Monday, July 02, 2007

FIFA clarifies Mastercard legal settlement details

On 21 June the world football body FIFA settled with MasterCard over a dispute regarding the sponsorship of 2010 and 2014 World Cups. FIFA paid US$90 million to MasterCard, ending legal fights in US and Swiss courts. The Times of India received the following answers to its 'questions on notice' from Andreas Herren, head of FIFA’s media department:

Why the out-of-court-settlement?

The US Court of Appeals issued a judgement, dated May 25, 2007, in which it remanded the case to the lower court ordering, as FIFA had already long requested, that it clarify the question of which contract between FIFA and MasterCard is valid. In this respect, FIFA was very pleased with the judgement. In other words: the decision of the Appeals Court in New York vacated the first instance decision by Judge Preska and ordered it to be reviewed. This new situation paved the way for negotiations regarding a settlement.

When TOI had asked [FIFA President] Mr [Joseph S] Blatter to speak on the controversy during his visit to India in April, he looked rather embarrassed?

No. At that time, the Appeal’s Court in New York had not yet decided and, for legal reasons, it was not possible for FIFA and Mr Blatter to reply to questions in such detail as can be done now. FIFA had been attacked by MasterCard regarding the use of its own logo as from 2002 onward and, as is easily understandable, this situation has not helped at all negotiations to renew a partnership.

The legal hassles had led to a big loss of revenue for FIFA. Why did it then move out of the contract?

The loss of revenue is only such that FIFA will most likely be able to compensate over the total period. What is more, this settlement will not impact on the financial support that FIFA will be giving to its member associations. We would like to emphasise that the settlement amount of $90 million includes, in addition to costs, the annulment of the contested right of first refusal of a new sponsorship agreement for eight years with priority for a further extension ($60 million) as well as the settlement of a protracted marketing dispute between FIFA and MasterCard regarding the two hemispheres logo ($30 million).

Court cases, disputes ... Don’t they mar FIFA’s image?

No. As stated above, the decision by the Appeals Court has put back in perspective a great number of things.

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