LAWRENCE — The University of Kansas is negotiating contracts for management of Jayhawk sports venues and the Gateway retail district adjacent to renovated Memorial Stadium with a company whose CEO was indicted for allegedly rigging bids to operate a University of Texas arena.
The U.S. Department of Justice says a grand jury returned the indictment against Tim Leiweke, co-founder of Oak View Group. It’s a Denver company that develops and provides services to entertainment venues. He was charged with one count of conspiracy to restrain trade.
Leiweke resigned as Oak View Group’s CEO after announcement of the indictment July 9. He could be sentenced to 10 years in prison and fined $1 million. The Department of Justice said Oak View Group agreed to pay a $15 million penalty.
Abigail Slater, assistant U.S. attorney general for the Justice Department’s antitrust division, said the case illustrated a commitment to holding accountable “executives who cheat to avoid competition.”
“The defendant rigged a bidding process to benefit his own company and deprived a public university and taxpayers of the benefits of competitive bidding,” Slater said.
KU’s ties to Oak View
Joe Monaco, associate vice chancellor for public affairs at KU, said the university hadn’t signed a final contract with Oak View Group but had been working with the company through a series of temporary agreements. In April 2024, KU announced a partnership with Oak View Group that established a framework for negotiating a multiyear deal.
At this point, Monaco said, KU had a short-term agreement with Oak View Group for food and beverage services at sports events. KU had yet to sign a preliminary agreement with Oak View Group to operate Memorial Stadium and the Gateway District, he said.
Monaco said university officials started a review of its procurement process for projects associated with Oak View Group.
“We have been in communication with OVG and expect to meet with the OVG leadership team in the days ahead,” Monaco said. “That said, at this time, there is no indication of any irregularities related to our procurement process that would affect our ongoing negotiations with OVG.”
The Gateway project could include a conference facility, hotel, retail space and entertainment areas to create a yearround economic hub at the renovated football stadium. KU chancellor Doug Girod said the Gateway development would enable KU to host large meetings and events while providing the football program with resources to “compete at the highest level.”
When the initial agreement with Oak View Group was announced by KU, athletics director Travis Goff said he was excited to partner with the “proven and innovative team” at Oak View Group.
“A generational project like this requires best-in-class partnerships, and that is what this relationship reflects,” Goff said.
Alleged collusion
The Department of Justice alleged Leiweke orchestrated a conspiracy in 2017 and 2018 to collude with a business rival to land the contract to develop, manage and operate UT’s basketball and entertainment arena in Austin.
Federal prosecutors said Leiweke’s goal was to convince Legends Hospitality not to submit a bid on UT’s Moody Center contract in exchange for Oak View Group steering lucrative subcontracts to Legends. In 2018, the indictment said, Leiweke ultimately reached an agreement in which Legends would stand down and neither submit nor join a competing bid for the UT arena project.
Oak View Group ended up the lone qualified bidder and won the UT contract. Oak View Group and Legends later clashed about implementation of their secret arrangement.
In 2019, court documents show, an executive at Legends sent Oak View Group an email that said Oak View Group was unfairly demanding Legends perform premium seating and concessions services at UT at “well-below-market rates.”
“We expect to get what we bargained for by standing down on pursuing the (UT arena project) based on your representations,” the Legends email to Oak View Group said. “If you subsequently choose to go another route with one of our competitors, then we will have relied on your representations to our detriment.”
While Legends was squeezed out at UT, Oak View Group has continued to receive significant revenue from the university arena that opened in 2022.
The Justice Department entered a “non-prosecution” agreement with Legends in June. The pact says the federal government wouldn’t pursue criminal or civil actions against the company or its employees in exchange for “full cooperation in the investigation.”
Legends consented to pay a $1.5 million penalty for involvement in allegedly illegal acts leading to Leiweke’s indictment, the Justice Department said.
‘Did nothing wrong’
Justin Simmons, U.S. attorney for the Western District of Texas, said prosecution of bid-rigging cases was important to making a level playing field for awarding public contracts.
“Unfair business practices, like those employed here, make it very difficult for the American people to pursue prosperity like our founders intended,” Simmons said.
However, Sports Business Journal published a statement issued on Leiweke’s personal behalf that said: “Mr. Leiweke has done nothing wrong and will vigorously defend himself and his well-deserved reputation for fairness and integrity.”
The statement said the Justice Department’s antitrust division was “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,” the statement said. “These allegations blatantly ignore established legal precedent and seek to criminalize common teaming efforts that are proven to enhance competition and benefit the public.”
Documents released in conjunction with Leiweke’s indictment indicated Oak View Group’s venue-management arm, OVG360, received $20 million in 2022 and $7.5 million annual payments from Live Nation Entertainment-owned Ticketmaster in exchange for urging its venue clients to sign exclusive ticket contracts with Ticketmaster.
“As a fiduciary to the owners of certain venues it manages, OVG360 was required to disclose material information, including potential conflicts of interest,” the Justice Department document said.
In 2024, the Justice Department and dozens of state and district attorneys general filed an antitrust lawsuit against Live Nation and Ticketmaster alleging “monopolization and other unlawful conduct that thwarts competition in markets across the live entertainment industry.”
