Nézőpont to analyze media for 120 gov’t agencies for HUF 4.4 billion

August 17, 2015

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In 2014 Nézőpont Institute Nonprofit Kft., one of seventeen companies selling political analysis services vying for government business, reported pre-tax profits of HUF 5 million after total revenues of HUF 111 million—well behind Kristóf Szalay-Bobrovniczky’s Századvég Alapítvány (HUF 1,729 million/USD 6.2 million), András Száz-Giró’s former company Strategopolis Kft. (HUF 670 million/USD 2.4 million) and even Jobbik’s Iránytű Intézet Kft. (HUF 124 million/USD 443,000) in terms of turnover.

In February this year Nézőpont‘s owner and director, Sámuel Mráz Ágoston, reportedly sold the company to Tibor Győri, former legal undersecretary at the Office of the Prime Minister.

Nézőpont recently won a HUF 4.4 billion (USD 15.7 million) contract to monitor and analyze Hungarian media over 41 months.  The eight-fold increase in annual revenues rockets Nézőpont to lofty heights of Századvég Alapítvány and Strategopolis in terms of government orders (and presumably donations from state-owned companies).

So what does a political analysis company do for HUF 90 million (USD 320,000) a month?  This was the subject of a televised interview Friday evening between Nézőpont’s Mráz Ágoston and ATV’s András Simon that, even by Hungarian standards, was remarkably cynical.

András Simon:  What work are you performing, how many people are involved and what is the criteria for success?  Or I might simply ask what is it about this work that costs HUF 4.4 billion?

Sámuel Mráz Ágoston:  The first HUF 1 billion is the value added tax which has to be paid.

AS: Oh, so that’s a gross amount.  That’s not so much.

SMA: I wouldn’t say that, because the work is huge.  We’re going to work three and a half years for this amount.  Our company won the right to conduct media analysis for a minimum of 120 different government clients, from the Hungarian Opera House to NAV (National Tax and Customs Administration) to all of the county police magistrates offices.  We’re talking about thirty different products.  Our responsibility is the following: if something newsworthy is mentioned on tonight’s Egyenes Beszéd (Straight Talk), we collect it, or if any of the clients are mentioned, we inform them about it.  This helps the flow of information within the government.  Analysis and research is also involved.

AS: So if we deduct the VAT we’re talking about HUF 3.3 billion (USD 11.8 million).  You said three and a half years, so 42 months . . .

SMA: 41 months . . .

AS:  Then quickly calculating off the top of my head that comes to around HUF 80 million per month.

SMA:  HUF 90 million a month to be precise (giggling).

AS: What about this work costs HUF 90 million a month?

SMA:  I tried to explain before what is involved . . .

AS: What is the work?  According to my knowledge, media monitoring involves using an algorithm to search for key words we want to find: “government”, “minister”, “Zolán Balog”, “singing lessons”.  It only takes the computer a moment to throw up the results.  What is this HUF 90 million? (Laughing)  Is the algorithm expensive?

SMA:  That is also expensive, by the way, and software development is included.  On the one hand, we have to build a data base.  In the case of this program, for example, analysts will write down what was mentioned, what I said, and what you asked.  This goes into the data base. The data base actually does work with an algorithm, but then you need people to polish and render precise the media analysis.  If I know well, you previously worked for MNB (National Bank of Hungary) where you certainly saw media analysis.  For sure you often got upset because the media analysis was not perfect.  I recall that at that time a competitor worked for the MNB, so I would be happy if you would acknowledge that the service was not good.

AS:  I have yet to see a perfect media analysis.  Before the central bank I worked for Magyar Telekom and I didn’t see one there either.  However, I know how much media monitoring cost at both companies, and I can say that it was a fraction of the amount you’ve contracted for.

SMA:  What you are thinking of is a monthly amount for a period of three and one half years that not only covers media monitoring but thirty different products.  It is very difficult to talk about the money involved without going into the details, which would not really be that interesting because we’re talking about a complicated construct.  However, allow me to say one final thing about this: two hundred people are going to work on this.  If 200 people were only paid minimum wage, which they’re not, that would already come to HUF 45 million a month.

AS:  How many people work for the company now?

SMA:  The company group employs around 150 people at the moment.  But we need to employ that many people in order to fill the order.

AS:  So in addition to the 150 people you are going to employ another 200 people, say, within one month’s time?

SMA:  That’s too many.  We need a total of 200 people, but we will retain the workplaces of 150 people and hire an additional 50 people.

AS:  So this doesn’t mean 200 new workplaces but 50.

SMA:  200 workplaces.  It is also a value if we preserve 150 jobs.

AS:  Why did napi.hu report at the beginning of July that your company has one registered employee?  Is that correct?

SMA:  That was before the tender, on the one hand, and on the other a on-line economical news portal was surprisingly not able to figure out that one works with subcontractors.

AS:  So they invoice you for their work?

SMA:  A subcontractor does not necessarily invoice us.  In the case of a complex task a partial unit completes work through other companies.

AS:  Do you believe that spending HUF 4.4 billion, including VAT, on media monitoring . . .

SMA: (Giggles)

AS: . . . is in accordance with minimizing public expenditures and the principle of using public money in a rational way?

SMA:  Perhaps when one first hears this it seems like a lot . . .

AS:  . . . it sounds like a lot when one hears it for the second or even the seventh time!

SMA:   I assume that if you come from the central bank you’ve seen these kinds of amounts before.

AS:  They’ve grown a bit since then.  I would like to have seen such numbers back then.

SMA:  We were talking about serious billions at that time, as well.  I think this is a respectable amount given the size of the task, the number of people employed and the complexity of the task.  And I can show this in greater detail to anybody who expresses an interest.

AS:  So that our viewers can understand, what is the benefit of press monitoring, media monitoring, media analysis?   So every day I get a list of what has already been written and said.  How does this help the government in its work, in making decisions, in making this a better world?

SMA: Basically with the flow of information.  The organization or individual who reads it can find out what articles or statements about that person or his organization appeared in the press, or what they said or wrote about topics that are important to him.  They can also learn about competitors or those organizations that are important to him.  So a county police magistrate may be interested in things pertaining to the police magistrate’s office in a neighboring county.  Again, I wish to point out that we are only talking about one of thirty products.  There is also an international media monitoring, that could be an important source of information for those who want to know. . .

AS:  Tell me about a few of the other thirty products.   So we’ve got domestic media analysis, international media analysis . . .

SMA:  News summaries.  Analyses of news summaries.  Quantitative analyses, which means that during a given time what type of information was reported quantitatively, meaning we analysis its content and classify it, as well as media research and media impact studies are also included.

AS:  I don’t want to be sarcastic . . .

SMA:  God forbid! (smiling)

AS: . . . but what we are talking about is that we are not merely selling a bicycle but one with pedals, steering wheel, chain and gears.   We are practically talking about one group of related products.

SMA:  Don’t . . .

AS:  Different analyses are being conducted on the basis of the same data.  I think the major difference is domestic media versus foreign media analyses, because there one must monitor completely different newspapers and media.   But essentially you are working off the same data bases.  So we are not talking about doing thirty completely different things.  You are selling the same thing under 30 different names!

SMA:  By the way, one of the products is examining television viewing data.  I think by now everyone has turned off this program because we are discussing very detailed questions.

AS: We’ll find out on Monday!

SMA:  (Laughing) But I reject the accusation.  We’re talking about 30 different products.  There are, of course, connections among the products because, for example, an article mentioned in a news analysis has to be analyzed as well.  That does not mean we are selling the same thing 30 times.  If you like, continuing with the unfortunate example, we are selling a bicycle, a boat, a car, the chance to go for a walk and a train ticket as well.   So everything pertains to media but involves different tools.

AS:  (Smiling) I respect the fact that you even came and that you are standing your corner.  I would like to ask whether there is any connection between the fact that Tibor Gyõri, a former undersecretary at the Office of the Prime Minister, bought the company in February of 2015, and that the company then became very successful.  Even before that you did not do badly when it came to government orders, and you continue to run the company as the managing director.

SMA:  I’ll take that as a compliment. The truth is that the company I ran, which operated as a closed share holding company, was successful before 2010, as difficult as that is to believe.  It operates close to politics.  It was able to formulate products for which there was a large demand even before 2010.  If we wanted to grow the boredom factor of this show and look at the operating balances of the company, it was also successful before 2010, and between 2010 and 2014, when I owned and managed the company.  It’s true that at the beginning of 2015 a cooperation with Tibor Gyõri was formed in the interest of future development.  But I don’t think that is related
to the fact that we won the tender.

AS:  I think you underestimated yourself and that our viewers are interested about you and this conversation.