The Dallas Mavericks have prevailed over the Dallas Stars in a dispute over control of the American Airlines Center.
Dallas Sports Group, LLC and Radical Arena, Ltd. v. DSE Hockey Club, L.P., et al. L.P. (2026 Tex. Bus. 15; April 2, 2026) arose from a dispute between the Dallas Mavericks and the Dallas Stars over the ownership of Center Operating, L.P., which contracted with the City of Dallas to operate the American Airlines Center. They also co-own the partnership’s general partner, Center GP, LLC. The Mavs claim that they redeemed the Stars’ ownership interests in both entities and that the Stars have since interfered with the Mavs’ right to control the entity. They filed suit for declaratory judgment. The Stars moved for summary judgment. The question before the court was “whether the parties’ ‘Location Commitments’ require that the ‘Teams’’ principal, public-facing presence be in Dallas, Texas?”
In a 91-page opinion by Judge Whitehill, the court concluded “as a matter of law that the Location Commitments have only one reasonable meaning: ‘Owners’ are required to designate and maintain in Dallas the principal corporate and executive offices of their respective ‘Team,’ rather than the ‘Owner’s’ own such offices.” And according to the court, “the evidence conclusively establishes that at all relevant times the Mavs have complied with this requirement—and the Stars have not.” The court thus denied the Stars’ MSJ and granted the Mavs’ declaratory judgment and affirmative defenses motions. The Mavs’ remaining tortious interference claim remains pending and is set for trial on May 11.
Judge Whitehill’s decision turned on the construction of four agreements, the teams’ franchise agreements with the city, the COC limited partnership agreement, and the Center GP company agreement. Under these agreements, the city issued bonds to finance the construction of the AA Center, where the Mavs and Stars play their home games pursuant to a lease between COC and Dallas. The teams’ franchise agreements require the owner of each team to “continuously designate” Dallas as the location in which home games must be played and in which “the principal corporate and executive offices of the Team shall be maintained.” The COC partnership and Center agreements contain “Relocation Events” clauses, providing that if such an event occurs, “(i) the partnership and a general partner may redeem the Relocation Partner’s/Member’s interests in that entity; or (ii) a ‘Remaining Partner/Member’ may cause such redemption.” The agreements further specify that a “Relocation Event” occurs if a party breaches its Location Commitment before the expiration of the AA Center lease in 2031.
The Mavs argued that the Stars triggered the redemption clause no later than 2003 when they moved their administrative offices and practice facilities to Frisco. The Stars responded that the Mavs triggered the redemption clause when Dallas Basketball Limited, in November 2024, identified its principal office and principal place of business as an address in Las Vegas. A few days before the original setting for the parties’ motions, the Stars announced that DSE Hockey Club was not the actual successor to the Stars’ contracting party and that the Mavs sued the wrong party. Both sides filed motions to add Dallas Sports & Entertainment, L.P. tl the case as the “ostensible” Stars’ successor in interest.
Be that as it may, the summary judgment hearing went forward, followed by Judge Whitehill’s opinion. First, the parties disagreed over who could redeem the other’s interest and under what circumstances. Under the agreements, the court observed, “only COC Partnership or Center GP may effectuate redemption, and no individual member may do so. But they do not explain how the Mavericks could accomplish that corporate action where there is a fifty-fifty deadlock.” In other words, the Stars took the position that the Mavs “could never redeem the Stars’ ownership interests over the Stars’ objection—despite express contract clauses giving the Mavericks that right under certain conditions.” The Mavs contended that, reading the agreements in their entirety and in context with their purpose, the agreements permitted them to “cause” redemption without a formal vote of COC (the Mavs sought to effectuate this by sending a letter, and when that failed, by filing a dec action). They argued further that forcing a redemption vote would have been futile because the partners’ voting power was evenly split.
The court determined that the agreements’ provision for direct action by COC’s partners “would produce a deadlock preventing the redemptioons.” It was, therefore, “reasonable for the parties to provide an alternative redemption method.” The agreements provided this alternative when it authorized the parties to “cause” a redemption. If the Stars’ position prevailed, the alternative language in the agreements “would be meaningless” and “lead to the absurd result that the Agreements give the Mavericks the right to cause the redemption without the Stars’ consent and simultaneously give the Stars the power to block the Mavericks from exercising their redemption rights.” The Mavs thus had contractual authority to tender the redemption price by letter. Absent evidence from the Stars that they wouldn’t have vetoed the redemption, the court denied the Stars’ standing motion.
Next up was the Mavs’ alleged relocation to Las Vegas. The court noted that “(1) the franchise agreements distinguished between “Owners” and “Teams, (2) the “Location Commitment” clauses provide that the Owners must designate Dallas as the location of the “Teams”—not the “Owner’s”—principal corporate and executive offices, (3) the Location Commitment’s word “location” indicates the parties’ agreements with Dallas focused on the “Team’s” visible presence in Dallas, (4) the ordinary meaning of ‘designate’ includes conduct that indicates or sets apart an object, (5) the documents on which the Stars rely refer to corporate entities, not the Team; (6) the Mavericks adduced that they at all relevant times physically designated and maintained the “Team’s” principal and corporate offices in Dallas.” In short, the agreements allow the team owners to reside anywhere, but the team itself, consisting of “the players, coaches, trainers, and administrative employees,” must be located in Dallas.
The court “accept[ed] the Maverick’s argument that the word ‘location’ in [the agreements] indicate that the public’s perception of where the Teams are physically located was more important to the overall arrangement than where corporiate entities listed their offices on government filings.” Consquently, the court ruled that “the parties objectively and unambiguously intended for the Commitment Location clauses to mean a physical location in Dallas where (i) the fans would see the Stars and Mavericks play their home games and (ii) the Teams’ offices would have a visible presence to the fans. That conclusion comports with the overall purpose to support Dallas’s bond financing by promoting the Teams in Dallas. And it is the only reasonable interpretation that the contracts permit.” The court thus denied the Stars’ summary judgment motion.
The Stars argued further that the four-year statute of limitations applied to the Mavs’ declaratory judgment claim. They asserted that the Mavs’ cause of action for breach of contract accrued no later than 2003 when the Stars moved to Frisco. The court, however, found credible evidence that “an actual, justiciable controversy” regarding the Mavs’ redemptions didn’t arise until November 1, 2024, when the Stars rejected the Mavs’ redemption letter and refused to recognize the redemptions. So much for the limitations defense. Undeterred, the Stars raised the impossibility defense, arguing that “original impossibility exists because they have continuously violated their Location Commitment since they signed their franchise agreement; thus, it was impossible for them to designate and maintain their offices in Dallas throughout their franchise agreement.” The court didn’t buy this, either, ruling that the Stars failed to provide that they could not have moved the team’s location to Dallas to comply with the agreements. It further denied the Stars’ waiver argument because the agreements with the city precluded “waiver-by-delay in exercising rights or remedies arising from the other side’s breached covenants, duties, agreements, or conditions ….” Additionally, the parties didn’t include an affirmative duty “to redeem or lose their rights” in their contracts with each other.
Moving on to the Mavs’ declaratory judgment action, the court first observed that the evidence conclusively established that the Stars breached their Location Commitment to Dallas by maintaining the team in Frisco. The Mavs contended that the redemption occurred when “they exercised their contract right to cause it by sending the redemption letter,” and that any “ministerial” book-keeping and payments did not create a precondition for redemption. The court agreed with the Mavs. It granted the Mavs’ request for a declaration that they effectively caused a redemption of the Stars’ interests in COC and Center LP and that the Stars’ three directors were terminated from the board. As to the Stars’ argument that the Mavs waited too long to exercise their redemption rights, the agreements non-waiver provision stated otherwise. Moreover, the Stars failed to submit more than scintilla of evidence that the Mavs affirmative conduct either indicated a “manifest intent” to waive their right to delay or an intent no to exercise their redemption rights.
