After a
bitterly contested legal battle, MasterCard has won a US lawsuit
against the world football governing body, Fédération
Internationale de Football Association (FIFA), over the sponsorship
rights to the football World Cup.

In April 2006, FIFA announced that it had signed an agreement with
Visa, giving Visa exclusive sponsorship rights to the World Cup and
other associated events. Visa’s commitment was set to begin in
January 2007. However, MasterCard, which has sponsored the World
Cup for 16 years, claimed that it had right of first refusal on
future sponsorship deals and quickly lodged a lawsuit in the US,
stating that FIFA was in breach of contract over the deal.

In early December 2006, US federal judge Loretta Preska ruled in
favour of MasterCard, and ordered FIFA to scrap its planned
eight-year deal with Visa, and also ordered FIFA to give MasterCard
advertising and sponsorship rights to the World Cup from 2007 until
2014.

Preska said that losing the sponsorship of the World Cup, the
world’s most popular sporting event, would have hurt MasterCard’s
competitive position against Visa. “MasterCard’s loss of the next
FIFA World Cup sponsorship would be, in its now-famous words,
‘priceless’,” the judge said, referring to MasterCard’s
long-running advertising campaign. In her ruling, Preska said FIFA
negotiators “lied repeatedly to MasterCard”, including when they
assured MasterCard 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. In a
statement released following the verdict, FIFA said it was
“convinced that at all times it acted in good faith”; however, FIFA
has now parted company with four employees involved in the case.
FIFA said that even though the judgment was “very biased” in favour
of MasterCard, negotiations conducted by its employees breached its
business principles and that it could not accept such conduct among
its own employees.

 
 

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