Court ordered FIFA to drop Visa deal

A U.S. court ordered FIFA to drop its planned eight-year sponsorship deal with Visa and awarded MasterCard the advertising and sponsorship rights to the World Cup for the period from 2007 to 2014.

MasterCard Inc. was challenging a FIFA deal to switch sponsorship of the World Cup football tournament to rival Visa International.

Losing the sponsorship of the World Cup, the world's most viewed sports event, would have hurt MasterCard's competitive position against Visa, ruled U.S. District Judge Loretta Preska from Manhattan, N.Y.

Visa, which already sponsors the Olympic Games, is the world's largest credit card system, followed by MasterCard.

"MasterCard's loss of the next FIFA World Cup sponsorship would be, in its now-famous words, 'Priceless,'" the judge wrote, referring to the credit card company's long-running advertising campaign.

MasterCard sued FIFA in April, accusing the football organization of breach of contract over the Visa deal, which was set to begin in January 2007.

MasterCard, which has sponsored the tournament for 16 years, argued that it had a right of first refusal on future sponsorship pacts.

The decision followed a bench trial by the judge. In her ruling, she said FIFA negotiators "lied repeatedly to MasterCard," including when it assured the company that FIFA "would not sign a deal for the post-2006 sponsorship rights with anyone else unless it could not reach agreement with MasterCard."

FIFA said it was "dismayed" by the ruling and it would appeal. It also said it is "convinced that at all times it acted in good faith" and will "vigorously pursue its case."

FIFA, which is based in Zurich, said an arbitration panel there "is competent to hear this dispute, and FIFA awaits the outcome of this proceeding."

Visa was not a defendant in the suit but had tried unsuccessfully to get involved, arguing that it was a central party to the case.

In a statement, Visa said that during the trial it was "surprised and dismayed to learn that during the negotiations, FIFA had not been truthful with Visa regarding its obligations to MasterCard."

Visa said it was "disappointed" by the ruling "and we are currently considering all of our options."

The World Cup is held once every four years with the next tournament taking place in South Africa in 2010.

Source: euFootball.BIZ © Copyright 2006 - All rights reserved.