The operator of Hungary’s largest music and pop-culture festival – the Sziget (“Island”) – has been purchased by listed media firm Econet. The deal is worth a total of nearly Ft 5 billion (€19.6 million), and will take place in several stages over the next five years, with Econet paying Ft 1.1 billion for 26% of Sziget by March of 2008, and a maximum of Ft 3.85 billion in four additional tranches for the remaining 74% in equity.
According to napi.hu, the headline figure will only be reached if the festival group meets a provision target of Ft 200 million in EBITDA in 2008. Meanwhile, a provision in the contract allows Econet to back out if a lawsuit recently filed by the authorities in neighboring District IV – who have complained about noise and other quality-of-life issues related to the festival – results in a legal ruling disadvantageous to the company.
While the festival remains the largest such event in Central Europe, in recent years the organizers have said that the Sziget has been a break-even affair for the company.
Last week, the organizers announced that next year’s event would be shortened from eight days to six, a move they said would result in a festival that was shorter but “stronger.” At the same time, the firm said it would keep ticket prices unchanged from 2007.
As for its plans for the festival, Econet said it wanted to improve and expand the events in the Sziget portfolio, which include the “Volt” festival near the western Hungarian town of Sopron, and the “Balaton Sound” event near the country’s largest lake.