The proposed budget for fiscal year 2014 enacts a IKR 300 million (€1.82 million) reduction in RUV‘s budget compared to the previous year, and IKR 400 million (€2.45 million) when compared to the RUV Broadcasting Act, approved by parliamnt in its current form twice this year. RUV’s budget is based on this law.
In addition, the national advertising market has dwindled significantly this year, leading to an added IKR 100 million (€0.6 million) or 5% decline in revenue compared to the previous year.
Essentially, these measures enshrine in law the effects of Iceland’s 2008 financial collapse. The current government has made the decision to permanently cut by more than one billion Icelandic krona (€6.1 million) the revenue due to RUV by law. In addition, as of 2014, RUV‘s ability to compensate by selling advertising and securing sponsorships will be severely limited by the new RUV Broadcasting Act. This will cost RUV a further IKR 400 million annually (€2.25 million). This amounts to a 20% reduction in overall revenue.
Ultimately, these cuts add up to IKR 500 million, by which RUV has to downsize on an annual basis. This means that staff will be cut by 60 or 22% and 39 of those will be laid off immediately. Should parliament decide to further re-purpose the broadcasting fee and thus reduce RUV’s revenue even more, additional staff cuts will have to be made.
“These cuts will inevitably affect RUV’s programming severely. Viewers will see a difference. Our listeners will hear it. Some programs will disappear from screens and airwaves, others will be reduced and others still will change significantly. Our ability to provide news to the Icelandic public will be diminished, as newscasts will be shorter and fewer” said Páll Magnússon, RUV’s Director General.
“It is important to realize that RUV’s revenue from the broadcasting fee has been reduced by 20% over a five-year period. Thus far, we have been able to protect our core programming to a large extent, by reducing cost and increasing revenue from ads and sponsorships. We’ve done as much as possible utilizing those methods. We cannot cut costs even further without layoffs and the new RUV Broadcasting Act dictates that RUV is no longer able to seek advertising and sponsorships in the same way to make up for the funds successive governments have decided to withhold. The market in Iceland is in a slump, leading to an even greater decline in advertising revenues. We have no alternative at this time to meet the cuts demanded by the government but to let staff go and reduce our programming.”
“We will of course do our best to serve RUV’s owners, the general public. But our ability to do so is severely compromised. We have prioritized as much as possible to protect RUV’s core tasks, as laid down by the laws governing RUV and RUV’s policy. We will defend basic public services but the quality of our programs will inevitably be affected.”
Odinn Jonsson, Director of News&Sports
