Iceland drops planned 2.8 billion króna ad cap on RÚV

Iceland has scrapped a plan to cap advertising revenue at RÚV, the country’s public broadcaster, at 2.8 billion króna. The government will still cut RÚV’s annual funding from the broadcasting fee by an amount equal to 10 percent of its advertising revenue and redirect that money to privately owned media, mbl.is reported.

The changes are part of a bill to amend the legislation governing RÚV. The government approved the bill last week and has submitted it to parliament. The minister for culture, innovation and higher education is due to present it on Wednesday, with the aim of having it become law in January 2027.

The proposed advertising cap was dropped after consultation, which included concerns that it could lead to advertising being underpriced in Iceland. Six submissions were received on the draft bill between September 25 and October 12.

The bill is intended to reduce RÚV’s presence in the media market and forms part of the government’s media action plan, which also aims to increase funding for private media. It would also remove requirements for RÚV to distribute a minimum number of radio and television channels nationwide.

The government has brought forward the planned service agreement between the minister and RÚV. It is now due to take effect in mid-2027, rather than at the start of 2028. The agreement will require greater cooperation between RÚV and private media, including sharing equipment.

The government did not accept most submissions calling for a larger funding cut. Its analysis found that the proposed reduction would negatively affect RÚV’s cash flow, even after accounting for a measure related to the broadcaster’s pension obligations. RÚV is already reducing staff numbers under its current revenue forecast; a further cut could lead to more job losses, a reduced programme schedule, or both.