From: Sandy Thatcher <[log in to unmask]>
Date: Mon, 9 Mar 2015 20:05:45 -0500

As a footnote to Joe's #3, it has to be said that the accounting can
differ from one university to another as far as presses are concerned.
E.g., at Penn State the Press was not charged the cost of staff
benefits, so those costs were not factored into our direct overhead.
And our warehouse space was free, so no charge for storing back
issues. Saying that our journals at Penn State created a surplus,
then, has to be qualified by recognizing that such subsidies were part
of the financial accounting. Variances like these among presses adds
complexity to any effort to determine whether journal publishing is
"profitable" for university presses as a whole.

Sandy Thatcher


> From: Joseph Esposito <[log in to unmask]>
> Date: Sun, 8 Mar 2015 17:09:52 -0400
>
> Rick,
>
> Quite a few questions packed inside your post.  To parse this a bit:
>
> 1.  Many journals lose money.  This is true for society journals and
> journals published for other not-for-profit entities.  As Sandy says,
> even journals that eventually become profitable may lose money for
> several years.  But many journals never make money and some that once
> did make money come to lose money at some point.
>
> 2.  We do not know if the journals business *taken as a whole* is
> profitable.  I believe that it is, but I can't prove it, and I don't
> think anyone can.  Everybody talks about Elsevier's 39% pretax
> profits, but those margins are a function of scale.  It's hard not to
> make money if you have a thousand journals, very hard to make money if
> you only have one.  It is a scandal of misinformation when people talk
> about the profitability of the entire industry and quote Elsevier's
> figures as evidence.
>
> 3.  Some professional societies and other not-for-profit entities
> (this applies to some university presses, too) may not even know if
> their journals are profitable or not. This is because the accounting
> in some organizations is not up to speed.  I encounter this
> professionally all the time.  It's not unusual to poke around an
> income statement and find costs that are not being recognized or are
> misallocated.  This is a far more common and serious problem than many
> people suppose.
>
> 4.  Because of #3, any study of the profitability of professional
> society journals has to be looked at skeptically.  If the societies
> themselves are providing the data, I would not trust it.  I hasten to
> add that there are not-for-profits that are managed with the financial
> rigor of a publicly-traded organization.  But not all of them operate
> this way.
>
> Joe Esposito
>
>
> On Sun, Mar 8, 2015 at 3:09 PM, LIBLICENSE <[log in to unmask]> wrote:
>>
>>
>>  From: Rick Anderson <[log in to unmask]>
>>  Date: Fri, 6 Mar 2015 15:50:28 +0000
>>
>>  Dear Collective Wisdom,
>>
>>  I recently heard a presentation by a learned-society officer who
>>  mentioned, in passing, that many society and non-profit scholarly
>>  publishers are operating some or all of their journals at a loss. This
>>  took me a bit by surprise; I've never doubted that there are scholarly
>>  journals out there not earning their keep financially (and being kept
>>  afloat for purposes of mission rather than revenue), but I got the
>>  impression that there may be more of these out there than I thought.
>>
>>  Has anyone studied this? Is there data out there on the
>>  number/percentage of scholarly journals that are subsidized by their
>>  host organizations rather than generating a surplus for them?
>>
>>  Thanks in advance for any leads on this.
>>
>>  ---
>>  Rick Anderson
>>  Assoc. Dean for Scholarly Resources & Collections
>>  Marriott Library, University of Utah
>>  [log in to unmask]