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FIFA settles with MasterCard
FIFA & UEFA - 25 June, 2007
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After 14 months of legal fighting, MasterCard has dropped its World Cup sponsorship suit against FIFA in lieu of a USD 90 million settlement.
The dispute came after FIFA ended 16 years of partnership with MasterCard by signing up with Visa, MasterCard's larger rival, for the 2010 and 2014 World Cups. MasterCard said it should have been given the right of first refusal for a new contract.
FIFA confirmed in a statement it was set to implement a contract with Visa, which was not a defendant in the lawsuit, but had tried unsuccessfully to intervene.
"(We have), first of all, resolved a problem, and, secondly – much more importantly – (it) has paved the way to a good, new partner that will support it and its manifold activities efficiently all around the world," said FIFA President Sepp Blatter.
MasterCard said it decided to settle for business reasons, and that it no longer cared to work with FIFA.
U.S. District Judge Loretta Preska in New York sided with MasterCard in the case's initial court hearing, ruling in December that FIFA breached its contract. An appeals court last month ordered a review of that ruling, however.
Zurich-based FIFA wanted an arbitration panel in Switzerland to decide the matter.
"(It) is clearly a significant win for Visa, as World Cup sponsorship is a major worldwide marketing opportunity," Calyon Securities stock analyst Craig Maurer said in a research note to clients.
As part of the settlement, both FIFA and MasterCard agreed to terminate legal proceedings in the United States and Switzerland.
The settlement will have USD 87.5 million paid to MasterCard in the second quarter of this year and USD 2.5 million will be paid in the third quarter.
The dispute came after FIFA ended 16 years of partnership with MasterCard by signing up with Visa, MasterCard's larger rival, for the 2010 and 2014 World Cups. MasterCard said it should have been given the right of first refusal for a new contract.
FIFA confirmed in a statement it was set to implement a contract with Visa, which was not a defendant in the lawsuit, but had tried unsuccessfully to intervene.
"(We have), first of all, resolved a problem, and, secondly – much more importantly – (it) has paved the way to a good, new partner that will support it and its manifold activities efficiently all around the world," said FIFA President Sepp Blatter.
MasterCard said it decided to settle for business reasons, and that it no longer cared to work with FIFA.
U.S. District Judge Loretta Preska in New York sided with MasterCard in the case's initial court hearing, ruling in December that FIFA breached its contract. An appeals court last month ordered a review of that ruling, however.
Zurich-based FIFA wanted an arbitration panel in Switzerland to decide the matter.
"(It) is clearly a significant win for Visa, as World Cup sponsorship is a major worldwide marketing opportunity," Calyon Securities stock analyst Craig Maurer said in a research note to clients.
As part of the settlement, both FIFA and MasterCard agreed to terminate legal proceedings in the United States and Switzerland.
The settlement will have USD 87.5 million paid to MasterCard in the second quarter of this year and USD 2.5 million will be paid in the third quarter.
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