The company behind Hungary’s Sziget Festival looks likely to be sold to media giant Econet in a deal that could be worth nearly US$30 million.
According to napi.hu online news service, the headline figure will only be reached if Sziget Cultural Management Ltd., which has Sziget, Volt Festival and Balaton Sound, meets a provision target of euro 785,000 (US$1.14 million) gross earnings in 2008.
The deal could then be worth a total of euro 19.6 million (US$28.9 million) over a five-year period.
Econet will pay for and acquire 26 percent by March 2008, with the other 74 percent split across four annual payments between 2009 and 2012.
The only potential obstacle is another legal action brought by Dr. Tamas Derce, the mayor of Újpest, the 4th District of Budapest, which will be heard in court in February.
Derce wants to force the organisers to close down all music between 10 p.m. and 6 a.m., which would mean a very early shutdown when up to 70,000 people are enjoying themselves.
If the case goes against the festival, there’s a clause that says Econet can pull out.
But Sziget managing director and co-owner Gabor Takacs doesn’t see it being a problem because Derce brought a similar action in 2002, which the Budapest District Court threw out because the festival hadn’t broken any noise regs.
"I don’t think the result will be any different from before," Takacs told Pollstar, explaining that there’s still no evidence that the festival has or is likely to break noise limits. "I don’t see that the court will take notice of a few people who are complaining about noise that’s below the level allowed."
Sziget has already made a couple of voluntary compromises by reducing this year’s event from eight days to six and closing down the metal stage at 11 p.m. Noise-reducing walls will be built around the loudest stages.
Takacs said the new ownership will make no difference to the way the festival operates as he and Karoly Gerendai, the president and the other co-owner, have both signed contracts to stay on for at least the five years it will take to complete the deal.
Popular daily tabloid Blikk reported that cutting the event by a couple of days may improve it even further, with the same budget being spent over six days rather than eight.
Sziget started in 1993 with 43,000 visitors and soon became the major festival to spring from the old Eastern Bloc. Average crowds are now up to about 385,000, with half the crowd coming from outside of Hungary.
The acts to play the Danube island site in the last five years include Radiohead, The Killers, The Chemical Brothers, Faithless, Gogol Bordello, Tool, Scissor Sisters, Franz Ferdinand, Nine Inch Nails, The Bloodhound Gang, Korn, Natalie Imbruglia and Basement Jaxx.