GEAB&P Wins Sponsorship of the Next Two World Cups for MasterCard

GEAB&P won a judgment on behalf of its client MasterCard International Incorporated from the United States District Court for the Southern District of New York permanently enjoining the worldwide governing body of soccer, FIFA, from proceeding with an eight-year sponsorship contract with VISA and directing FIFA to award sponsorship of the next two World Cups (in 2010 and 2014) to MasterCard. The decision has received wide attention in the sports law arena and remains featured on the Southern District’s website as one of the court’s “Rulings of Special Interest.”

MasterCard has been a sponsor of the World Cup for the past 16 years. Its contract awarding it sponsorship of the 2006 World Cup last summer in Germany granted MasterCard a right of first refusal with respect to the following sponsorship cycle. MasterCard believed it properly exercised that right when it was offered and accepted a package of sponsorship rights presented by FIFA for the next 8 years and, at FIFA’s request, signed and returned to FIFA a 96-page written contract. Yet shortly after signing the contract, MasterCard was told by FIFA that FIFA had entered into an eight-year contract with VISA.

MasterCard immediately retained GEAB&P, which filed suit against FIFA in New York days later. After successfully defeating FIFA’s attempt to dismiss the case for lack of personal jurisdiction and to compel arbitration of the matter on FIFA’s home turf in Switzerland, GEAB&P aggressively pursued discovery, requiring FIFA to turn over tens of thousands of documents it had resisted producing and requiring its President and entire marketing staff to submit to rigorous deposition questioning in Europe and New York, all within an expedited timeframe ordered by the court. GEAB&P’s aggressive discovery efforts revealed that FIFA had concealed from MasterCard that FIFA had offered and been negotiating a contract with VISA in violation of MasterCard’s contractual rights.

Before taking the case to trial, GEAB&P had to overcome one last obstacle — an eleventh-hour attempt by VISA, which was not a party to the lawsuit, to dismiss the case for failure to join it as a purported “indispensable party” or, in the alternative, to allow VISA to intervene in the lawsuit. GEAB&P defeated VISA’s motions — winning favorable rulings both from the District Court and the United States Court of Appeals for the Second Circuit, to which VISA had taken an emergency appeal.

A team of GEAB&P lawyers then tried the case to District Judge Loretta Preska over the course of four days. As Judge Preska observed in her written decision, GEAB&P’s lawyers repeatedly impeached FIFA’s witnesses on cross-examination, leading the court to conclude that, because “FIFA’s witnesses were impeached time and time again,” “their testimony was generally not credible.” In a 125-page decision, the court adopted GEAB&P’s arguments that FIFA had breached the right of first refusal granted to MasterCard, enjoined FIFA from proceeding with VISA and directed FIFA to award sponsorship rights for the 2010 and 2014 World Cups to MasterCard. The District Court also directed FIFA to pay MasterCard’s attorneys’ fees.

GEAB&P’s trial team was led by partners Martin S. Hyman and Adam C. Silverstein and included Counsel Elizabeth A. Jaffe and associates Shira Franco and Pamela B. Zimmerman.

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