1. Nordic approaches to media subsidy regulation

This overview report examines how the arm’s length principle is articulated, institutionalised, and operationalised within the current state-administered news media subsidy schemes across the Nordic region – that is, the extent to which a formal and organisational separation exists between political decision-making and executive authority.

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Adopting a descriptive approach, the report maps how the arm’s length principle is embedded in Nordic news media support systems, as reflected in prevailing legislation and regulatory frameworks. Comparative analyses remain relatively scarce in many areas of media studies, including media policy. By concentrating specifically on direct and selective news media subsidies in the Nordic countries and the application of the arm’s length principle, this report seeks to address a part of that gap.

This issue is timely in several ways. First, almost all existing news media subsidy schemes in the Nordic region have recently been revised, or are currently undergoing revision, while new forms of support have been introduced. These reforms are driven by changes in audience behaviour towards increasingly digital news consumption, as well as by the profound impact of global platform companies on the business models of domestic news media organisations – not least for the local and regional ones (Nordicom, 2026: 72, 83–94). Today, Nordic news media subsidies are no longer primarily directed at daily newspapers or print media.

Second, Nordic debates concerning how active policies should be balanced against the risk of overly narrow definitions of culture and media have intensified in recent years (Kulturanalys Norden, 2022). This debate takes place in markets with a more than 50-year-long tradition of direct subsidies to privately owned news media, which in international comparisons are characterised by an active state presence in the media market and strong press freedom (Grönlund et al., 2024).

Third, the European discussion on the state’s general responsibility for and influence on the media market, for example, through funding and governance, has also grown in the last few years (Born & Lewis, 2026: 4–12). The question of a more active media policy may raise concerns about undue political influence over the free media, the global trend toward increasingly unfree media, and so-called media capture – carried out either directly by governments or indirectly by politically connected vested interests (Trevisan, 2024).

The relevance of these more recent motives becomes clearer when viewed in conjunction with the extensive body of research demonstrating that subsidies and other forms of market intervention affect markets in one way or another (Laffont & Tirole, 1991; Stiglitz, 2009: 13–51). Given that such support inevitably influences market outcomes, it becomes relevant to examine the institutional arrangements designed to maintain distance between funding decisions and political authority. If operational control over the subsidy framework or its adjudicating authority is not insulated from political actors, resulting decisions may be regarded as, or in fact be, politically motivated favouritism rather than impartial governance. This risk is particularly problematic in a sector whose democratic function is to scrutinise political power.

A descriptive comparison approach is apt given the complexity, fluidity, and political significance of contemporary regulatory frameworks as institutional conditions shaping media policy. Systematic comparative descriptive research enables the identification of similarities and differences across the Nordic countries and clarifies how the arm’s length principle is translated from a normative ideal into concrete regulatory arrangements within news media subsidy systems.

1.1 Report overview

Section 1 presents the arm’s length principle in greater detail and offers a working definition, followed by a concise account of the historical development of the Nordic news media subsidy system.

Section 2 introduces and analyses the three dimensions along which the arm’s length principle is examined. The Nordic news media markets are then briefly characterised and positioned in broad terms using a few analytical frameworks; this discussion covers the media systems of Denmark, Finland, Iceland, Norway, and Sweden (the specific circumstances of the Faroe Islands, Greenland, and the Åland Islands are not examined).

Section 3 then examines each dimension on a country-by-country basis in separate sub-sections, followed by a short comparative summary. The level of descriptive detail varies between cases owing to structural differences in the complexity and institutional layering of the respective national frameworks.

Section 4 presents a more integrated comparative analysis for each dimension.

The report concludes in Section 5 with a short set of final reflections.

1.2 The ideal of arm’s length distance

What does the principle of arm’s length distance entail in general terms, and more precisely in the context of media policy? In brief, it is a public policy principle that operates across the fields of economics, law, and politics in many European societies, as well as in other parts of the democratic world. The principle is implicitly embedded in the constitutional separation of powers between the judicial, executive, and legislative branches of government. It is also reflected in the distribution of authority among governmental agencies and in the institutional relationship between the state and the media (Hillman Chartrand & McCaughey, 1989). In cultural policy contexts, the principle was developed not least by the economist John Maynard Keynes and through his ideas concerning semi-autonomous non-governmental bodies in post-war Britain (Upchurch, 2011).

This principal remains highly salient in the Nordic countries, where it is articulated, for example, in the Nordic Council of Ministers’ (2024) position paper Nordic co-operation programme for culture 2025–2030. There it is stated that the “principle of keeping an arm’s length distance between politics and culture provides guidance” and that “cultural freedom, a free and independent media and the arm’s length principle together lay the foundation for free speech” (Nordic Council of Ministers, 2024: 3, 5).

Following Hillman Chartrand and McCaughey (1989), this report understands the arm’s length principle as a normative institutional ideal or a governance doctrine centred on the delegation of decision-making authority to intermediary bodies that operate at a formal distance from political executive power. The principle entails a structured separation between political authorities, responsible for defining the overall policy framework, and arm’s length institutions, which are granted organisational and procedural autonomy in the allocation and administration of news media subsidies. At its core, the principle holds that political decision-making should not extend to individual funding decisions, nor to influencing editorial content or the media’s watchdog function.

1.3 Subsidies in the Nordic media welfare states

To examine how the normative ideal of the arm’s length principle is realised in practice, it is necessary to clarify what is meant by media subsidies and to outline their historical development. Direct and selective media subsidies emerged in the Nordics in the late 1960s and early 1970s, whereas indirect and general forms of media support were introduced considerably earlier, in some cases as early as the nineteenth century. These indirect and general measures have typically taken the form of reduced taxes or fees, including exemptions from value-added tax, lower advertising taxes, and subsidised postal distribution. Such forms of support have generally applied to the entire media or press industry, although notable exceptions can be identified.

By contrast, direct media subsidies have been allocated to individual media companies and organisations, for example, through favourable loan arrangements, operational grants, or financial incentives intended to stimulate cooperation in areas such as distribution. These subsidies have primarily been directed towards the newspaper sector (Gustafsson, 1996: 79; Waller, 1972: 2).

In essence, indirect support measures cover all, or almost all, actors in the market, and direct support, by contrast, is more selective: Only some market actors are deemed eligible, which makes direct schemes particularly pertinent to examine through the lens of the arm’s length principle.

1.3.1 Media subsidies to stop closures of newspapers

The introduction of selective direct subsidies in the Nordics was frequently motivated by a perceived need to dampen a wave of newspaper closures triggered by post-war deregulation, high inflation, and the restructuring of media markets in the 1950s and 1960s. The schemes were targeted at newspapers occupying weak market positions, with the explicit aim of enhancing their competitive capacity vis-à-vis economically stronger titles. More fundamentally, these measures were intended to safeguard media pluralism – particularly the diversity of press voices that had developed within the system of party-affiliated newspapers (Gustafsson, 2010: 75–82).

At their core, the various press subsidy schemes were directed at the political opinion-forming function of the daily press. The ambition of these measures was to secure pluralism within the daily newspaper sector on the premise that the press would be better equipped to fulfil its functions in a democratic society if alternatives were available. The strong tradition of party-affiliated newspapers meant that the form of pluralism primarily sought was the existence of many independent titles representing different party-political orientations. The subsidies thus emphasised the role of daily newspapers as instruments of representative democracy, rather than their functions as general news and advertising outlets or as providers of entertainment (Gustafsson, 1981: 91–100; Bjerke & Halvorsen, 2023: 40–42, 53).

However, other rationales have also been invoked, including industrial and cultural policy considerations. From the early 2010s onwards, media subsidies have increasingly been justified by an ambition to safeguard the quality and the presence of news and editorial content (Flensburg, 2015).

Another way to account for the introduction and continuation of the subsidies is through the characterisation of the Nordic countries as so-called media welfare states. In these media systems, subsidies are not merely understood as support for a particular sector, but rather as instruments for sustaining the democratic function of the news media by fostering conditions under which democratic discourse can flourish through trustworthy journalism (Syvertsen et al., 2014: 17–19, 47).

Initially, selective interventions aimed at preventing the closure of daily newspapers were implemented in Finland, Norway, and Sweden, but not in Denmark or Iceland. In Norway and Sweden, subsidies were distributed directly to the affected newspaper companies, whereas in Finland, allocation occurred partially through the political parties. The scale of these support measures expanded during the 1970s and, to some extent, during the 1980s (Gustafsson, 1996: 79; Bjerke & Halvorsen, 2023: 63, 74).

In Sweden, using the largest media market in the Nordics as an example, the subsidies operated for a long period under a rights-based ordinance. If an applicant newspaper met certain criteria relating to market position, the proportion of editorial content, and the share of readers in its place of publication, it was entitled to receive support (SOU 2013:66, 2013: 85). The allocation procedure itself was thus relatively straightforward and mechanical. By designing these early Nordic subsidy schemes in this mechanical or automatic manner, policymakers also sought to safeguard the principle of arm’s length distance between politics and the media (Bjerke & Halvorsen, 2023: 248).

Today, the Nordic subsidy schemes generally take a different form. There is now a predetermined funding envelope for which eligible actors may apply, and the group entitled to seek support is both larger and more heterogeneous than previously. The digital transformation – characterised by changing patterns of media consumption, media convergence, and the introduction of new engagement measurement instruments – has also meant that assessments are less a matter of automatic rule application and increasingly dependent on discretionary judgement (Bjerke & Halvorsen, 2023: 263). In other words, the preparatory documentation and the specific grounds invoked in individual decisions have assumed greater significance.

1.3.2 News media subsidies of today

The Nordic news media subsidies of today are not only regulated through national legislation and ordinances. In EU member states Denmark, Finland, and Sweden, the subsidy schemes require approval from the European Commission, while in non-EU Norway and Iceland, media subsidies are subject to approval by the EFTA Surveillance Authority (Nordicom, 2022). Thus, although media policy formally remains a national competence, the design and implementation of subsidy schemes are embedded in a broader supranational regulatory framework.

This supranational dimension has been further reinforced through the implementation of the European Media Freedom Act (EMFA). Under the EMFA, EU member states are required to respect the effective editorial freedom and independence of media service providers in the exercise of their professional activities. Moreover, member states – including their national regulatory authorities – must not interfere with or attempt to influence editorial policies or editorial decisions (EU 2024/1083). The EMFA regulation therefore clarifies and strengthens, in several respects, the requirement to maintain an appropriate institutional distance between political executive power, substantive decision-making, and the media sector.

Against this backdrop of both national and supranational regulation, the practical organisation of Nordic news media subsidies warrants closer attention. Funds for direct media subsidies are allocated through the state budget, while their distribution is generally administered by public authorities or ministries. Budgetary control thus remains the ultimate steering mechanism. Consequently, the arm’s length principle operates only within politically defined financial and regulatory parameters, highlighting the inherent tension between formal guarantees of independence and the structural conditions of public funding.

The question, then, is how the principle of arm’s length distance is manifested in the regulation of direct and selective news media subsidy schemes in the Nordic countries. This report’s indicators of autonomy and distance from political influence include the presence of a separate decision-making authority, legislation that safeguards independence, and conflict-of-interest-regulated decision-making and application procedures free from political interference.