MasterCard legal action against FIFA's Visa shift

MasterCard International has filed a complaint in the US District Court for the Southern District of New York seeking an injunction against the Federation Internationale de Football Association, the governing body of the FIFA World Cup to prevent FIFA from moving forward with an agreement with Visa International to sponsor the 2010 and 2014 FIFA World Cups.

MasterCard claims that FIFA entered into that relationship despite having a contractual agreement giving MasterCard the right of first refusal to continue to be the category-exclusive sponsor of those events.

MasterCard's also states that after a period of negotiation in which FIFA assured MasterCard that it was not going to enter into an agreement with a third party, it proceeded in doing so.
"FIFA did this despite the fact that it had already provided MasterCard with a written contract -- including all terms -- which MasterCard signed and returned to FIFA, which then advised MasterCard that a deal with Visa was completed," the complaint alleges.

"This action by FIFA is a blatant and deceitful violation of our right of first refusal," said Noah Hanft, General Counsel, MasterCard International, "particularly as we had already signed and accepted FIFA's offer."

As part of MasterCard's 2002-2006 agreement with FIFA, which was signed in 2002, MasterCard says it was granted the right of first refusal to be the official and exclusive payment solutions sponsor of future FIFA World Cup events. Therefore, FIFA was precluded from entering into such an agreement with Visa.

"Among the key terms we bargained for in the 2002-2006 FIFA World Cup sponsorship negotiation was the right to obtain future FIFA World Cup sponsorship opportunities and a critical aspect of any sponsorship -- particularly one as significant as FIFA World Cup -- is continuity and the building of equity over time," continued Hanft.

"MasterCard will vigorously pursue legal action to compel FIFA to honor the 96-page written and binding agreement it has with MasterCard, providing for us to be an official sponsor of the next two FIFA World Cups," he said.

"MasterCard continues to move forward with the important customer and consumer programming related to the 2006 FIFA World Cup in Germany, which begins in June," said Lawrence Flanagan, Chief Marketing Officer, MasterCard International. "A significant number of our customer financial institutions, more than 300 of them, are activating business-building programs worldwide."

See also: Visa replaces Mastercard in FIFA partnership (6 Apr) and Follow the MasterCard to World Cup ticketing (30 Mar) and Man-United-branded Barclaycard charges into Asia (22 Mar)