Jerry Jones’ Legends Hospitality forced to pay $3.5 million in settlement with Justice Department

Legends Hospitality, the global sports facilities company founded by Dallas Cowboys owner Jerry Jones and former New York Yankees owner George Steinbrenner, has reached a settlement in a lawsuit with the Justice Department over alleged antitrust violations in an acquisition.

The lawsuit, filed in the Southern District of New York, alleged that Legends “assumed unlawful control” of facilities management company ASM Global while Legends was trying to take it over. Although the two companies were supposed to look forward to working together, each shared “competitively sensitive information,” according to the complaint filed Monday.

As part of the settlement, Legends must pay a $3.5 million civil penalty, appoint an antitrust compliance officer, file compliance reports with the Department of Justice, and implement antitrust training and compliance programs. The settlement does not include an admission of guilt or wrongdoing by Legends.

Legends has agreed to acquire ASM Global for $2.3 billion in November 2023. The settlement with the Department of Justice in the Legends acquisition clears the way for the company to complete the acquisition soon.

“We are pleased that this matter has been resolved. Moving forward, we are focused on continuing to serve our customers and look forward to closing our agreement with ASM Global this month,” a Legends spokesperson said.

According to the Justice Department lawsuit, the two companies were to operate as separate entities until the acquisition was approved by antitrust agencies.

However, between December 2023 and May 2024, Legends and ASM Global collaborated on unlisted arena bids in California and North Carolina, which would violate the Hart-Scott-Rodino Act (HSR), the lawsuit states.

In August 2023, Legends learned that an unnamed city in North Carolina was planning to issue a request for proposals for the existing arena and other facilities. When that happened, a senior Legends executive asked a former Legends CEO, who was not named in the complaint, if ASM Global could handle it, the complaint said.

“I assume we would prefer ASM handle this?” the executive told the former Legends CEO in an email.

According to the complaint, the former Legends CEO stated he did not want to compete with ASM Global.

“We’ll find out if ASM is making an offer because (we) don’t want both sides to make an offer,” he said. The CEO then set up a calendar reminder for himself to talk to ASM Global executives about the North Carolina proposal, the complaint said.

Shervin Mirhashemi served as CEO of the company from January 2021 to April 2024.

The HSR Act requires certain companies with deals worth more than $50 million to notify the Federal Trade Commission and the DOJ Antitrust Division and file documents about the deal before it closes. It is also intended to give antitrust agencies more time to review mergers and acquisitions.

“The companies must remain separate and independent before they close their merger. Our complaint alleges that Legends failed to meet that obligation,” said Andrew Forman, deputy assistant attorney general in the Justice Department’s Antitrust Division.

Forman said the penalty and other requirements are intended to further improve law enforcement.

“The proposed settlement requires Legends to pay a significant civil penalty and imposes significant obligations to ensure that Legends complies with the law in the future,” he said. “I commend our excellent investigative teams who remain vigilant in trying to ensure there is no improper coordination between the parties prior to closing.”

Jerry Jones and the Dallas Cowboys own less than 25% of the Legends. San Francisco-based investment firm Sixth Street owns at least 51% of the company after partially buying out the Cowboys and Yankees, the company’s previous majority owners, for an undisclosed amount in 2021.

At the time, Legends was valued at approximately $1.35 billion.

Although Jones and the Cowboys own a much smaller stake in Legends than before, “America’s Team” is still one of its partners. Other notable partners include the Dallas Stars, the Frisco-based PGA of America, Live Nation and the U.S. Soccer Federation.

The company was founded in 2008 with the backing of banking giant Goldman Sachs and originally sold concessions and merchandise at the then-new sports venues, AT&T Stadium and Yankee Stadium.

Since then, the company has expanded to include SoFi Stadium, Los Angeles Memorial Colosseum, Raymond James Stadium, Golden 1 Center, and many others.