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MasterCard sues over World Cup choice of Visa

MasterCard has sued world soccer's governing body over its decision to make Visa the card-company sponsor for the 2010 and 2014 World Cups.
/ Source: Reuters

MasterCard International said Thursday it filed a complaint in federal court seeking an injunction to prevent FIFA, world soccer’s governing body, from cementing an agreement for Visa International to sponsor the 2010 and 2014 World Cups.

MasterCard is a sponsor of the 2006 World Cup in Germany and has been allied with the World Cup since 1990. MasterCard is the No. 2 global charge card organization and Visa is No. 1.

MasterCard said FIFA entered into the relationship with Visa “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 complaint states that after a period of negotiation in which FIFA assured MasterCard that it was not going to enter into an agreement with another party, it proceeded in doing so.

MasterCard claimed FIFA did this despite the fact it had already provided MasterCard with a written contract which MasterCard signed and returned to FIFA, which then advised MasterCard that a deal with Visa had been completed.

“This action by FIFA is a blatant and deceitful violation of our right of first refusal,” Noah Hanft, general counsel of MasterCard International, said in a statement.

Markus Siegler, FIFA’s director of communications, told Reuters: “We have no comment yet. First, we need some information before we can say anything. We only heard of this a few minutes ago.”

Visa officials were not immediately available for comment.

MasterCard said that as part of its 2002-2006 agreement with FIFA, MasterCard was granted the right of first refusal to be the official and exclusive payment systems sponsor of future FIFA World Cup events.

Therefore, MasterCard claimed, FIFA was precluded from entering into such an agreement with Visa.

Hanft added: “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.”

On April 6, Visa said it had signed an eight-year deal as the new financial services partner of FIFA.

Visa said the contract would run from January 2007 to 2014, and Visa was taking the place of MasterCard.

Visa has marketing programs with the Olympic Games and the Rugby World Cup.

MasterCard filed its complaint in the U.S. District Court for the Southern District of New York.