FIFA and MasterCard settled the latter's lawsuit, paving the way for FIFA to go ahead with its sponsorship agreement with MasterCard rival Visa International.
MasterCard, which had sponsored the World Cup for 16 years, will drop its sponsorship of the next two World Cups under a $90 million settlement with FIFA announced on Thursday. FIFA will pay $87.5 million by June 30 and $2.5 million by Sept. 30.
"We have made a decision after taking a hard look at the facts and circumstances, that substantial financial compensation to MasterCard, along with severing the relationship between our two companies, at the end of the day was in the best interests of MasterCard's customers and shareholders," MasterCard's general counsel, Noah Hanft, said on a conference call.
MasterCard sued FIFA in April 2006 after FIFA awarded the sponsorship for the next two World Cups to rival Visa. MasterCard claimed it had right of first refusal on future sponsorship agreements. MasterCard won in U.S. District Court, but an appeals court last month ordered a review of that ruling. FIFA wanted an arbitration panel in Switzerland, where it is headquartered, to decide the matter. According to FIFA, the settlement also covered a protracted marketing dispute between FIFA and MasterCard regarding the two hemispheres logo.
As part of the settlement, FIFA and MasterCard agreed to terminate legal proceedings in the United States and Switzerland.
"FIFA has, first of all, resolved a problem," FIFA president Sepp Blatter said, "and, secondly - much more importantly - has paved the way to a good, new partner that will support it and its manifold activities efficiently all around the world."
Visa will be one of only six FIFA partners as soccer's world governing body narrows down its main sponsors. The others will be Adidas, Hyundai, Coca-Cola, Sony, Visa and Emirates Airlines.