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The Battle Of Privilege Ibiza

The Battle Of Privilege Ibiza

The nightclub Privilege, formally known as Ku, is the elder statesman of Ibiza dance venues, holding a record in The Guinness Book as The Worlds Biggest Club with a reported capacity of 10K people. It has witnessed many special moments down through the years and has had its fair share of ups and downs. For the past two decades the clubs majority shareholder has been José María Etxániz, a Spanish businessman who made his money in gaming machines and property development.  Jose has managed the Club via his company Baltanxa while the minority shareholder, the well known Matutes Group, owners of Ushuaia and Hi, have their shares in its holding company Bahia de San Antonio. From my understanding it was a 60/40% split but that is based on rumour not fact . Up until about four years ago, the Matutes Group were very much a silent partner, not involved in the daily trading of the club which was left to a succession of managers under the control of Mr Etxaniz ‘s company Baltanxa.

Under the direction of Baltanxa, the club had fallen into disrepair over the last number of years with very little capital invested in maintaining its outdated facilities. The accident that nearly claimed the life of a young Dutch man working as a sound and lighting engineer for Armin Van Burrens ASOT party back in 2013, was the first serious sign that all was not well inside the clubs creaking infrastructure. Armin swiftly departed Privilege for Ushuaia and the near fatal accident may have been the catalyst for Matutes to make his takeover move.  He argued that the value of the property was been devalued by lack of care and investment and exercised an option in the ownership agreement, to buy out the other partners shares. Baltanxa tried to block this takeover by pricing its majority shares well over the market value, a move that Bahia de San Antonio argued in court was illegal. That court case concluded last year, when a Judge appointed an independent auditor to price Baltanxa’s shares at a more practical rate which Bahia de San Antonio purchased and assumed 100% ownership of Privilege.

However recent actions by the local San Antonio council, the municipality that Privilege operates in, has laid fines and closure sanctions on Baltanxa which it considers the current owner of the business trading as Privilege Ibiza.  Those fines were associated to health and safety issues inside the club, a move that Baltanxa tried unsuccessfully to appeal in a Palma court recently. So while it was reported in the local media that Bahia de San Antonio now technically owns the property, it seems that Baltanxa continues to trade there, with a number of parties confirmed for this season including Resistance.  To own a property and to secure vacant possession of it, are two completely different scenarios, especially in Spain which protects the right of the incumbent tenant over the threat of evicting bailiffs.

At present there is no love lost between the two feuding owners of Privilege. When clubs were forced to build roofs in the early 90’s due to noise pollution, a number went bankrupt due to the cost. The old owners of Ku lost everything when the expensive roof they were forced to build by the San Antonio council, collapsed a year after been fitted, and in 2017, Baltanxa along with the owner of Es Paradis, lodged a legal complaint against the Mayors of San Antonio and Sant Josep denouncing them for allowing Hotels and beach clubs to operate outside the law as clubs. Baltanxa claimed they spent €6 million to rebuild the roof and soundproof the club while other businesses were freely operating as clubs in multi functional use Hotel venues under different licencing sanctions. The first public shots had been fired in the Battle for Privilege.

Now the same council that Baltanxa had denounced as showing preferential treatment to its competitors, is the same one that is currently not issuing a licence for it to operate this season.  Some people are saying that everything will be sorted at the last minute, and Privilege will be allowed to open, but this is a complex situation and not your average licencing issue especially when the islands most powerful and influential family are involved. There are a lot of factors at play here, both political and cultural and as a betting man, I would make the club favorite to remain closed this summer.  One would surmise that the current contracts between promoters and Privilege are with Baltanxa and not Bahia de San Antonio, so the ball is firmly in Mr Extasis court right now. Will he invest capital into an asset he does not own anymore to meet the demands of the Council he denounced for allegedly showing preferential treatment to his competitor the Matutes group who are now the incoming owners of the property? Or will he just walk away and call it as a battle he cant win? One gets the impression that once again, it will be the creditors that will end up paying for this mess.

Bahia de San Antonio are not connected to any of the parties confirmed at Privilege this season.  In  my opinion they dont care about them, they just want vacant possession of the building.  In Spain that is a complicated procedure that could take years, especially if Baltanxa use the appeal courts to buy time and remain trading as a nightclub.  Its not an ideal or healthy situation for Privilege and its future as a club is in much doubt right now. As the new owners, Bahia de San Antonio do not need another clubbing venue, but the real estate that Privilege stands on, is where its value lies. To date, the Matutes group have a fine record at refurbishing old hotels and venues, transforming them into modern business ventures and this is where I believe the future of Privilege under the management of Bahia de San Antonio is heading – just like they did with the old Club Playa den Bossa Hotel when remodeling it as Ushuaia.

It will be sad to see Privilege go, but like Space, it requires capital investment and a new direction, because it has been rudderless for the last number of years showing signs of fatigue and carelessness . This opinion is underlined by the number of quality, professionally managed parties, that have vacated the venue after just a few seasons resident there.  Last summer there was a rumour circulating that a high profile DJ connected to the Club was not paid for his services and reported thefts of large amounts of cash from the office safe, does little to inspire confidence either. What we are currently witnessing is the death throws of an old club, now destined for the history books. What will happen there this season is anybody’s guess, but expect a few more twists and turns before the Fat Lady sings her final farewell.

We contacted the Privilege Press Office for information regarding this seasons events but to date we have received no reply.

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