The new agreement was made two months after the New Year's Day Cotton Bowl Classic decided to relocate to Arlington beginning in 2010, which freed up $700,000 for the city of Dallas to use in persuading OU and Texas to stay.
OU and Texas now each receive $850,000 in direct annual subsidy from the city of Dallas beginning this year, up from $250,000.
In 2012, the subsidy will be bumped to $1 million for each team.
The increase in stadium capacity will increase ticket revenues for both schools as well.
McKoy said even though retaining OU-Texas was the Cotton Bowl's top priority, he's hoping the renovations will eventually lure other marquee regular-season games to the stadium during the fair.
"Even though this is going to be a great recruiting tool for us, we wanted to do this for OU and Texas,” McKoy said. "If we never secure another game, for us it was well worth it.”