Three Major Media Outlets Receive 63% of Government Support

Nineteen privately-owned media outlets will receive financial support from the government this year RÚV reports. The allocation committee received 23 applications requesting a combined ISK 880 million [$6.92 million; €5.84 million] in support. A total of ISK 389 million [$3.06 million; €2.58 million] was distributed to 19 outlets, although 63% this funding went to just three major companies. Two applications were rejected on the basis of having been received after the submission deadline.

Media support applications were reviewed by a three-person allocation committee overseen by the Ministry of Education, Culture, and Science. The committee was staffed by Supreme Court attorney Árni Vilhjálmsson, accountant Stefán Svavarsson, and head of the journalism program at the University of Iceland, Valgerður Anna Jóhannsdóttir, and advised in its efforts by the Icelandic Media Commission.

The highest allocations of roughly ISK 81 million each [$637,443; €537,680] went to three major parent companies. These are Árvakur hf, which publishes the daily paper Morgunblaðið, its online outlet mbl.is, and the radio station K100; Sýn ehf, which operates the Stöð 2 TV channel, the Bylgjan radio station, and the online paper Vísir; and Torg ehf, which publishes the daily paper Fréttablaðið, its online outlet frettabladid.is, and the Hringbraut TV station.

After the top three allocations, the next five grantees were: The Farmers Association of Iceland, which publishes the free farm- and agriculture-focused paper Bændablaðið (ISK 12.4 million [$97,560; €82,333]); online paper Kjarninn (ISK 14.4 million [$113,296; €95,613]); the N4 TV channel (ISK 19.4 million [$152,647; €128,812]); investigative outlet Stundin (ISK 25.3 million [$199,055; €167,986]); and Myllusetur ehf, which publishes the business-focused paper Viðskiptablaðið (ISK 27 million [$212,397; €179,274]).

A temporary initiative
The funding comes as a result of legislation proposed by Minister of Culture Lilja Alfreðsdóttir and passed by parliament earlier this year. Per the terms of the legislation, the state will grant up to ISK 400 million ($3.3 million/€2.7 million) to privately-owned media companies, which can apply for up to 25% reimbursement of eligible expenses: salary costs and payments to contractors working on collecting and disseminating news.

The legislation is a temporary initiative: it provides grants to independent Icelandic media companies this year and next year. Parliament passed similar legislation in 2020 to establish a fund to help independent media companies address the impact of the COVID-19 pandemic. Some journalists have argued that such funding is biased toward Iceland’s largest media companies at the expense of smaller, local media.

Operating at a loss
This year’s allocations to Árvakur, Sýn, and Torg mark a shift from last year—two for the worse, and one for the better. In 2020, Árvakur hf received ISK 100 million [$786,967; €663,807] and Sýn ehf received ISK 91 million [$716,028; €604,064]. Torg ehf, on the other hand, received more money this year—in 2020, it was allocated ISK 64.7 million [$509,088; €429,596].

However, in spite of the substantial funding it received, Árvakur operated at a loss of ISK 75 million [$589,854; €498,017] last year. It has, indeed, operated at a loss every year since the company was bought by new owners following the crash in 2009. Sýn has also been operating at a loss. Last year, it lost ISK 405 million [$3.18 million; €2.68 million] and according to current figures, it is still operating at a loss this year. No current data was available for Torg, but according to data obtained from the Icelandic Revenue and Customs office, in 2019, it operated at a loss of ISK 212 million [$1.67 million; €1.41 million].

‘It’s crazy that we’re taking money from the state’
Stundin was quick to point out that the big three received over half of this year’s media grant allocations—63%, to be precise. Interestingly, the allocations process and distribution has drawn criticism even from those who benefit from it. Just last week, Þórhallur Gunnarsson, the head of media and broadcasting at Vodafone and Stöð 2 (owned by Sýn ehf), remarked in an interview that he felt it was wrong for large media companies, such as Sýn and Árvakur, to receive special state support, which he thinks should be reserved for smaller media entities, rural media outlets, and publications with a focus on investigative journalism.

“It’s crazy that we’re taking money from the state and are supported by the government,” said Þórhallur. “We are a hugely powerful media outlet, with a large subscriber base. We have countless opportunities.”

Þórhallur was echoed in his views by one of the owners and editors of the online newspaper Kjarninn, Þórður Snær Júlíusson. “We should improve the whole media landscape with multifaceted measures that benefit large and small outlets alike. Grants for small and growing media companies. And in return, the nation gets a robust and diverse media. Everyone wins.”

Iceland Review is one of the independent publications receiving financial support this year.

Icelandic Government Launches Fund to Support Private Media Companies

Private media companies will have one month to apply for financial support through a newly-approved government fund. Minister of Education and Culture Lilja Alfreðsdóttir has signed the regulation, which will provide ISK 400 million ($2.9m/€2.5m) in support to media companies on the basis of applications. The fund is intented to help media address the impact of the COVID-19 pandemic, which has caused advertising and other revenue to plummet despite a rise in media consumption.

Through the initiative, individual media companies could receive support amounting to a maximum of 25% of their salary costs to or contract payments to reporters, journalists, editors, assistant editors, photographers, and cameramen for the dissemination of news and news-related content. No single media company may receive more than 25% of the funding, or ISK 100 million.

In order to be eligible for the funding, a media company must fulfil certain criteria, including being registered with the Icelandic Media Committee or having a licence for distribution of audio and video material. The company must also produce diverse material intended for the general Icelandic public (with the exception of regional media companies). The company may not have been in financial difficulties before this year – small businesses are exempted from this criterium, provided they do not undergo liquidation or bankruptcy proceedings. The application deadline is August 7 and the applications should be processed by September 1.

Smaller Media Companies Left Out, Says Editor

Though it is a temporary measure, the fund is based on a controversial bill intended to support private media companies by the same amount on an annual basis. The bill was never passed – it was dropped from the Parliament’s agenda last winter. Þórður Snær Júlíusson, editor of Kjarninn, criticised the changes within the initiative, which he says disadvantage smaller media companies. “Here was supposed to be a funding system that was supposed to promote diversity and pluralism and benefit, among other things, small media all over the country, but at the last moment, after almost four years, it is decided that the first allotment should be allocated, as it looks to me now, to three media companies,” he told RÚV, referring to Morgunblaðið publisher Árvakur; Fréttablaðið publisher Torg; and Sýn, which publishes Vísir and runs television news station Stöð 2. Supporting these three companies distorts competition for smaller media, and also rewards companies whose operations are unsustainable, Þórður argues.

Heiðar Guðjónsson, Sýn’s CEO, celebrated the bill, stating it was long overdue. “The government agreed more than a year ago, when working on the media bill, that this amount, 400 million, would be annual, so I hope that is allocated.”

As elsewhere in the world, Icelandic media companies are facing a challenging operational environment. One of the country’s largest papers, Morgunblaðiðlaid off fifteen employees late last year, following exponentially growing losses over the past three years. Icelandic journalists organised worker strikes last year when wage negotiations came to a standstill.