Arena Builder Tim Leiweke Who Proposed NBA-Ready Venue In Las Vegas Indicted For Bid-Rigging In Texas; Leiweke Steps Down As Oak View Group CEO
By Alan Snel, LVSportsBiz.com Publisher-Writer
LAS VEGAS, Nevada — Arena builder Tim Leiweke’s aim to build an NBA arena in Las Vegas took a major hit this week when a federal grand jury returned an indictment against Oak View Group co-founder/CEO Leiweke “for orchestrating a conspiracy to rig the bidding process for an arena at a public university in Austin, Texas,” the U.S. Justice Department’s Antitrust Division said.
The Justice Department said the indictment, filed in the U.S. District Court for the Western District of Texas, alleges from about Feb. 2018 through at least June 2024, Leiweke conspired with the CEO of a competitor to “rig the bidding for the development, management, and use of a multi-purpose arena that was to be located on the campus of a public university in Austin, Texas.”
Leiweke has proposed to build a NBA arena in Las Vegas. He first looked at a potential arena site at the corner of Las Vegas Boulevard and Blue Diamond Road south of the Strip, but moved off that site proposal and has looked at other sites. Leiweke has not submitted any arena plans to Clark County.
The indictment was a big hit to Leiweke’s hopes of building an arena in Las Vegas as he is no longer the CEO of Oak View Group. Leiweke had talked at an economic forum in Las Vegas where he said he will not seek public money to help fund his proposed NBA arena in Las Vegas.
Much has been discussed regarding the NBA’s possible expansion into the Las Vegas market, with Vegas Golden Knights owner Bill Foley saying he’s willing to do a T-Mobile Arena $300 million update to accommodate an NBA team. The NBA is staging its annual 30-team Summer League at Thomas and Mack Center at the UNLV campus this week and next week.
Oak View Group, based in Denver, said Wednesday Leiweke will move from his CEO position to vice chairman of OVG’s board of directors.
Here’s much of the Justice Department press release:
“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,” said Assistant Attorney General Abigail Slater of the Justice Department’s Antitrust Division. “The Antitrust Division and its law enforcement partners will continue to hold executives who cheat to avoid competition accountable.”
“Unfair business practices, like those employed here, make it very difficult for the American people to pursue prosperity like our founders intended,” said U.S. Attorney Justin R. Simmons for the Western District of Texas.
“Timothy Leiweke allegedly led a scheme designed to steer the contract for entertainment services at a public university’s arena to his company. Public contracts are subject to laws requiring an open and competitive bid process to ensure a level playing field,” said Assistant Director in Charge Christopher G. Raia of the FBI New York Field Office. “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.”
According to the indictment, in Sept. 2017, Leiweke informed colleagues that he had learned another venue-services company was “bidding against us” for the arena deal and wanted to “find a way to get [the competitor] some of the business” and “get them to back down.”
In Nov. 2017, Leiweke informed others that he was “[m]ore than happy talking to [the competitor] about not bidding and [receiving certain subcontracts]” but had “no interest in working with them if they intend on putting in a bid.” In Feb. 2018, Leiweke ultimately reached an agreement with the competitor’s CEO, pursuant to which the competitor agreed that it would stand down and neither submit nor join an independent competing bid for the Arena Project. In exchange for the competitor’s agreement to stand down, Leiweke represented that the competitor would receive Arena Project’s subcontracts.
Consistent with the bid-rigging agreement, the competitor did not submit a competing bid for the Arena Project. OVG ultimately submitted the sole qualified bid and won the project. The arena opened to the public in April 2022, and OVG continues to receive significant revenues from the project to date.
OVG and Legends Hospitality have agreed to pay $15 million and $1.5 million in penalties, respectively, in connection with the conduct alleged in the indictment against Leiweke.
Here’s the entire Oak View Group statement in response to the indictment:
LVSportsBiz.com Friday received this statement from a Leiweke spokesman: “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 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 criminalize 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.”
PSA
