Blatter’s Fifa has $100m loss on the cards

Fifa, the football world body, is budgeting for a $100 million settlement following its humiliating defeat in a New York courtroom last year, reports David Bond in the Daily Telegraph.

The fallout from Fifa’s scandalous mishandling of sponsorship negotiations with credit card rivals Visa and Mastercard is likely to be felt for some time to come.

One well-placed Fifa source said that they were budgeting for the humiliating New York court defeat last December to cost them at least $100m (£50m). Others said that it was too early to forecast the financial damage. But one thing is certain. Last year’s court ruling means neither Visa nor Mastercard are presently paying the $2m (£1m) a month which Fifa had budgeted for from January 1, 2007.

That’s unlikely to cause the sort of crisis precipitated by the ISL collapse but, with potential damages and legal fees still to be paid, the episode remains an expensive setback. On top of that there is growing concern that once the legal battle is decided – Fifa have launched an appeal – Visa and Mastercard will both turn their backs on Fifa.

A day after the American court’s ruling, Blatter suspended marketing and TV director Jerome Valcke along with English lawyer Tom Houseman and marketing team executives Stefan Schuster and Rob Lampman for their part in the controversy. Despite that they are still on full pay until June.

The four men were found by the US district court to have “lied repeatedly” during talks with Mastercard over renewing their 16-year agreement.

To recap, Judge Loretta Preska ruled that Fifa had breached the terms of their £25m, four-year agreement with Mastercard by failing to offer them first refusal on a new four-year deal.

Instead, led by Valcke, they pursued a “twin-track” approach, secretly playing Mastercard off against their rivals.

The saga came to a head three hours before a meeting of Fifa’s executive committee on March 14, 2006. Having initially refused to meet Fifa’s asking price of $180m (£90m), Visa suddenly tabled a $195m (£97.5m) bid which Blatter and the executive committee approved.

Until that point Mastercard believed they had secured a $180m (£90m) deal. It was only three days later that they were told the executive committee had refused to ratify the deal because of an outstanding trademark dispute – a claim which Judge Preska ruled as “incredible”.

Click here to read Bond’s report in full.