Among its properties, it owns and operates the TD Coliseum arena – set to reopen this fall after extensive renovations – and the FirstOntario Concert Hall, both of which are in Hamilton.
The company announced Wednesday that Mr. Leiweke was stepping down as chief executive officer, but would remain a shareholder and vice-chair of the board.
Ellen Davis, a spokesperson for Mr. Leiweke, denied any wrongdoing and said he 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,” Ms. Davis said in an e-mailed statement.
The statement said the law clearly allows “vertical, complementary business partnerships” like the one Mr. Leiweke discussed with live-events company Legends Hospitality.
“These allegations blatantly ignore established legal precedent and seek to criminalize common teaming efforts that are proven to enhance competition and benefit the public,” it said.
The indictment alleges that Mr. Leiweke conspired with the CEO of Legends Hospitality to rig the bidding for the Moody Center “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 Justice Department’s antitrust division said in a news release.
According to the release, the indictment alleges that Mr. Leiweke informed colleagues he had learned that Legends Hospitality was bidding against Oak View Group in 2017 for the Moody Center project.
It alleges that Mr. Leiweke reached an agreement with Legends’s CEO to give it the arena project’s subcontracts in exchange for not bidding. The news release does not state whether Oak View Group ultimately gave subcontracts to Legends and, if it did, what those contracts were.
The indictment does not name the Legends CEO. The company’s website states Shervin Mirhashemi held the role from 2017 to 2024.
In the end, Oak View Group was the sole qualified bid for the project and won. The Moody Center opened to the public in April, 2022, and the company continues to “receive significant revenues” from it, according to the DOJ.
If convicted, Mr. Leiweke faces a maximum of 10 years in prison and a US$1-million fine, although the fine could increase to reflect the gain derived from the alleged crime, or the loss to its victims.
Oak View Group separately consented to pay US$15-million in an agreement in connection with the bid-rigging allegations. Legends Hospitality paid a penalty of US$1.5-million.
In a public statement, Oak View Group said it co-operated with the Justice Department’s antitrust division in its inquiry and resolved the matter with no charges against the company, or any admission of wrongdoing.
Chris Granger was tapped to fill Mr. Leiweke’s former role as interim CEO. Mr. Granger is the president of OVG360, a branch of Oak View Group focused on sports, live entertainment and hospitality.
Before co-founding Oak View Group, Mr. Leiweke was the president and CEO of Maple Leaf Sports and Entertainment, which owns prominent Toronto sports teams including the Toronto Maple Leafs and the Toronto Raptors. He left that position in 2015, after two years at the helm.