MasterCard wins World Cup ruling
MasterCard International Inc. is entitled to sponsor the next two World Cup soccer tournaments, a federal judge ruled Thursday, despite a deal Visa International Inc. signed with soccer's international governing body calling for it to receive the rights Jan. 1.
U.S. District Judge Loretta A. Preska issued the 125-page ruling in Manhattan after MasterCard sued FIFA, soccer's governing body, saying FIFA signed its deal with Visa even though MasterCard had a right of first refusal to sponsor the 2010 and 2014 World Cups.
Purchase, N.Y.-based MasterCard, the nation's second-largest credit card brand, behind Visa, said it returned a signed contract to extend a sponsorship deal with FIFA that made it the exclusive payments sponsor for the 2006 World Cup in Germany.
Preska said FIFA breached its obligation under Swiss contract law to give MasterCard the first right to acquire the sponsorships through 2014.
She said FIFA's negotiating team even misled MasterCard into believing it had an exclusive 90-day period from Feb. 8, 2005, to May 8, 2005, to consider a sponsorship deal for the next two World Cups when FIFA was actually "simultaneously and aggressively" negotiating with San Francisco-based Visa.
Preska noted that FIFA's slogan was "fair play." Yet, she added, its dealing "with FIFA's long-standing partner MasterCard constitutes the opposite of fair play and violates FIFA's own requirement that its negotiators deal honorably with its business partners."
FIFA said it would appeal.
"FIFA is dismayed by the decision," it said. "FIFA remains convinced that at all times it acted in good faith and it will therefore continue to vigorously pursue its case."
MasterCard had proved it would suffer irreparable harm for which money could not adequately compensate it if it were deprived for at least the next eight years and probably longer "the unique opportunity to sponsor the most popular and widely viewed sporting event in the world," Preska said.
Visa said it was considering its options. It said it negotiated its global sponsorship agreement with FIFA in good faith after FIFA assured it that the deal was valid.