Translation of József Spirk’s “They took the Soros campaign’s billions twice” published by 24.hu on March 6th, 2018.
Friendly advertising companies profited twice from the billions spent on the national consultation focused on George Soros, even as government orders placed political ads in newspapers and on television. The Cabinet Office of the Prime Minister’s Office led by Antal Rogán developed a financial system for its fear-mongering campaign involving gigantic amounts of money that made it possible for two private companies to insert themselves between the state and state-owned media and for both to charge significant commissions for the same ad. In this way, for every HUF 1 million spent by the state on advertising fees, as much as HUF 400-500,000 went into the pockets of those placing the ads.
The Cabinet Office of the Prime Minister last November spent more than HUF 7 billion (USD 28 million) in under a month on national consultation ads. The consultation on the Soros plan was the umpteenth country-wide propaganda campaign in 2017. Rogán’s ministry spent money on political ads at a huge rate last year.
During the weeks of the national consultation, the entire country was covered with George Soros’ face. The campaign had already started in September, but it was in November when the steamroller began.
The various consultation billboards occupied more than 40,000 places in the streets, and in the national and local television government spots were broadcast at least 15,000 times. And that is without mentioning the smaller or larger online newspapers, print media, and radio ads.
The consultation ads appeared in an incalculable quantity, with many hundreds of thousands in the media. Very few people managed to go an entire day without being confronted with the warning:
“Soros Plan – Let’s not allow it without speaking out!”
Rogán’s ministry contracted with the New Land Media Kft. (NLM) and Lounge Design Kft. consortium in the net amount of HUF 7.1 billion. The two systematically divided the work among themselves. To NLM went the media planning and the ad buys, to Lounge the creative work and the making of videos. But the two companies actually belong to one group of companies. The common owner, Gyula Balásy, turned up several years ago among those preparing and selling government ads. Since that time, however, he has become one of the most important actors in the market with political messages on a simple blue background as Rogán’s confidante.
24.hu obtained New Land Media’s media plan for November 2017. Since the Cabinet Office was not willing to release its own accounting, we were left with no choice but to calculate it using a 24-page spreadsheet using list prices, frequency of appearance, dates, as well as media company’s financial summary attached when invoicing consultation-related advertising costs.
Based on the document, it appears that out of HUF 7.1 billion, roughly HUF 5 billion (USD 20 million) was used to purchase media.
The financial framework for the November Soros consultation, by the way, agreed within a few millions of forints with that of the”Let’s Stop Brussels!” consultation that took place half a year earlier between April and July.
The two consultations were also similar in that the largest beneficiary was the media empire of Lőrinc Mészáros.
County newspaper publisher Mediaworks and other companies in which Mészáros has interests took in HUF 4 billion (USD 16 million) from the two national campaigns alone last spring. Andy Vajna also made a lot of money, as well as the other owners of pro-government media.
However, a less known development is that, thanks to the financial system, some “friendly” private companies profited twice from the advertising fees paid to state and local government-owned media by the time they travelled from Rogán’s ministry to individual television stations and newspapers. In some cases, local government media agency fees amounted to as much as 50 percent of the advertising cost.
New Land Media, as is generally the case, worked with a fixed 15 percent agency fee on the Soros consultation. The additional cost on top of the media buys is not a secret and appears in documents released to the public by the Cabinet Office of the Prime Minister. The company even acknowledges on the summary page that it pocketed HUF 640 million (USD 2.56 million) in November on the Soros consultation.
The ministry’s documents, however, do not mention the fact that New Land Media created a “subsidiary” for the purpose of obtaining an even larger share of media buy money.
Village Media Kft. was created for the purpose of making contact “with local media” owned by villages, cities, and district governments. As the company’s webpage states:
“As a reseller we systematically direct local media into the campaigns of large advertisers, and in so doing greatly increase the campaign’s rate of effectiveness.”
Naturally, New Land Media, with its huge financial resources, could have solved this within house, but instead it outsourced the work to itself.
Two years ago NLM’s director of advertising, Krisztina Hidvégi, registered Village Media Kft. with. a business partner. Already in 2016, in less than a year, the company generated for its owners after-tax profits of HUF 34.5 million (USD 138,000) on a turnover of HUF 220 million (USD 880,000).
In 2017, however, it brought far more than that home to the kitchen, placing HUF 475 million (USD 1.9 million) of Soros campaign ads in local newspapers in November alone. (The business results of 2017 have yet to be added to the balance sheet data on file at the company court.)
The recipe for realizing double profits was the following:
New Land Media invoiced the Rogán ministry HUF 547 million for the contract concluded with Village Media. Deducting its HUF 71 million agency fee, it remitted HUF 476 million (USD 2.2 million) to its own subcontractor, Village Media, which also charged an agency fee which, unlike the agency fee charged by NLM, was not fixed in the contract concluded with the ministry. For local media operating with very small budgets, the Soros campaign was found money. For this reason they were often satisfied with a fraction of the list price. In this way, as we have proven to be the case with many local media, Village Media was able to negotiate very favorable advertising rates.
Neither New Land Media nor Village Media answered our questions about the connection between the two companies.
The double dipping also worked in the case of state media, and there’s another twist.
The task of placing ads on state television channels and Kossuth and Petőfi Radio was given to Media Services Company Kft. (MSC), a company founded by Rogán’s neighbor, Csaba Csetényi. In November 2015 MSC won the right to sell all advertising for public media. But hardly five days passed when a company Atmedia Kft. bought, at its own risk, the rights to advertising for all of 2016.
It was as though they could see into the future, because state advertisements started coming at a fast rate, and in 2016 MSC’s revenues increased from HUF 351 million (USD 1.4 million) to HUF 840 million (USD 3.36 million). The company’s balance sheet gives a perfect picture of its agency fees. Out of revenues of HUF 840 million, HUF 480 million (USD 1.9 million) was its operating profit. So we can rightly assume that barely 40 percent, that is HUF 350 million (USD 1.4 million), was paid into public media coffers.
In 2015 MTVA CEO Miklós Vaszily claimed that the reason the sale of all advertising had been outsourced to private companies was because they thought that an independent, experienced private company could operate more effectively in this field than a state company operating with many administrative costs.
In addition to advertising time on public media channels, it also sold advertising for the TV2 group. Since December 2016 its owner has been András Tombor, a businessman close to the government. Last summer Tombor and company bought MSC lock, stock and barrel from the pair of Csaba Csetényi and Tibor Krskó.
Update!:
After the appearance of our article, MTVA CEO Miklós Vaszily announced that, while true two companies broker ads between public media and state advertisers, there is a significant difference in comparison to the New Land Media-Village Media pair, in that not both brokers represent the seller. MSC is the sales house of public media, and for this reason charges commissions according to contracts concluded with public media.