By John Tyrrell and Kendal Hutchings, of Ricci Tyrrell Johnson & Grey
A contentious litigation and operations conflict between the Dallas Mavericks (“Mavericks”) of the National Basketball Association and the Dallas Stars (“Stars”) of the National Hockey League received significant clarity from the Texas Business Court’s rulings on April 2, 2026, which decided various competing motions. The conflict stems from the teams’ joint use of the American Airlines Center (“AAC”) through the Mavericks and Stars’ fifty-fifty joint venture company Center Operating Company, LP (“COC”), which contracted with the City of Dallas to operate and use AAC for the teams’ respective home games. While the Mavericks appear to have gained control of AAC because of the rulings, what will happen next is still not certain. After the rulings, the Mavericks dismissed related claims for money damages made in the same suit, and a final resolution through settlement may be in the future.
On April 2, 2026, in Dall. Sports Grp., LLC v. DSE Hockey Club, L.P., 2026 Tex. Bus. 15 (1st Division), 2026 TXBC LEXIS 17, Judge Bill Whitehill of the Texas Business Court authored an opinion holding that the Mavericks permissibly redeemed the Stars’ fifty percent interest in their joint venture, COC, thereby allowing the Mavericks to gain legal control over COC and the AAC arena.
The Mavericks alleged the Stars violated a Franchise Agreement with the City of Dallas requiring its headquarters to be located within Dallas. Since 1999, the Stars and the Mavericks have shared use of AAC for their respective home games through: (a) the COC Agreement; (b) the Stars’ Franchise Agreement with Dallas; (c) the Mavericks Franchise Agreement with Dallas; and (d) the Center GP Agreement[1]. These four contracts, which were executed over a one-year period in 1999, are a part of an arrangement whereby Dallas issued bonds to finance the construction of the arena.
Each of the franchise agreements contains a “Location Commitment” requiring that “. . . the Owner shall continuously designate the City as the location (a) in which the Home Games shall be played, and (b) in which the principal corporate and executive offices of the Team shall be maintained.” (Opinion, p. 6)[2]
With these commitments to the City of Dallas, the COC and Center GP agreements contained Relocation Events clause(s) providing that if a Relocation 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. Either way, the redeeming party must pay the redeemed party $100 for the partnership interest and $10 for the general partner membership interest. A Relocation Event occurs if, before 2031, a party breaches its Location Commitment to Dallas. (Opinion, p. 7)
Both parties alleged that the other had a Relocation Event(s). The Mavericks argued that the Stars became a Relocation Partner, triggered no later than 2023, when the Stars moved their administrative offices and facilities to Frisco, Texas. The Stars contended that the Mavericks were in breach of its Location Commitment because the Mavericks’ principal office address was changed to Las Vegas, NV.
On October 25, 2024, the Mavericks delivered a letter to the Stars stating that a Stars’ Relocation Event had occurred and the Mavericks were causing COC and Center GP to redeem the Stars’ interests in those entities. The Mavericks tendered $100 and $10 in cash, per the agreements. The Stars rejected the Mavericks’ purported redemptions. The City of Dallas also sent the Stars an October 3, 2025 letter discussing the Stars’ Location Commitment default. (Opinion, p. 8).
The Mavericks brought suit pleading two counts. First, the Mavericks requested a declaratory judgment that (i) they caused a redemption of the Stars’ COC and Center GP ownership interests; (ii) the Mavericks became both entities’ sole owner; (iii) the Stars’ Center GP board members are deemed to have resigned; and (iv) the Mavericks have sole authority to designate their replacements. Second, the Mavericks pled a tortious interference claim asserting that the Stars’ refusal to acknowledge the redemptions, and the termination of the Stars’ board positions, tortiously interferes with the Mavericks’ contractual right to approve necessary arena expenditures[3]. (Opinion, p. 9)
The Stars answered, pled affirmative defenses, and asserted a declaratory judgment counterclaim.
The Texas Business Court found in favor of the Mavericks on essentially all issues. The Court concluded that as a matter of law, 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. Further the evidence conclusively establishes that at all relevant times the Mavericks have complied with this requirement—and the Stars have not. (Opinion, p.4)
Judge Whitehill ruled that as a matter of unambiguous contract construction, the Stars’ failure to designate and maintain their Team’s principal and corporate offices in Dallas breached their Location Commitment to Dallas. The Mavericks did not breach their commitment because it maintained the Team office in Dallas, while its Owner’s offices were based in Las Vegas.
Among the additional rulings by Judge Whitehall were:
- The parties must have contemplated and established a method to permit redemptions and avoid a deadlock where the Stars could otherwise effectively block a redemption by refusing to accept it taking place. (Opinion, p. 40)
- The Maverick’s declaratory judgment claim was not barred by a 4-year statute of limitations for breach of contract actions. The Court held that even though the Stars placed their Team offices outside of Dallas for more than 4 years before suit was brought, the declaratory judgment cause of action did not accrue until 2024 when the Stars refused to recognize the asserted redemptions (Opinion, p. 43).
- The declaratory judgment action was not barred by the “original impossibility doctrine” based on the fact the Stars essentially violated their Location Commitment at all times since they signed their franchise agreement. The Court found this argument ignores that the Stars could have avoided redemption by moving to Dallas. (Opinion, p. 46).
- The Mavericks’ twenty-plus years of inaction while the Stars’ offices were not in Dallas did not amount to a waiver, especially given the existence of nonwaiver clauses in the COC and Center GP agreements. (Opinion, p. 58).
Part of the background of the dispute between the teams is a contention by the Mavericks and City of Dallas that the Stars halted a deal to refurbish AAC. Fans of both sports franchises now wait to see the interrelated futures of AAC, the Mavericks, and the Stars.
John Tyrrell is the Managing Member of Ricci Tyrrell Johnson & Grey and the head of its Sports and Event Liability practice -www.rtjglaw.com
Kendal Hutchings is an associate and member of the Sports and Event Liability Practice team at RTJG.
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The Center GP agreement establishes the General Partner of COC, also owned fifty-fifty by the teams. ↑
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Opinion page citations refer to the original Opinion and Order on Combined Summary Judgment Motions. ↑
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The Mavericks dismissed the tortious interference claims shortly after Judge Whitehill’s opinion was issued. ↑
