Oak View Group CEO Leiweke leaves post after bid rigging charge on UT arena project

Oak View Group CEO Tim Leiweke has been indicted on a federal criminal conspiracy charge related to allegedly rigging a bid to develop and operate the University of Texas' basketball arena in Austin

Oak View Group and sports venue giant Legends Hospitality agreed to pay $15 million and $1. 5 million in penalties "in connection with the conduct alleged in the indictment," the DOJ said

Legends is majority-owned by Sixth Street Partners, and its minority owners include the New York Yankees and the Dallas Cowboys

Watch now1:0801:08DOJ indicts Oak View Group CEO Tim Leiweke over alleged role in bid rigging schemeMoney MoversOak View Group CEO Tim Leiweke was indicted on a federal criminal conspiracy charge related to allegedly rigging a bid to develop, manage, and operate the University of Texas' basketball and entertainment arena in Austin, the Department of Justice said Wednesday

Oak View Group, which will pay $15 million in penalties in connection with the allegations, later Wednesday said that Leiweke "will transition from the position of CEO to" vice chairman of the entertainment venue giant's board of directors, and remain a holder

CNBC has been told the second company was Legends Hospitality, a New York-based venue services company that is majority-owned by Sixth Street Partners, and whose minority owners include the New York Yankees and the Dallas Cowboys

Oak View Group CEO Tim Leiweke attends the ground ceremony for the new University of Texas event facility, the "Moody Center" on December 3, 2019 in Austin, Texas

Gary Miller | Getty ImagesThe indictment in U

District Court in Austin says that Leiweke later reneged on that mise to the second company after it dropped its effort to bid on the entire ject. "The arena opened to the public in April 2022, and OVG continues to receive significant revenues from the ject to date," the Department of Justice said Wednesday

Leiweke "rigged a bidding cess to benefit his own company and deprived a public university and taxpayers of the benefits of competitive bidding," said Assistant Attorney General Abigail Slater of the DOJ's Antitrust Division, in a statement

Leweike, in a 2022 interview with CNBC, said that the Moody Center was one of his company's "two most successful arenas. "The DOJ also said Wednesday that Oak View Group and Legends agreed to pay $15 million and $1. 5 million, respectively, in penalties "in connection with the conduct alleged in the indictment against Leiweke. "Oak View Group's website says that the company manages 400 sports, entertainment and other venues

Porter Binks | Getty ImagesLewieke, who is charged with one count of conspiracy to restrain trade, is the former CEO of Maple Leaf Sports and Entertainment

Before that, he served as CEO of Anschutz Entertainment Group

He faces a maximum possible sentence if convicted of 10 years in prison and a $1 million fine. "The fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine," the DOJ noted

A spokesman for Leiweke, in a statement to CNBC, said, "Mr

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," the spokesman said. "The law is : vertical, complementary partnerships, the one contemplated between OVG and Legends, are legal. ""These allegations blatantly ignore established legal precedent and seek to criminalize common teaming efforts that are ven 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. "Leiweke, in his own statement, said, "While I'm pleased the company has resolved its Department of Justice Antitrust Division inquiry without any charges filed or admission of wrongdoing, the last thing I want to do is distract from the accomplishments of the team or draw focus away from executing for our partners, so the Board and I decided that now is the right time to implement the succession plan that was already underway and transition out of the CEO role

Oak View Group, in a statement, said, "Oak View Group cooperated fully with the Antitrust Division's inquiry and 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," Oak View Group said

CNBC has requested from Legends

Granger previously was group president for sports and entertainment of the Detroit Tigers and Detroit Red Wings, and president and chief operating officer of the Sacramento Kings.