Est Media Kft., a subsidiary of the Econet media group, is to acquire the festival organiser Sziget Kft. for HUF 4.95 billion (EUR 19.48 million) in a number of stages. The purchase has been tied to several conditions. Under the deal, chief organiser Károla Gerendai will stay on for another five years. Sziget Kft. announced last week that the festival will be shortened by two days.
The purchase price may seem surprisingly high given that the festival has been operating at break-even in recent years. Est Media Kft. will initially acquire a 26% stake in Sziget Kft., which has to be paid for by 17 March. The remaining 74% will be purchased in three stages, but only if the company achieves certain profitability targets in the coming years. Pre-tax profits must reach HUF 200 million (EUR 786,990) in 2008 , HUF 350 million (EUR 1.38 million) a year later, exceed HUF 420 (EUR 1.65 million) by 2010 and subsequently be at least HUF 500 million (EUR 1.97 million). If Sziget Kft. does not meet ambitious targets, the rest of the sale will not go ahead.
The contract could also be voided if the ongoing court case with District IV makes it impossible to hold the festival. The mayor of the district, Tamás Derce, argues that the noise factor of the festival is unbearable for local residents. He wants musical events to be banned from 10pm to 6am, which could put a stop to the festival, the organisers claim. According to Sziget chief organiser Károly Gerendai there are several alternatives: “In the worst case scenario the festival would be relocated. We have already received some offers from across the region.” Gerendai was, however, unwilling to reveal any more specific details to The Budapest Times.
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Other changes concerning the festival have already been announced. Next year the previously week-long Sziget Festival will only last five days. According to Sziget Kft. it will be “shorter, better and cost the same”. Gerendai told The Budapest Times that the changes are not related to the current change of ownership, and are instead an attempt to meet District IV halfway. “Firstly we want to entertain, rather than disturb. Secondly, the thinner wallets of Hungarians will benefit from a shorter festival with ticket prices the same as last year,” he said.
