on 18 May 2000 Steve Black <blacks@MAIL.STROSE.EDU> wrote:

> Albert Henderson consistently argues that universities are making profits
> while starving libraries, while many of us following this listserv think
> "that's not the reality for my institution".  We, in turn, see our
> subscription bills and an article reporting that Elsevier made a 40%
> profit in a recent year, and think many publishers make excessive profits.
> Mr. Henderson argues that is not publishers' reality.

I try to use reliable sources and to cite them. I
know that some managers try to pump up investment
markets with fantastic stories. The Securities &
Exchange Commission here, the Board of Trade in UK,
etc. don't control such hot air. They do control
the information given directly to investors.

When talking about profits, you must go to the bottom
line. The Reed-Elsevier financial statements filed with
the SEC and/or distributed to shareholders would be my
preferred source. Its annual report for 1998 shows net
income of 772 from 3271 net sales.  That's about 24
percent after taxes. 1997 (restated) showed a loss. 1996
showed net income of 366 from 3470 net sales, or 10.5
percent profit. (page F-4)

> If it is true that publishers are barely making it, and that every dollar
> they charge us is justified, why don't they open their books to librarians
> and let us know where the money is going?  If I saw a financial report
> with enough detail to show just where the money comes from and where it
> goes for a publisher's full title list of journals, and it was clear that
> the expenses were reasonable and justified, I would be far more willing to
> accept 10+% annual price increases.  It would also give me a stronger hand
> in our pitches to administration for more funding.  I would want to see
> detail beyond "staff" and "overhead", enough to truly understand where the
> money goes.  And I mean real numbers, not summaries or approximations.

If you actually want to know about the business of
publishing in the sort of detail you outlined
above, you will have to participate in the year-to-
year dynamics of sales forecasting, editorial acceptance,
production, fulfillment, customer service, running the
office, and -- most of all -- setting prices.

In the meantime, you should have no trouble finding
annual reports of publicly held and nonprofit publishers.

If you want to make a case for more library funding, you
might refer to discipline-oriented database statistics to
demonstrate the increased numbers of papers published
worldwide.

> Has anything like this been published recently?  Does anyone on SERIALST
> have information they can share?  Mr. Henderson, are you willing to lay it
> out for us here for Publishing Research Quarterly?

I have been laying it out here, on the STS-L list, in
AGAINST THE GRAIN, J A S I S, LIBRARY JOURNAL, AMERICAN
LIBRARIES, SCIENCE, SOCIETY, LINGUA FRANCA, &c. as well
as PRQ for some years now. My articles in J A S I S and
PRQ are heavily noted.

Albert Henderson
Editor, PUBLISHING RESEARCH QUARTERLY
<70244.1532@compuserve.com>