Dallas’ contract with Major League Soccer team FC Dallas is not generating the revenue it wants, so it is moving on to Atlético Dallas, a new United Soccer League team. The anticipated deal to have the soccer team use the Cotton Bowl stadium and MoneyGram Soccer Park has ruffled feathers.
Dallas City Council’s approval of the deal on Wednesday would trigger the termination of the contract with FC Dallas, which currently manages the MoneyGram soccer complex in northwest Dallas, a potential training site for the FIFA World Cup.
Once the City Council approves the three-year deal with Atlético, officials have to give FC Dallas six months’ notice, according to a memo obtained by The Dallas Morning News. The major league franchise would have the option to still use the fields, but it would have to rent them from Atlético Dallas.
FC Dallas officials said they were caught off guard after The News first reported the city was vying to attract the USL team, especially as they still had four years left on their contract.
“We were in active conversations for negotiating a new deal and an extension, and so, I, by no means, ever thought this was a formal bid process or there was another path that they were seeking,” executive Jimmy Smith said. “I thought we were just working together to work on a 10-year extension.”
Park officials, however, did not see it that way. Officials believe the city has been unable to successfully monetize the premier $31 million soccer complex, which FC Dallas has overseen for 11 years, the memo said. The deal serves a dual purpose: to activate a Fair Park property and bring in new revenue.
Since last year, amid potential budget cuts and delayed maintenance, park officials have been grappling with weak contracts with various entities that operate city properties across the board. Whether it is community pools, boating facilities at White Rock Lake or the future of the city’s 277-acre asset in Fair Park, there has been a push to determine how to generate sufficient revenue to help sustain their operations and upkeep.
“We can also assume that the agreement has been very advantageous to FC Dallas by allowing them to grow their youth clubs and the fees associated with those teams while having a guaranteed-to-be-available premier facility to practice and play games,” John Jenkins, the city’s parks director, said in the memo.
Improvements by FC Dallas at MoneyGram were largely reimbursed by the city, per the contract, the memo states. The city incurred $6.9 million in fees and expenses paid to FC Dallas and in utilities, and earned just over $766,000 in revenues, the memo said.
Behind the scenes, the Frisco-based franchise and park officials were involved in a back-and-forth negotiation to tweak a contract, bolstering the city’s ability to earn additional guaranteed revenue and removing provisions that would have left the city with the bills to maintain the property. “FC Dallas declined to agree to that,” Jenkins said in his memo.
The city anticipates generating a minimum of $1.2 million in revenue over three years with this new deal. The money that will flow into Fair Park is likely to be used to pay off the debt from refurbishing the Cotton Bowl in the short term and may also the needs of neglected century-old buildings. The remaining funds will be allocated to a fund specifically for MoneyGram.
The of the agreement also leave it up to the tenant to cover the cost of lighting two soccer fields at MoneyGram and will allow the city to control five youth athletic fields to host youth soccer leagues.
Dallas is making the deal at the same time the city of Garland is looking to build a 70-acre soccer complex that will serve as the headquarters for Atlético Dallas.
Last week, the Dallas Park Board approved the deal with Atlético Dallas.
Smith, who came to speak in opposition to the item, spoke of the major league team’s commitment to growing the game in North Texas and the hundreds of youth soccer events. Smith said last week the team’s involvement had led to an economic impact of over $50 million and averaged 500,000 attendees annually.
Smith said the city was only able to earn revenue over the last four years after adding offices, training rooms and maintenance facilities to the complex, which was built on a landfill. The city’s original agreement with FC Dallas, dated 2013, provided the team with $400,000 in allowable expenses and a management fee of $100,000 per year. Utility payments related to water and electricity were the city’s responsibility.
Smith said the city removed the provision related to allowable expenses in 2022 and eliminated the management fee in 2024.
FC Dallas President Dan Hunt had also highlighted the team’s more than $10 million investments into the maintenance and development of the northwest Dallas facility.
“I’ve now seen that the deal with Athletico is that 15% of the profits would go back to the city. Our deal, in the original agreement, was 75% of the profits. We go back to the city, and we’ve done that. And for the last four years, we’ve issued payments back to the city,” Smith said.
The City Council will consider the item on June 11.