FIFA made to pay in World Cup sponsorship row
June 21, 2007
By Martyn Ziegler Special to PA SportsTicker
FIFA has agreed to pay $90 million compensation to sponsor MasterCard for misleading the credit-card giant in negotiations for the 2010 and 2014 World Cups on Thursday.
The huge settlement brings an end to legal action in the United States and Switzerland, and MasterCard's rivals, VISA, will sponsor the next two final tournaments.
A U.S. court judge said last year that
FIFA executives had "lied repeatedly" in negotiations with MasterCard, and in response the game's world governing body sacked four officials. Marketing chief Jerome Valcke has since been reinstated.
"The two parties have reached agreement resolving the contract dispute related to MasterCard's first right to acquire the sponsorship for the 2010 and 2014 FIFA World Cups," FIFA said in a statement.
"As a result of the agreement, MasterCard will discontinue its sponsorship of the 2010 and 2014 FIFA World Cups, with FIFA agreeing to compensate MasterCard for that discontinuation.
"Both parties also agreed to terminate legal proceedings in the U.S. and Switzerland."
MasterCard said in a statement that $87.5 million would be paid by FIFA in the second quarter of this year and $2.5 million in the third quarter.
The firm won a federal court decision against FIFA in December, but an appeal court last month ordered a review of that ruling.
The December court ruling stated "FIFA's 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."
It said the negotiators provided VISA with blow-by-blow updates of the MasterCard negotiations.
The court heard FIFA executives were determined to give the contract to VISA, rather than its current sponsor MasterCard, when both were offering similar amounts of money.
There were also indications of an attempted cover-up with a "mysterious gap" in an audio tape recording of a FIFA executive committee meeting which dealt with the sponsorship decision.
The ruling also suggested someone at FIFA changed the date on contracts given to VISA to make it look as though it had been signed several days earlier.
FIFA lied hmm. I guess Jack had a workshop, to train FIFA heads on lying.