STATE FINANCIAL SUPPORT FOR PRINT MEDIA: COUNCIL OF EUROPE STANDARDS AND EUROPEAN PRACTICES Expert report

Abstract

This report is a summary of the best and worst practices in funding local media in Europe with a particular focus on Ukraine.

Full text

STATE FINANCIAL SUPPORT
FOR PRINT MEDIA:
COUNCIL OF EUROPE STANDARDS
AND EUROPEAN PRACTICES
Prepared by
Marius Dragomir,
Council of Europe Consultant
Expert report

STATE FINANCIAL SUPPORT
FOR PRINT MEDIA:
COUNCIL OF EUROPE STANDARDS
AND EUROPEAN PRACTICES
Expert report

STATE FINANCIAL SUPPORT
FOR PRINT MEDIA:
COUNCIL OF EUROPE STANDARDS AND
EUROPEAN PRACTICES
Expert report
Prepared by:
Marius Dragomir,
Council of Europe Consultant
This publication was produced with the
nancial support of the European Union and
the Council of Europe. The views expressed
herein can in no way be taken to reect the
ocial opinion of either party.
The reproduction of extracts (up to 500
words) is authorised, except for commercial
purposes as long as the integrity of the text
is preserved, the excerpt is not used out
of context, does not provide incomplete
information or does not otherwise mislead
the reader as to the nature, scope or content
of the text. The source text must always
be acknowledged as follows “© Council of
Europe, year of the publication”. All other
requests concerning the reproduction/
translation of all or part of the document,
should be addressed to the Directorate
of Communications, Council of Europe
(F-67075 Strasbourg Cedex or publishing@
coe.int).
Design and cover by Maria Zhukevych.
Photo: Council of Europe,
www.shutterstock.com
Council of Europe Publishing
F-67075 Strasbourg CEDEX
http://book.coe.int
© Council of Europe, November 2021.
All rights reserved.
Licensed to the European Union
under conditions.
This publication was elaborated in the
framework of the Project “EU and Council
of Europe working together to support
freedom of media in Ukraine” that is aimed
to enhance the role of media, its freedom
and safety, and the public broadcaster as
an instrument for consensus building in the
Ukrainian society.
More information about the Project:
https://cutt.ly/jkhadLM
Follow the Project in the social media:
https://www.facebook.com/CoEUPSIS

5
Table of Contents
INTRODUCTION........................................................................................................................ 6
SUMMARY................................................................................................................................... 8
RELEVANT COUNCIL OF EUROPE AND OTHER INTERNATIONAL
STANDARDS.............................................................................................................................. 9
MAIN FORMS OF STATE FINANCIAL SUPPORT FOR PRINT MEDIA......................... 11
STATE FUNDING SUPPORT: STRENGTHS AND WEAKNESSES................................... 18
CONCLUDING OBSERVATIONS/RECOMMENDATIONS............................................... 24

6
INTRODUCTION
In the past decade or so, media funding models have undergone signicant changes.
In the pre-internet era, in countries with a free market economy, the dominant
nancing model of the media was anchored in a combination of commercial
revenues and public funding. Commercial income consisted primarily of revenues
generated through sales of advertising or sponsorships. Public funding came in
three main forms: funding raised through taxes and levies (imposed by the state
on households or companies), government subsidies (state budget allocations to
media outlets) and state advertising (contracts for services between state authorities
and media companies).
Generally, before the digital revolution, private broadcast media in Europe were
funded mostly through advertising, rarely receiving public funding. In contrast,
public service broadcasters were nanced chiey through public funding, the most
common form of public nances being state subsidies or revenues from license fee,
a form of taxation imposed on all households with access to public media. The print
media sector traditionally relied on sales of copies (that generated between 20%
and 40% of the total annual income of an average newspaper, depending on the
country, newspaper and period) and advertising sales. On top of that, both print
media and broadcasters beneted from funding disbursed by governments in the
form of state advertising: funds from the state budget awarded to media outlets
as payment for social or public service campaigns, or for advertising of services
oered by state-run media companies. In some countries, various other forms of
nancial support supplemented the revenues of print media outlets. They included
tax exemptions or state funds purposely established to support economically
vulnerable publishers.
Although many media outlets continue to rely on most of these sources of revenue,
the digital revolution has fundamentally changed the media business models.
Privately owned broadcast media continue to rely on advertising revenues to cover
the bulk of their expenditure. However, they have been facing tough competition
from digital platforms, including independent news portals, video-sharing
platforms and providers of streaming services such as YouTube, Netix and
others. As a result, in recent years many private broadcasters have been investing
heavily, although many of them belatedly, in new, more lucrative forms of content
distribution.
On the other hand, the print media sector has been badly disrupted by the digital
transformation. It has incurred massive losses because of the decline both in sale
of copies (as readers have migrated to the internet) and advertising revenues (as
a sheer amount of newly established digital players, including powerful tech
companies such as Facebook or Google, have been increasingly eating into the
overall advertising pie). To counter these losses, an increasing number of print media
outlets began, many of them belatedly, to move their operations online as a way to
tap into the income stream generated in the digital market, primarily through web
advertising and digital subscriptions. Large media outlets, such as newspapers
with a large readership and the potential to attract healthy ad revenues and sell
digital subscriptions, have been successful in osetting, thanks to their digital
expansion, part of or all the losses incurred from print.

7
There are also examples of much smaller media outlets that managed to reach
nancial sustainability through a subscription-based model. Dennik N, for
example, a news portal launched in 2015 by a group of Slovak journalists, reached
sustainability within a year or so with nearly 23,000 subscribers1. By 2020, the portal
further grew to 65,000 subscribers and an annual prot of €1.2m2.
The internet not only disrupted the media eld, but also created more revenue
opportunities for media, including crowdfunding (where citizens donate money to
media outlets to help them run various editorial projects) or sales of memberships,
among others.
Nevertheless, in spite of some successes, the media sector in Europe is still reeling
from waves of disruption provoked by technology as well as a series of economic
crises that shook the world during the past 15 years, including the 2007 nancial
meltdown and the ongoing crisis triggered by the Covid-19 pandemic.
Digital revenues in the European media sector have experienced a healthy growth,
yet that was not enough to oset the losses from print media operations. Between
2014 and 2017, the European print press saw its turnover decrease by a compound
annual growth rate (CAGR) of 0.33 % to €73.3bn3.
These shifts in funding models have boosted the importance of the non-commercial
sources of nancing in the overall media funding mix.
Some of these sources of funds have a baneful eect on the editorial independence
and integrity of media outlets. For example, informal payments are common in many
countries, according to data from the Center for Media, Data & Society (CMDS).
These payments are nancial contributions usually made by political players,
directly or via corporations, to media outlets or journalists in an attempt to gain
their favor and ultimately inuence editorial coverage4.
There are also sources of non-commercial funding that have a generally positive
impact on the media. For example, grants from philanthropic organisations such
as private foundations or institutional donors (state-funded development agencies)
have played a key role in the past decade and more in helping independent media
outlets to survive nancially and focus on their journalism.
In this rapidly changing environment, the role of public funding has also signicantly
expanded as a growing number of media companies became increasingly reliant on
government funds.
1 Filip Struharik, “Independent news website Denník N in 2018 (infographic)”, Medium, 8 January 2019,
available online at https://medium.com/@lip_struharik/independent-news-website-denn%C3%ADk-n-in-
2018-infographic-765fc72cf95 (accessed on 1 June 2021).
2 Neha Gupta, “How Slovakia’s Denník N hit 65K paying subscribers in 6 years”, 21 January 2021, World
Association of Newspapers (WAN-IFRA), available online at https://wan-ifra.org/2021/01/how-slovakias-
dennik-n-hit-61k-paying-subscribers-in-6-years/ (accessed on 4 June 2021).
3 European Parliament, “Europe’s media in the digital decade. An action plan to support recovery and
transformation in the news media sector”, Study requested by the CULT Committee, May 2021, available
online at https://www.europarl.europa.eu/RegData/etudes/STUD/2021/690873/IPOL_STU(2021)690873_
EN.pdf (accessed on 21 June 2021).
4 Marius Dragomir, “Cine nanează jurnalismul astăzi: cele mai recente tendine”, 2020, available online
(in Romanian) at https://mediaforum.md/upload/fmm2020-studiu-dragomir-1pdf-5fbe704ce948e.pdf
(accessed on 15 June 2021).

8
The impact of public funding on the media can be both harmful and benecial.
Public media outlets nanced through direct state subsidies, for example, tend to
be more government-controlled than those nanced by revenues from indirect
public funding (such as license fee or other forms of taxation). State advertising
also tends to badly affect editorial independence. Experience from most of the
countries where this form of funding is used shows that, disbursed without clear
and transparent criteria, state advertising becomes a tool in the government’s
hands used to control the editorial coverage of media outlets that receive such
funding.
For newspaper publishers, the shifts in state nancial support are even more
important because, in recent years, these companies have become deeply
vulnerable to economic shocks, struggling to identify a revenue model that can
both ensure their economic viability and protect their editorial autonomy.
The aim of this paper is to present the latest trends in state nancial support for
the print media by analysing the main existing models of funding. Featuring
several case studies from Council of Europe countries, the paper will highlight the
principal strengths and weaknesses of each model and put forward a set of
recommendations with regard to support of the local print media in Ukraine.
SUMMARY
As the local print media in Ukraine has been making a transition from a
municipality-controlled and funded sector to a desired independent and
nancially autonomous media model, it is apparent that the chance for survival
and later growth of these media outlets is one or another form of public support.
Following years of editorial control by local governments, the lack of a business
model as a result of the changes in technology and media that aected the local
media markets and a transitional period towards a privately owned model that was
marked by delays in the application of the law or awed implementation of the
legal provisions that guided the reform, the local print media sector in Ukraine is
in urgent need of support.
The design of a system of funding for the local print media should be based on a
careful examination of the form of public funding models that are most suitable for
Ukraine at the moment.
In the rst place, the creation of a public fund mechanism for the support of local
media should be fully in line with a set of key Council of Europe principles put
forward in a series of standard-setting resolutions and recommendations including
fairness, transparency, adequacy as well as Council of Europe funding-related
recommendations for subsidies for media outlets focused on minority languages.
The chosen mechanism should also be built in such a way that it will prevent political
interference and market distortion.
Of the four main types of funding models for local print media that exist in Europe,
the two most appropriate for Ukraine are the project-based support mechanism and
the direct state subsidy fund. The former ensures more independence, preventing

9
the misuse of public funds by authorities to gain control over the editorial agenda
of the media. Yet, it may not be sucient to secure the nancial sustainability of
the media and doesn’t provide media outlets the predictability and stability that
are so much in need at this moment in their reform process. Hence, a system of
state subsidies, in the form of a media fund that would disburse nances to local
print media across the board would probably be the most pragmatic solution for
the moment.
Some hybrid forms of state intervention, which could include a combination of the
state subsidy fund and the project-based model or addition of tax advantages for
media outlets could also be envisioned.
As experience in other countries described in this report shows, whatever form of
public funding assistance is created and implemented, it is vital that the bodies
or structures through which funding is disbursed by the state have governance
mechanisms that ensure their independence. That can be achieved only by
appointing independent experts and professionals in these bodies instead of
politically aliated persons or government representatives.
Of the most common forms of public funding for the media in Europe, the least
appropriate for Ukraine is state advertising. Awarded by state bodies or state-
owned companies, this form of nancing is the most problematic as it is habitually
misused by authorities to inuence the editorial agenda of the media outlets.
RELEVANT COUNCIL OF EUROPE AND OTHER
INTERNATIONAL STANDARDS
Council of Europe has put forward a series of recommendations regarding the best
practices that need to be implemented in nancing media outlets.
In a 2018 Recommendation on media pluralism and transparency of media
ownership, it called on states to ensure “stable, sustainable, transparent and
adequate funding for public service media on a multiyear basis in order to guarantee
their independence from governmental, political and market pressures.” In the
same recommendation, the Council of Europe also called on states to encourage
and support “the establishment and functioning of minority, regional, local and not-
for-prot community media, including by providing nancial mechanisms to foster
their development.5” The same recommendation also highlights the importance of
transparency around the sources of nancing of media outlets, calling on states to
adopt laws and regulations that require the disclosure of information on the sources
of state funding in the media, including advertising, grants and loans. States are also
encouraged by the Council of Europe to promote the disclosure by media outlets
of nancial relations with other media, advertising agencies or political parties that
“may have an inuence on editorial independence.6”
5 Recommendation CM/Rec (2018)1 of the Committee of Ministers to member States on media pluralism
and transparency of media ownership (Adopted by the Committee of Ministers on 7 March 2018 at the
1309th meeting of the Ministers’ Deputies), available online at https://search.coe.int/cm/Pages/result_details.
aspx?ObjectId=0900001680790e13 (accessed on 10 June 2021).
6 Recommendation CM/Rec (2018)1 of the Committee of Ministers to member States on media pluralism and
transparency of media ownership, cit.

10
In the Recommendation CM/Rec (2017x)xx, Council of Europe sets criteria for
member states aimed at ensuring high levels of transparency around sources
of nancing of media outlets. The Council of Europe encourages member states
to adopt and implement laws that require disclosure of information about “the
sources of income, including from State and other funding mechanisms and (State)
advertising, of media outlets” as well as “on structural relationships or contractual
cooperation with other media or advertising companies, political parties or the
State, including in respect of State advertising.7”
As a response to an increasingly competitive media environment, the Council of
Europe Parliamentary Assembly Recommendation 1878 (2009) highlights the
importance of public service media as a valuable source of unbiased information,
suggesting the use of a combination of dierent forms of funding to nance public
service media. The same document states that the funding models for public service
media must “meet the public service requirement of accessibility and aordability
for the public at large.8”
Another document, Resolution 1636 (2008) of the Parliamentary Assembly of the
Council of Europe states that member countries should take concrete positive action
to promote media pluralism, stressing that state support must be fair. According
to the resolution, “media freedom in a democracy requires fair and neutral state
subsidies to the media” and that an individual state media outlet that is subsidized
in a preferential way “could be abused for political inuence.9”
The Recommendation No. R (99) of the Committee of Ministers also envisages,
among support measures for the media, “the possibility of introducing, with a view
to enhancing media pluralism and diversity, direct or indirect nancial support
schemes for both the print and broadcast media, in particular at the regional and
local levels.” It adds that “subsidies for media entities printing or broadcasting in a
minority language could also be considered.10”
By ratifying the European Charter for Regional or Minority Languages, Ukraine also
committed to encourage the creation or the maintenance of at least one newspaper
in the regional or minority languages as well as to “cover the additional costs of
those media which use regional or minority languages, wherever the law provides
for nancial assistance in general for the media; or to apply existing measures for
nancial assistance also to audiovisual productions in the regional or minority
languages.11”
7 Council of Europe (2016), Recommendation CM/Rec (2017x)xx of the Committee of Ministers to
member states on media pluralism and transparency of media ownership, Second revised draft, available
online at https://rm.coe.int/recommendation-cm-rec-2017x-xx-of-the-committee-of-ministers-to-
member/168073197e (accessed on 12 August 2021).
8 Recommendation 1878, Funding of public service broadcasting (2009), Parliamentary Assembly,
Council of Europe, available online at http://assembly.coe.int/nw/xml/xref/xref-xml2html-en.
asp?leid=17763&lang=en (accessed on 15 August 2021).
9 Resolution 1636 (2008), Parliamentary Assembly, 3 October 2008, available online at http://assembly.coe.
int/nw/xml/xref/xref-xml2html-en.asp?leid=17684&lang=en (accessed on 12 August 2021).
10 Recommendation No. R (99) 1 of the Committee of Ministers to member states on measures to promote
media pluralism, Adopted by the Committee of Ministers on 19 January 1999, available online at https://
rm.coe.int/16804fa377 (accessed on 12 July 2021).
11 European Charter for Regional or Minority Languages, Council of Europe, Strasbourg, 5 November 1992,
available online at https://rm.coe.int/1680695175 (accessed on 14 August 2021). See also “Reservations and
Declarations for Treaty No.148 - European Charter for Regional or Minority Languages”, available online at
https://www.coe.int/en/web/conventions/full-list/-/conventions/rms/0900001680695175?module=declarat
ions-by-treaty&numSte=148&codeNature=0 (accessed on 15 August 2021).

11
There is no specific EU-level legislation that regulates state financial support
for the newspaper sector. However, such support is governed by the European
Commission through the EU legislation on state aid. The legislation is aimed
at ensuring that state aid and subsidies are governed by clear and fair rules. The
Commission is set to intervene in cases where state aid is found to distort competition
by giving unfair economic advantages to some institutions and businesses over
others. Nevertheless, the Commission has rarely intervened in cases of state aid for
print media in the past. According to the database of the Commission’s Directorate-
General for Competition, a total of eight state aid cases in the print media industry
were recorded between 2000 and 2021. They included:
• two cases of state aid to cultural periodicals in Spain;
• two cases in Denmark, one regarding funding for innovation to print
media and a second for nancial aid to local newspapers;
• two cases in Greece concerning state aid for the restructuring process of
various print media outlets;
• one case in each Portugal and Sweden related to state nancial support to
a local newspaper and to a group of newspapers, respectively12.
According to the Commission, state aid can be compatible with the single market
rules if it pursues a goal of common interest, is proportionate and does not oer
its recipients an undue advantage against their competitors. In the Sweden case,
for example, the Commission argued that the Swedish government did not meet
the proportionality test. In plain language, the Commission argued that Sweden
doled out excessive amounts of nancing to large publishers without taking into
consideration the proportion of the oered aid compared to, for example, the size of
the newspapers’ expenditure. It asked Sweden to intervene to rectify the situation.
Other than that, most of the international standards regarding public funding for
media focus on transparency and fairness. The 2011 General Comment of the UN
Human Rights Committee stresses that the criteria in allocation the funding from
license fee, the main source of revenue for some public service broadcasters
in Europe, should be “reasonable and objective, clear, transparent, non-
discriminatory.13”
MAIN FORMS OF STATE FINANCIAL SUPPORT FOR
PRINT MEDIA
The amount of state support to print media in Europe is much lower than the
support given by governments to broadcast media (especially to public media
companies).
12 For more about state aid cases, see the DG Competition database at https://ec.europa.eu/competition/
elojade/isef/index.cfm?clear=1&policy_area_id=3 (accessed on 10 August 2021).
13 International Covenant on Civil and Political Rights, Human Rights Committee 102nd session, General
comment No. 34, 12 September 2011, available online at https://www2.ohchr.org/english/bodies/hrc/docs/
gc34.pdf (accessed on 14 June 2021).

12
There are four main forms of nancial support for print media:
• Direct subsidies (a form of direct state support awarded to media outlets upon
approval by the government);
• Tax advantages (reductions to taxes or full tax exemptions for the print media
sector, usually following a change in legislation);
• State advertising (awarding of funding by government bodies in the form of
advertising contracts with media outlets for purchase of specic services, i.e.
advertisements for state-owned media companies or payments for social
campaigns);
• Project-based support schemes (funding that covers specic needs of print
media outlets, i.e. training and skills development, upgrade of technology or
facilities, or restructuring processes).
Direct subsidies
Direct subsidies in the print media sector are relatively rare in Europe. Austria has
one of the most advanced and functioning state subsidy systems for print media
that ensures that government funding goes to all the newspapers in the country,
the sole example of a blanket policy of universal government subsidization of print
media in Europe.
The system is based on the Press Subsidies Act adopted back in 2004. The subsidy
for the Austrian press sector totalled €8.9m in 2019, according to the latest data
available14. The Austrian Communications Authority (KommAustria), the country’s
media regulator, is in charge of disbursing the state subsidies to the print media
companies.
The subsidies for Austrian press are awarded in three categories:
• General subsidies
These funds are distributed equally to all the daily newspapers that are eligible for
the scheme. A publisher that owns more than one newspaper in the country gets
20% less for each of its newspapers. In the case of weeklies, the subsidy is calculated
according to the number of sold subscriptions and issues, the magazines with a
slimmer subscription base receiving larger subsidies. Under this budget line, a total
of 11 dailies and 37 weeklies received state funding in 2019.
• Special diversity subsidies
This fund is used to nance daily newspapers that are not dominant (i.e., that have
lower readership and ad sales revenues). In 2019, the fund was distributed to four
dailies.
• Quality media subsidies
These subsidies are allocated to newspapers that promote quality. More specically,
14 Paul Clemens Murschetz, “Government support for news media post-Covid-19: the lesson of Austria’s
press subsidy system”, European Journalism Observatory, 19 June 2020, available online at https://en.ejo.
ch/media-economics/government-support-for-news-media-post-covid-19-the-lesson-of-austrias-press-
subsidy-system (accessed on 15 June 2021).

13
the funds are used to cover various activities run by newspapers to promote quality.
They include nancing of training activities for journalists, costs incurred by hiring
foreign correspondents or the cost of oering newspapers free of charge to various
institutions (i.e., schools). In total, 58 newspapers received funding for these purposes
in 201915.
Systems of state subsidies for print media are also in place in several Nordic countries.
Finland used to have a solid system of state subsidies for print media. Funds from
the state budget were used by the Finnish government to assist the nancially weak
party press, a measure whose goal was to promote political pluralism in the Finnish
society. The scheme was found to violate the EU State Aid regulations and was
thus canned in 200816. Finland has since continued to use state subsidies to fund
newspapers published in national minority languages (such as Sami and Romani).
These subsidies are distributed by the Ministry of Transport and Communications17.
Sweden has had for decades a policy aimed at supporting print media, especially in
areas where news media are not available because they can’t economically survive.
Most news media in Sweden receive government subsidies to maintain their viability.
Additional subsidies are given to publications whose original content accounts for
at least 55% of their total output and that have a minimum of 1,500 consumers of
news in Sweden18. In 2019, the state subsidies for print titles in Sweden increased by
10%, the funds aimed at covering the publishers’ distribution costs jumped by 50%
and grants up to SEK 1m (nearly €100,000) were made available for publications
in so-called “news deserts”, areas with little to no presence of local news providers.
The body in charge of distributing press subsidies in Sweden is the Press and
Broadcasting Agency, which operates under the Ministry of Culture.
The agency consists of two decision-making bodies, the Swedish Broadcasting
Commission, in charge of investigating whether broadcast content complies with
regulations following complaints lodged by the public, and the Media Support
Board, which handles requests for subsidies submitted by media companies (mainly
print publishers)19.
The Media Support Board consists of a maximum of 14 members including a chair
and vice-chair. They are all appointed by the government, yet to ensure the body’s
independence, part of the board members must come from the industry and
academia while the chair and vice-chair must have experience as judges. Seven of
the 11 regular members of the board in 2021 were independent experts (professors
and people with expertise in journalism, design, publishing and law) and the other
15 Paul Clemens Murschetz, “Government support for news media post-Covid-19…”, cit.
16 For unknown reasons, the case is not recorded in the EC Competition DG Database, according to our latest
search (15 August 2021).
17 Media Landscapes: Finland, European Journalism Centre (EJC), available online at https://
medialandscapes.org/country/nland (accessed on 18 June 2021).
18 Oscar Westlund, “Sweden. Reuters Institute for the Study of Journalism-Digital News Report 2019”, 2020,
available online at http://www.digitalnewsreport.org/survey/2019/sweden-2019/ (accessed on 18 June
2021).
19 See more about the Commission at its website https://www.mprt.se (accessed on 2 August 2021).

14
four were former MPs.
In 2021, the Swedish government announced that it increased its subsidy budget
for the media to SEK 100m (almost €9.9m). The funds are used, among other things,
to enable the distribution of printed newspapers in areas where distribution of print
publications is dicult and to promote journalism across the country.
France also has a system of direct subsidies for the press, one of the oldest subsidy
programmes for media in Europe, established in the post-war years. In 2017, the
French government approved a budget of €262m for direct press subsidies, a slight
increase compared to the previous year, according to the latest data available20.
The French system of state subsidies for non-electronic media consists of the
following funds:
• Press subsidies (nearly 50% of the total scheme), consisting of aid for
distribution of newspapers (especially costs related to home delivery
services), aid for pluralism (covering costs of national and regional
publications that have little advertising revenues), and aid for
modernization of newsrooms in print media outlets;
• A small amount is devoted entirely to support for local media;
• Allowances for France’s national news agency (Agence France-Presse, AFP),
mostly to enable the agency to full its public service mission.
Tax privileges
Most countries in Europe have systems of reduced taxation aimed at nancially
supporting print media publishers. Because of the pandemic, which economically
aected news media across the globe, a number of EU countries lowered the VAT
for both the press and digital media in the past year. But many of them had such
systems of tax privileges for print media in place before.
Today, the special VAT rates for print media range between nil (Belgium, Denmark,
Norway or the UK) and 12% in Latvia.
To qualify for a lower VAT, various rules are imposed on newspaper publishers in
dierent countries.
In France, for example, where a VAT rate of 2.1% is imposed on printed newspapers
and magazines, a signicant reduction from the standard 20% VAT, publications
that want to benet from the reduced taxation must be ocially recognised by the
Commission Paritaire des Publications et Agences de Presse (CPPAP), a state-run
body whose mission is to advise the government on the economic regulation of
the print media. The CPPAP is chaired by a state ocial and managed by a group of
industry representatives (mostly newspaper publishers).
In other countries, newspapers have to comply with some other rules to qualify for
20 “Supporting the media: State measures around the world”, WAN-IFRA, 2017.

15
the lower VAT. In Estonia and Finland, for example, only newspapers that have been
sold on subscription for a certain period of time are entitled to the reduced VAT. In
Poland, newspapers that sell advertising for at least 67% of their print space are
excluded from the tax reduction privileges. In Spain, only newspapers that get less
than 75% of their revenue from advertising are entitled to the reduced VAT rates.
VAT rates for print publishers in Europe
Country Standard VAT rate Special rate for
newspapers
Austria 20% 10%
Belgium 21% 0%
Bulgaria 20% -
Croatia 25% 5%
Cyprus 19% 5%
Czech Republic 21% 10%
Denmark 25% 0%
Estonia 20% 9%
Finland 24% 10%
France 20% 2,1%
Germany 16% 7%
Greece 24% 6%
Hungary 27% 5%
Iceland 24% 11%
Ireland 23% 9%
Italy 22% 4%
Latvia 21% 12%
Lithuania 21% 9%
Luxembourg 17% 3%
Malta 18% 5%
Netherlands 21% 9%
Norway 25% 0%
Poland 23% 8%
Portugal 23% 6%
Romania 19% 5%
Slovakia 20% -
Slovenia 22% 9,5%
Spain 21% 4%
Sweden 25% 6%
UK 20% 0%
Source: CMDS Marius Dragomir, based on data from WAN-IFRA, and data collected through
monitoring of scal code changes in Europe (CMDS, 2017-2021).

16
State advertising support
Many countries in Europe and elsewhere have state advertising mechanisms in
place. This form of public spending is dierent from the direct state subsidy funding
in that it is contractual. Directly or through state bodies specially designated to
contract advertising in the media, the government purchases space in the media
(both broadcasting groups and print media outlets) to either run public or social
campaigns or to promote products or services oered by state-owned companies.
Some countries spend substantial amounts of money on state advertising. In
Hungary, in 2018, the state advertising totalled €300m, which represented a third
of the entire Hungarian ad market. The following year, the state increased the
advertising budget to €450m21.
Television stations are usually favoured by governments in the process of
distribution of state advertising funds thanks mostly to their wider coverage and
popularity. In Georgia, for example, the government spent some US$ 2.7m in state
advertising, the largest part of it, some 56%, going to nationwide television stations22.
State advertising is an important source of funding for many media outlets, especially
for those that are struggling to survive nancially. This source of funding is also
problematic as it is often misused by authorities to inuence the editorial coverage
of the media outlets. In 21 out of 30 countries in Europe monitored by the Centre
for Media Pluralism and Media Freedom, an EU-nanced research outt, allocation
of state advertising carries high risks because the process lacks a framework that
would ensure distribution of state funds based on fair and transparent rules23. (For an
assessment of the risks and opportunities of all the forms of state funding support, see
State funding support: strengths and weaknesses below)
Project-based funding
Some countries also have systems of nancial support for print media where funding
is awarded on a project basis.
In the Netherlands, for example, there is a system of nancial support for the press
sector that aims at improving the quality and viability of the media. Unlike direct
state subsidies, this system is linked to specic projects, the funding being disbursed
to media outlets that need it to cover special costs or make investments to improve
their operations. The system thus works as a grant-making fund whose mission is to
nance media outlets that want to improve their journalism or their operations.
21 Council of Europe, Commissioner for Human Rights, “Memorandum on freedom of expression and media
freedom in Hungary”, Strasbourg, 30 March 2021, available online at https://rm.coe.int/memorandum-on-
freedom-of-expression-and-media-freedom-in-hungary/1680a1e67e (accessed on 2 June 2021).
22 Giorgi Jangiani, Marius Dragomir, “Media Inuence Matrix. Funding Journalism: Georgia”, CMDS, Budapest,
2019, available online at https://cmds.ceu.edu/sites/cmcs.ceu.hu/les/attachment/basicpage/1483/
mimgeorgiafundingnal.pdf (accessed on 19 June 2021).
23 See more on the website of the Media Pluralism Monitor, https://cmpf.eui.eu/mpm2020-results/ (accessed
on 21 June 2021).

17
The state nancing in the Dutch support system is disbursed through two funds:
• Dutch Journalism Fund (Stimuleringsfonds voor de Journalistiek or
SVDJ)
This fund, a total of €6m in 2019, is spent on assisting media outlets in
experimenting with new platforms or business models to improve their economic
viability or quality of their output. The funds are disbursed through four key schemes
as following:
» Accelerator Scheme: nancial support for media startups or established
media companies that want to test a new platform or solution;
» Accelerator Light: a programme assisting journalists to fund their
innovation-focused projects;
» Booster: a scheme aimed at supporting digital or print media that are
published at least monthly to help them do their work;
» Research: funding for research whose results are believed to improve the
Dutch journalism sector.
The SVDJ operates as an independent administrative body (a statute known in
the Netherlands as ZBO), with a budget from the Ministry of Education, Culture
and Science. The main governing body in charge of funding-related decisions at
SVDJ is a Board whose members are appointed by the ministry. The appointments
are made based on the recommendation of the SVDJ’s sta to ensure the SVDJ’s
independence. The sta at the SVDJ consists of a bureau, which supports the
Board in its daily activity. To do its work, the bureau collaborates with externally
commissioned freelance journalists24.
• Special Journalistic Projects Fund (Fonds BJP)
This fund, worth €3.5m in 2019, is aimed at promoting high-quality, diverse and
independent journalism. The nancing is normally used to support newspapers or
magazines that are economically threatened or projects that cover issues related to
media and journalism. As local print media are the most economically vulnerable
in the Netherlands, the largest part of the fund (at least three quarters) is usually
channeled to local media projects25.
The Fonds BJP has two main programmes, an Investigative Journalism Scheme
and a Special Reporting Scheme, which together form the Journalism Project
Grants, the foundation’s main support pillar. The Fonds BJP also runs a Young
Talent Scheme aimed at funding the work experience of young journalists, and an
Expertise Scholarship, a programme that funds mostly freelance journalists who
want to invest in improving their knowledge and research skills.
24 See more about the SVDJ on its website at https://www.svdj.nl (accessed on 2 August 2021).
25 See more about the Dutch system of nancial support for the media at https://business.gov.nl/subsidy/
dutch-journalism-subsidies/ (accessed on 3 June 2021).

18
Fonds BJP was established in 1990 as an independent foundation. It operates
with funding from the Ministry of Education, Culture and Science. Lira foundation,
a copyright organisation working on behalf of writers, freelance journalists and
translators, also contributes a sum to the Fonds BJP’s budget. The main governance
body at Fonds BJP is its Supervisory Board, which consists of six members. To
ensure the Fonds BJP’s independence, the members of the board are appointed
by the ministry based on a set of strict professional criteria that require specic
experience. The board members are not paid and they can’t access in any way
funding from the Fonds BJP. In making decisions about award of funding in two
of the Fonds BJP’s main programmes, the fund’s sta consult with a committee
of advisors, which consists of 14 media experts without political connections or
aliations.
STATE FUNDING SUPPORT: STRENGTHS AND
WEAKNESSES
Direct subsidies: building nancial resilience, yet prone to abuse
Direct subsidies can be a key instrument of support for print media especially if they
are allocated through a well-functioning system that is designed to cover a longer
period of time. In countries with such a system, print media that beneted from the
state subsidies are known to have built resilience over time and protection against
editorial interference.
In Austria, for example, the state subsidy mechanism helped consolidate the
country’s press sector, bolstering the nancial sustainability of many print media
companies. That is extremely important for Austrian publishers, which have to
compete for readers with powerful German news outlets26. The government subsidy
scheme for print media was rst introduced in Austria in 1975. Its goal at the time
was to compensate publishers for the then newly introduced VAT. A selective
subsidy scheme for print media was launched in Austria ten years later.
Yet, the direct subsidy schemes are also faced with criticism.
First, state subsidies allocated directly by the government to media outlets risk
distorting the level of competition in the media market especially when the state
awards sizable subsidies to print media publishers. State subsidies for print media
are usually criticized as they tend to favour the larger players on the print media
market. Highly popular tabloid newspapers in Austria, for example, including
Kronen Zeitung and Kurier as well as some of the leading players on the regional
print media markets such as Der Standard or Die Presse regularly receive substantial
state subsidies.
These shortcomings of the subsidy system have prompted the Austrian
government in recent years to look for options to overhaul the scheme. Hence,
26 Paul Clemens Murschetz, Matthias Karmasin, “Austria: Press Subsidies in Search of a New Design” in
Murschetz P. (eds) State Aid for Newspapers. Media Business and Innovation, 2013, Springer, Berlin, Heidelberg.

19
in the coming years, the criteria for accessing state subsidies and their size are
expected to be altered.
Second, experience shows that the state subsidy support model for print media can
be easily abused by authorities to control editorial coverage of the media. Especially
in countries without a long tradition of free press and without clear rules to ensure
a fair and transparent allocation of government money, the state subsidy scheme
turns into an instrument of control that can be used to reward media outlets aligned
with the government interests or controlled by state bodies, state-run companies
or businesses supportive of the government.
The situation gets even worse when state subsidies are awarded to print media in
unocial ways. In countries such as Bulgaria or Greece, the government has in the
past routinely channeled public funding to print media outlets in informal ways in
their attempt to gain favourable coverage27.
In Russia as well, the state nancial support for print media represents a signicant
part of the total revenue of these outlets. Without this source of funding, no daily
newspaper, especially those with regional coverage, would be able to cover its
expenses. However, as the state subsidies go to print media that are controlled by
the state, have an aliation with a state body or are simply supportive of federal
and regional authorities, the Russian system of state subsidies for print media hurts
rather than helps media pluralism in the country28.
Direct subsidies for print media: pros and cons
Strengths Weaknesses Opportunities Threats
Access to large
amounts of
funding that can
have a positive
impact on the
long-term nancial
performance of
the media
Less bureaucratic
model as funding
is approved once a
year as part of the
larger government
budget
Tendency to
distort the
market and to
favour large
players
Potential to
help strengthen
the viability of
the print media
sector
It can be misused
by authorities to
achieve editorial
control of media
outlets
27 Paul Clemens Murschetz, Josef Trappel, “State Aid for Newspapers: A Summary Assessment” in Murschetz P.
(eds) State Aid for Newspapers. Media Business and Innovation, 2013, Springer, Berlin, Heidelberg.
28 Paul Clemens Murschetz, Josef Trappel, “State Aid”, cit.

20
Tax privileges: lower scal burden
Fiscal measures such as lowering taxes or full elimination of taxation for print media
products (newspapers and magazines, printing or distribution costs) generally
have a positive impact on the nancial viability of the print media.
First, by lowering taxes, publishers are relieved of a signicant part of the scal
burden and their product is becoming more accessible to readers, helping print
media to improve their sales.
Second, as with other companies that benet from tax privileges, this form of
indirect nancial support has long-term eects for print media companies, too,
feeding into their nancial sustainability.
Third, unlike other forms of state support, because they necessitate legal changes
(usually changes in the national scal code), tax privileges provide a certain
degree of predictability. Usually, such changes take some time to be approved and
implemented, from the moment authorities announce plans to change tax rules
to the actual adoption (by lawmakers) of the required changes. This transitional
period allows media outlets to plan and adjust to upcoming changes in the tax
regime.
Fiscal privileges for the media also have their own weaknesses. The key one is
that they don’t provide actual funding that can be used to cover costs or invest
in improving the quality of the content or the sustainability of the outlet, which is
usually the main need of media outlets.
Tax privileges for print media: pros and cons
Strengths Weaknesses Opportunities Threats
Positive impact
on the nancial
situation of media
outlets on a long-
term
Predictability, as
such schemes are
rolled out over
long periods of
time
Insucient
impact on
the nancial
sustainability
Considerable
reduction of
the expenses
of small and
mid-size print
media
It can be used
to discriminate
between various
media outlets
(depending on the
conditions that
accompany such
systems)
State advertising: high potential of government control
State advertising has become a major source of funding for the media, both
broadcasting groups and print media publishers, across Europe.
State advertising can be a boon for news media outlets especially today, a time when
they struggle to achieve nancial sustainability. In theory, thanks to its audience-
centric logic, advertising is expected to insulate media outlets from various forms

21
of pressure. However, to achieve that goal, allocation of state advertising must be
guided by a set of transparent and equitable criteria.
Unfortunately, there is no best practice of fair distribution of state advertising
identied to date. Very few governments publish data about the amounts of state
advertising funding awarded to media outlets. Rarely they reveal the criteria or rules
used in deciding where to place the ads (if they have such criteria at all).
In an older study, Martijn de Waal argued that, “of all the means that states have to
support media, state advertising is arguably the least transparent and thus the most
problematic.29” The situation has remained the same to this day.
Research conducted since 2017 as part of Media Inuence Matrix, a research and
advocacy project run by the Center for Media, Data and Society (CMDS), found
that, in the absence of clear criteria and independent oversight, state advertising
becomes a tool that governments use to reward media outlets close to or uncritical
of state authorities. That has a very negative impact on editorial independence.
Especially after the economic crisis of 2007-2008, which has nancially crippled
swathes of media companies all over the world, state advertising has become
a lifeline for many independent media, especially small and mid-size outlets.
Particularly in countries that have dysfunctional markets where the advertising
industry is characterised by clientelism and political pressures, the government
advertising machine becomes an instrument of outright editorial control.
In Hungary, the government spent a total of HUF 271bn (€742m) on state
advertising between 2015 and 2018, according to data from Mertek, a Hungarian
NGO, and Atlatszo, a Budapest-based investigative outlet30. More than two-thirds of
that amount was spent in 2017-2018, a period of intense electoral activity that led
to the victory of Fidesz, the political party of the Prime Minister Viktor Orban, in the
2018 elections. The bulk of this funding was distributed to media outlets supportive
of the government, which are owned by businesses close to the authorities31. In
Hungary, in 2018, 75% of the total state advertising budget, a total of €300m, was
channeled to pro-government media outlets, both private and public32.
Combined with a high level of media ownership concentration, the state advertising
system in Hungary has damaged the editorial independence of the media. In 2018, a
non-prot foundation, KESMA, was established as an umbrella organisation of more
than 470 Hungarian media outlets, most of which are owned by businesses close
to Fidesz. The owners of all these media donated their outlets to the newly created
entity33.
29 Martijn De Waal, “Business and ownership of the media in digital times” in Dragomir M and Thompson M
(eds), Digital Journalism: Making News, Breaking News, New York: Open Society Foundations (OSF), pp. 191–
210.
30 Mertek, “State advertising 2016-2017,” 25 February 2018, available online at https://mertek.atlatszo.hu/
state-advertising-2006-2017 (accessed on 21 June 2021).
31 Mertek, “State advertising 2016-2017,” cit.
32 Quentin Aries, “Europe’s Failure To Protect Liberty in Hungary”, The Atlantic, 29 December 2019, available
online at https://www.theatlantic.com/international/archive/2019/12/eu-hungary-press-freedom/603985/
(accessed on 31 May 2021).
33 Marton Bede, “One Hungarian media monster to rule them all”, IPI, 12 December 2018, available online at
https://ipi.media/one-hungarian-media-monster-to-rule-them-all/ (accessed on 14 June 2021).

22
Poland has experienced a similar pattern of state advertising. Here, state-owned
companies spend their marketing budgets mostly in media outlets favoured by
the government of the Law and Justice (PiS) Party that has been in power since
2015.
For example, the news weekly Gazeta Polska, known for its editorial agenda that
is supportive of PiS, saw its ad inows from state companies jump from some
€10,000 in 2015 to over €2m in 2018. Another media outlet close to the government,
the weekly Sieci saw a 30-fold increase in state ad revenues to more than €7m
during the same period, according to data from Kantar, a media buying agency34.
State funding accounts for roughly 45% and 40% of the total revenues generated
by Gazeta Polska and Sieci, respectively. In contrast, state ad spending in Gazeta
Wyborcza, a liberal daily, critical of the government, tumbled by 97% between 2015
and 201835.
In Western Balkans, the use of state advertising to control media is also a common
practice. Local media reported in 2020 about the transfer of funds between
Telekom Srbija, Serbia’s state-run agship telecom operator, and Wireless media,
the publisher of Kurir, a tabloid newspaper known for its support to the ruling
Serbian Progressive Party (SNS).
The Covid-19 pandemic has prompted some governments to increase public
funding for media in an attempt to help media companies cope with the crisis.
Some of this funding was used to pay for campaigns aimed to promote safety
measures against the virus. As it is the case in some countries that have a direct
subsidies model, the main beneciaries of these Covid-19 funds seem to be the large
media outlets. In Romania, for example, the government spent €40m on health-
related campaigns in the media, most of which went to the largest privately owned
television channels that already dominate the media market. In contrast, the local
press, especially smaller independent media outlets, got almost no funds from this
scheme36.
In Austria, too, the distribution of state advertising spending disproportionately
favours the most popular, usually tabloid, media. According to data from Medienhaus
Wien, two-thirds of the ministerial advertising spending in 2018 and 2019 was
swallowed by the country’s three largest tabloids (Österreich, Krone, Heute). The
amount disbursed to “quality media” and regional media was much lower37.
34 Vadim Makarenko, “Poland” in Digital News Report, Reuters Institute for the Study of Journalism (RISJ), 2019,
https://www.digitalnewsreport.org/survey/2019/poland-2019/ (accessed on 21 June 2021).
35 Anna Koper, “Polish state rms pouring ad cash into media that attack gay rights, research data shows,”
Reuters, 5 August 2019, https://www.reuters.com/article/us-poland-media-idUSKCN1UV1OL (accessed on 15
June 2021).
36 Dan Tapalaga, “Guvernul Orban a dat bani la presă cât n-a putut duce”, G4Media, 18 June 2021, available
online (in Romanian) at https://www.g4media.ro/exclusiv-guvernul-orban-a-dat-bani-la-presa-cat-n-a-
putut-duce-din-200-de-milioane-de-lei-puse-la-bataie-in-plina-campanie-s-au-cheltuit-140-de-milioane-
unele-redactii-acuza-ca-nu-si-au-primit-inca.html (accessed on 28 June 2021).
37 Jonas Vogt, “Austria: Greater transparency for public advertising to media needed,” IPI, 10 December 2020,
available online at https://ipi.media/austria-greater-transparency-for-public-advertising-to-media-needed/
(accessed on 11 June 2021).

23
State advertising for print media: pros and cons
Strengths Weaknesses Opportunities Threats
Because it
usually comes
in large amount,
it can provide
substantial
funding to media
outlets in need
Without
oversight, it
can be easily
turned into an
instrument of
control
With rules
ensuring
transparency
and equitable
allocation, it can
help many media
outlets achieve
sustainability
It can become a
powerful tool of
media capture
Project-based funding: less government control, more innovation
State nancing in the form of grants linked to specic projects is arguably the form
of state nancial support that aects the least, if at all, the editorial autonomy of
media outlets. Moreover, such grants have proven to achieve a signicant impact,
helping print media outlets to implement projects that lead to improvement of
their content and distribution.
Such funding schemes are built around a set of detailed criteria that allow only
certain media outlets, those most in need or with a project idea, to benet from
the funds. For example, the project-based state funding scheme for print media
outlets in the Netherlands, is said to have increasingly acted “as a cornerstone and
a driving force of news media innovation policy.38”
Various countries have created such funding schemes as an alternative to direct
subsidy schemes as they found them more eective.
In Belgium, the Flemish government ended in 1997 a nancing scheme for
newspapers that consisted of direct subsidies, replacing it with a funding
mechanism based on specic projects. The government of the Flanders region,
a Dutch-speaking area in the country’s north, has since allocated funding as
part of this mechanism for state advertising campaigns, but also for journalism-
related projects such as investigative journalism activities, training of journalists
and support for the development of a system of self-regulation in the print media
sector. As in the Netherlands, the strategy for print media support of the Flemish
government is to focus on projects that have a distinct element of innovation
to encourage print media publishers to nd themselves ways to improve their
journalistic content and business model.
On the other hand, this form of nancial support also has some weaknesses.
Because it is project-linked, it doesn’t allow media outlets to do long-term planning.
As project funding is usually awarded through an application process, publishers
can’t rely on this support to implement long-term plans or strategies. Moreover, as
it is open to all the players in the market, this form of support tends to be limited,
covering usually very small, time-bound projects.
38 Paul Clemens Murschetz, Josef Trappel, “State Aid”, cit.

24
Project-based funding for print media: pros and cons
Strengths Weaknesses Opportunities Threats
It leaves very
little space for
government
control
It doesn’t provide
long-term
predictability
It allows print
media companies
to experiment with
various editorial or
business models
Without
simple rules
and criteria, it
can prevent
smaller print
media, which
have limited
resources,
from applying
CONCLUDING OBSERVATIONS/RECOMMENDATIONS
To understand the impact of state subsidies in the print media sector and design
state nancing schemes that are suitable in a certain economic and political context,
it is important to know from the onset the rationales that drive the state support or,
to put it more simply, to identify the problem the government is trying to solve
when funding media39.
One group of rationales is related to the concern for economic development as
markets don’t deliver what is expected from them and publishers don’t perform
well, risking bankruptcy. This category of rationales includes saving jobs, assisting
weaker media companies that are not able to cope with economic crises,
lowering the financial burden of media companies to help them become more
economically viable, xing cases of market failures, encouraging innovation or
boosting demand for media content.
A second group of rationales is centered on the need to uphold values in order
to ensure, for example, that minorities are well served by media or that a certain
local market has a diversity of news content. These rationales have to do with
maintaining diversity and quality of the media, holding power to account,
improving the education of journalists and giving space to alternative voices.
This being said, any form of state nancial support for the print media has to be
designed only following a thorough audit of the sector to identify the most acute
problems that press publishers are facing. Moreover, as the crisis triggered by the
Covid-19 pandemic is likely to aect the economic viability of many news media
companies in the years to come, the need for public funding in the media is likely
to increase and, with it, the inuence of the state in the media. Hence, to avoid
editorial interference by authorities, state nancial support schemes should follow
a few key principles.
39 Josef Trappel, “Subsidies: Fuel for the Media” in Comparative Media Policy, Regulation and Governance in
Europe (eds. Leen d’Haenens, Helena Sousa and Josef Trappel), intellect Bristol, UK/Chicacgo, USA, 2018.

25
One of them is transparency. Information about public funding earmarked for
support of print media has to be publicly available to ensure that no media outlets
are disadvantaged and to prevent corruption in the process. Second, funding
schemes have to be designed based on clear criteria to avoid arbitrary funding
decisions, which ultimately compromise these fund, transforming them into a tool
of control. Furthermore, state nancing should respond to both economic and
socio-cultural as well as democratic needs, especially protection and promotion
of public interest journalism and media diversity. Finally, state nancing schemes
for the media should be designed as a supplementing and corrective measure
rather than as a dominant funding model. When the government tries to create
a dominant public funding model, they distort the media market and erode the
potential for sustainability in the sector.
In Ukraine, in the current state of economic development and media market
conditions, also taking into account the need for more public interest, quality
journalism, making available state nancial support for the local press sector is of
the utmost importance. The local print media in Ukraine has undergone a sustained
reformed process in the past ve years or so. In 2014, Ukraine had upwards of 600
communal newspapers that were in most cases used by local administrations to
disseminate information about their activities. Hardly providing quality content of
local interest to their readers, most of these publications used to be nanced by
municipalities.
Attempts to reform the local press in Ukraine harken back to the late 1990s, but
only in the following decade, legal acts governing the reform process were drafted.
Eventually, a law on reforming state and communal print media was adopted
by the Ukrainian parliament in December 2015. The law created the basis for
the privatisation of the local press, a process that was launched in January 2016.
Following a series of delays often triggered by conicts between the founders of
the media outlets and their sta as well as by lack of clarity regarding the status
of these media and the premises in which they were to operate, the privatisation
of some 91% of the local print media outlets, a total of 615 publications, was
completed by January 2019 when the reform process was completed as planned
in the law.
Upon privatisation, the reformed print media outlets have been stripped of their
funding from local budgets, which left them in a very dicult situation. Moreover,
local municipalities failed to implement a legal provision from the law on reforming
state and communal print media that was supposed to give the reformed media
priority access to coverage of activities run by local governments. That further
undermined the reformed media outlets, reducing their access to information. In
addition, not all local authorities in Ukraine transferred the property of the former
municipality-owned media to the newly formed media outlets or concluded lease
agreements for a period of 15 years with them as required by law.
The nancial predicament and unstable situation of the local media in Ukraine had
repercussions on their audience gures. Over the last three years, the circulation
of local media has gone down by an average of 30% (in some cases by 50%),
according to locally sourced data. Much of that was due to the awed print media
distribution system run by the Ukrainian Post Oce (Ukrposhta).

26
All that has badly aected the nancial health of many local print media companies
in Ukraine, bringing them to the brink of collapse. With large expenses for paper,
printing and distribution, many of them are expected to decrease their frequency
or even fold.
Ukrainian journalists have repeatedly called on the government to create a
programme for the support of local media in the country, but no measures have
been adopted to date. The State Committee for Television and Radio Broadcasting
has developed a proposal for the support of local media that was supposed to be
implemented in the period 2020-2023. The proposal mentions nancial assistance
by local government and state authorities, legal tools (such as laws preventing
increases in the taris for delivery of print publications), tax benets for local
media in the border areas and state nancial support to cover printing costs. The
proposal envisages the funding model of local media to also consist of commercial
revenue raised through sales of advertising and subscriptions. To date though this
proposal has not been discussed in parliament and there is no indication that will
change any time soon.
Taking into account the developments in the Ukrainian media and other local
factors, as well as the history of the local print media in the country, the most
suitable model of public support for the sector could be either a project-based
funding scheme or a direct subsidy fund that would oer blanket support to all
local media, or a combination of the two.
A project-based scheme alone would be preferable as it would also require the
participation of media outlets, encouraging them to design their own operational
and business models that secure both their nancial sustainability and editorial
independence. In the Ukrainian context, such a funding scheme should be given
sucient nancing to cover the needs of all local print media that oer quality
content. The fund should be designed to cover a longer period of time to ensure
predictability and allow media outlets to plan on a longer term.
Alternatively, a state subsidy system in the form of a media support fund would
help local print media in Ukraine build resilience and produce quality content for
local audiences. For such a system to work, it should be designed to oer both
basic nancial support to all local print media as well as larger nancial grants to
media outlets that oer or strive to oer high quality content or that prove to have
a solid vision about how to improve their operations.
A third option would be a combination of the direct subsidy model (where
basic funding is oered to all local media in need of funding to survive without
compromising their editorial independence) and the project-based model (where
only media outlets that show initiative and potential for innovation would
receive additional funds through an open and transparent application process).
If the funding helps media outlets to improve their financial sustainability, in
time, the subsidy model can be gradually phased out.
Additionally, the sector would denitely benet from a series of scal measures,
especially tax exemptions, that have been proved to help lower the nancial
burden media companies are facing.

27
It is important to note that, to ensure fair distribution of funding and prevent
use of nancial resources by authorities to control the editorial agenda of the
print media outlets, the schemes described above must be run by bodies whose
independence will be ensured by governing structures in charge of supervising
these programmes that will consist of independent experts and neutral civil society
representatives. Lower to zero representation of politically aliated people and
government representatives in these bodies is highly desirable for such schemes
to properly function.
Finally, before embracing any funding model, due diligence of the highest order
is needed. It is rather imperative to base decisions on the right funding model for
local print media on detailed, data-rich analysis about the audiences targeted by
the media outlets, the market potential in the areas where they operate, mapping
of other fundraising opportunities and the cost of producing high-quality content
for local audiences.

www.coe.int www.europa.eu
The Council of Europe is the continent’s leading human rights
organisation. It comprises 47 member states, including all
members of the European Union. All Council of Europe
member states have signed up to the European Convention
on Human Rights, a treaty designed to protect human rights,
democracy and the rule of law. The European Court of Human
Rights oversees the implementation of the Convention in the
member states.
Marius Dragomir is the Director of the Center for Media, Data and Society, a research center affiliated with the Central European
University in Vienna. He previously worked for the Open Society Foundations (OSF) for over a decade. Since 2007, he managed the
research and policy portfolio of the Program on Independent Journalism (PIJ), formerly the Network Media Program (NMP), in
London. He has also been one of the main editors for PIJ's flagship research and advocacy project, Mapping Digital Media, which
covered 56 countries worldwide, and he was the main writer and editor of OSF’s Television Across Europe, a comparative study of
broadcast policies in 20 European countries. He is now running the Media Influence Matrix, a global research project looking into
power relations and undue influence in news media.
Dragomir has spent the past two decades in the media research field, specialising in media and communication regulation, digital
media, governing structures of public service media and broadcasting, spectrum management, media funding models and
ownership regulation. He has authored expert studies and articles on journalism and media policies that have been published and
translated in more than 70 countries.
Dragomir started his career as a journalist some 30 years ago in his native Romania where he worked for several local dailies, radio,
and TV stations. Since 1999, he has been working for English-language media. In 2015, he founded MediaPowerMonitor, a
community of experts in media policy covering trends in regulation, business, and politics that influence journalism.
The member states of the European Union have decided
to link together their knowhow, resources and destinies.
Together, they have built a zone of stability, democracy
and sustainable development whilst maintaining
cultural diversity, tolerance and individual freedoms.
The European Union is committed to sharing its
achievements and its values with countries and peoples
beyond its borders.
ENG
About the author