“Sixty to eighty percent of European festivals receive some form of municipal support for their organization. In Hungary, this ratio is 52 percent. The Sziget Festival did not have to pay for the use of public space for the first 10 years, and in some cases even received support for cultural purposes. In reality, it is very rare for such an event to be viewed on a purely commercial basis,” explained founder Károly Gerendai at Tuesday’s meeting of the capital’s financial committee, to which he was invited by committee chair Krisztina Baranyi.
The Sziget Festival generates significant revenue for the municipality through public space usage fees collected on the area provided by the capital city and local business tax from tourism and hospitality businesses, which is further increased by the radically increased traffic of the BKV and the baths. Over the past three years, it has paid HUF 1 billion (EUR 2.58 million) to the capital’s local government under various titles, but the city has also generated an additional HUF 200 million (EUR 0.52 million) in business tax revenue per year. GKI estimated an annual revenue shortfall of HUF 32.4 billion (EUR 83.5 million).
Sziget 2025. Photo: Hungary Today
The Ownership Committee had previously discussed the matter in closed sessions, but Krisztina Baranyi considered it important to continue the debate in public. Numerous questions were raised in the finance committee, and Károly Gerendai and Tamás Kádár, the current managing director of Sziget Zrt., tried to prove the importance of the festival with a long, multi-faceted presentation. The main opposition party, Tisza, repeatedly emphasized how important they consider the festival to be, asking detailed questions, after which Andrea Bujdosó, chair of the Tisza faction, stated that for the sake of responsible management of public funds, they cannot allow the city to forfeit the HUF 200 million (EUR 0.52 million) it is entitled to next year under the contract. She then suggested that the current contract should remain in place and be extended for another five years when it expires. Ambrus Kiss, Director General of the Mayor’s Office, noted that in that case they would not be able to enforce the discounts, such as the half-price weekly passes requested by students, which Károly Gerendai and his team are willing to offer if they continue with the current contract, because this is not included in it.
Károly Gerendai also said that, in contrast to the HUF 200 million (EUR 0.52 million) public space usage fee payable by Sziget, the capital city has assumed a HUF 250 million (EUR 0.64 million) obligation, so it is by no means beneficial for the capital city to maintain the current contract. He talked about his plans and his efforts to continue the festival. He emphasized that time is running out, as performers and guests are already committing to other events. However, in order to convince investors, it would be necessary to terminate the current contract and sign a new long-term agreement.
Despite all this, the proposal, which included termination, did not receive support in the vote, with 4 votes in favor and 6 abstentions.
As is well known, the capital’s ownership committee twice voted down a proposal to terminate the Sziget Festival organizers’ contract for the use of public space, which was signed in 2021 and expires next year. The majority decision was made by Fidesz and Tisza representatives, who both expected long-term guarantees for the festival to be held and did not consider it acceptable for the capital to forego HUF 200 million in annual revenue from public space usage fees.
Sziget Zrt. had previously announced that it would not organize the festival next year, therefore it would not maintain its request to occupy public space and would therefore not pay. No one can provide the guarantees requested by the committee at this time, as it is not known who will organize the festival or how, if an investor can be found at all. However, this will require a new agreement on the use of public space, which the capital city can only issue if the current one is terminated, explained Ambrus Kiss, Director General of the Mayor’s Office. This is an official procedure, which is the responsibility of the Owners’ Committee, hence neither Mayor Gergely Karácsony nor the Capital City Assembly can take action in this matter.
To resolve the stalemate, Krisztina Baranyi, mayor of District IX and representative of the capital, proposed that the Capital City Assembly take over the powers of the Owners’ Committee in this matter on an ad hoc basis, terminate the contract, and begin negotiations with those undertaking to organize the festival. She justified the proposal by saying that the decision of the Ownership Committee had jeopardized the Sziget Festival. However, the fate of one of Europe’s largest festivals cannot be decided by a committee of the General Assembly, Krisztina Baranyi argued.
Meanwhile, Károly Gerendai has founded a new company to save the Sziget Festival. FestPro IoF2025 Befektető Kft. is solely owned by the festival’s founder, who has so far been unable to reach an agreement with either the current owners of the festival or the capital city.
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Via Népszava; Featured photo: Hungary Today
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