Privilege Ibiza – world’s biggest nightclub sold to White Island monopoly

Articles, News // Sun 17 Jul 2022 - 03:11am

Grupo Empresas Matutes (GEM) has succeeded in attaining complete control of the largest club in the world, Privilege Ibiza. The deal has fueled fears of a Matutes family Ibiza monopoly.

The GEM-owned Palladium Hotel Group manages venues and hotels across the White Isle, including beach club resorts such as Hard Rock Hotel Ibiza and Ushuaïa.

Pricey Privileges

Leading up to the purchase, GEM possessed a 45% stake in Privilege. They obtained the remaining 55% for an estimated €20 million from José María Etxaniz.

The amount, set by an independent auditor, is reportedly equivalent to the original figure requested by Etxaniz back in 2018.

Privilege shown rammed with ravers. The 10,000-cap venue was verified as the world’s largest nightclub by Guinness World Records back in 2000.

Corporate Controversy

The controversial sale was accompanied by a 5-year legal dispute between Etxaniz and GEM.

Etxaniz accused GEM of utilising licencing loopholes to operate their resorts as nightclubs.

Their venues are licenced as ‘hotel establishments and venues with outdoor musical performances’. Thus, GEM avoids the same rules that regulate nightclubs.

Extaniz argued this facilitates unfair competition on Privilege from establishments such as Ushuaïa.

Etxaniz also blamed GEM for damaging Ibiza’s clubbing businesses and driving DJ fees to astronomical heights.

GEM works with numerous in-demand DJs, they sign exclusivity deals and out-bid competitors – helped by their regulation-dodging and cost-cutting licences.

Ushuaïa’s licence allows them to operate open-air events, similar to how Privilege operated before new laws demanded a roof installation.

The Verdict

The case was fought out in The High Court of Justice of the Balearic Islands (TSJB) and ruled in GEM’s favour.

Etxaniz’s claims were rejected and his argument was deemed “irrelevant”, the judge also regarded GEM’s licencing as “not controversial”.

GEM’s stronghold on Ibiza nightlife has sparked fears of a monopoly and harsher competition. Numerous venue owners have become uncertain of their nightclub’s sustainability.

Even Ibiza’s most popular nightclubs, such as Amnesia, are at greater risk of succumbing to the corporate giant.

From Rave to Rubble

A 2018 inspection of Privilege revealed illegal capacity-increasing modifications, prompting its closure. It returned in 2019, albeit partially closed as several sections were deemed unsafe. Furthermore, its doors remained permanently closed since the pandemic reached the Island in 2020.

Due to lack of maintenance, the nightclub has continued to fall into disrepair. Privilege now offers only one type of resident, shrubbery.

Back in 2020, Geoff Robinson captured the true deterioration of Privilege.

Plans for Privilege remain a corporate secret, with no indication of a return anytime soon. We can only hope that the venue is restored to its former glory.