BREAKING – Budapest’s Sziget Festival faces extinction unless new investor is found urgently

American investors are pulling out from behind the Sziget Festival due to uncertainties in Hungary, but the festival may still be saved with new owners stepping in.

Fragile future for the Sziget Festival

The American private equity firm KKR, which bought Luxembourg-based Superstruct Holding (the current owner of the Sziget Festival) in 2024, has decided to withdraw from the festival, citing the unstable situation in Hungary. This led to the termination of the land-use agreement between the festival and Budapest city authorities. While Budapest has expressed openness to solutions, the future of Sziget remains uncertain, requiring a fresh investor, Telex wrote. Interestingly, a familiar figure from the festival’s past might return to support Central Europe’s biggest music event.

Challenges and political pressure

Sziget has faced threats before, especially from the Orbán government, largely due to the festival’s support of LGBTQ+ values. Legal threats surfaced after a video featuring two men kissing caused controversy. Demeter Szilárd, director of the Petőfi Literary Museum and owner of the grounds at Hajógyári Island where Sziget is held, even stated that if he wished, Sziget could simply cease to exist. This is tied to the fact that Hungarian ownership of the festival completely ended at the end of 2022, after Károly Gerendai and partners sold their shares over several years.

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Financial struggles amid political improvements

Despite signs of improving American-Hungarian diplomatic relations — including the appointment of a new US ambassador and Hungary regaining full participation in the US visa waiver programme — the festival’s poor financial performance appears to have driven the decision to quit. According to reports, Sziget posted losses of HUF 1.8 billion in 2023 and 3.9 billion in 2024, with forecasts suggesting a further HUF 2 billion deficit this year. The uncertain economic climate in Hungary and a delayed economic turnaround predicted by the current government compounded worries.

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Next steps for Sziget

With the American owners stepping away, a new buyer must be found. Meanwhile, Sziget has initiated the termination of its land-use contract with Budapest, which would otherwise oblige payments through 2026, even if no festival is held. The Mayor of Budapest, Gergely Karácsony, responded on Facebook with a commitment to support the festival, calling Sziget a symbol of Budapest’s diversity and openness. That means the city is prepared to offer legal and procedural assistance to help ensure Sziget’s future, but they will not be able to invest money because the treasury of the capital is empty.

A familiar face may return

The search for a new owner is underway, and Károly Gerendai’s name has resurfaced. Gerendai previously co-owned the Sziget Kulturális Menedzser Iroda Ltd, the company behind the festival. Speaking to Forbes, he admitted that although he had different plans for his future, he is now determined to find a long-term solution to secure Sziget’s survival. While it’s unclear how much the festival will sell for, Forbes notes that KKR paid around GBP 1.3 billion last June — more than HUF 610 billion today.

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Gerendai disclosed he is looking for investment partners since he has recently been focusing on gastronomy investments, notably in the Costes group, and spends much of the year travelling. He was optimistic that a new ownership structure could be in place as soon as October.

Expert: Sziget Festival must evolve in several key areas to stay relevant

Dr Richárd Andrejszki, the managing director of Chef Market Ltd., highlighted several interconnected factors that may have led to the Americans stepping back from organising the Sziget Festival.

• He pointed out that organising profitable festivals has become nearly impossible nowadays, which is why events like Balaton Sound and Volt were forced to shut down.
• Furthermore, visitor interest is declining due to both rising prices and the arrival of new generations. For instance, in 2019, around 46% of Generation Z expressed a desire to attend festivals, but by 2025, this figure had dropped to 39%, with only about 29% actively seeking out live music events.
• Costs are soaring sharply, such as rising fees for stage builders, while revenues are falling short. The true festival experience has been lost, with festival organisers essentially turning into concert promoters.
• Additionally, new generations—Z and Alpha—crave experiences rather than a linear series of events or concerts. They are willing to pay for these immersive experiences, yet they consume less alcohol, which reduces their contribution to overall income.
• He also stressed the critical importance of maintaining a year-round presence both online and offline, through supplementary programmes, collaborations, and brand partnerships. Even though Sziget ranks among the world’s top ten largest festivals, there is still room for improvement in this regard.

“In today’s world, only those who offer not just concerts and performers but a complex, tailored experience that meets the generation’s needs will survive,” concluded the managing director of Chef Market in his analysis.