SCHOLARLY JOURNALS:
Librarians Seek to Block Merger of Scientific Publishing Giants
David Malakoff
Research librarians have asked the U.S. government to block one of the biggest ever science publishing mergers as part of a battle against spiraling subscription prices and the growing concentration of ownership of academic journals. Their target is the European journal giant Reed Elsevier, which last week announced that it will swallow American rival Harcourt General for $4.5 billion, creating a global company with more than 1500 journals, including a substantial fraction of all biomedical titles.
Company executives say the deal will improve efficiency and benefit consumers by bringing related titles under one roof. But librarians say that their experience with past mergers suggests that this one will drive up journal prices and reduce the flow of scholarly information. The planned union of Reed Elsevier and Harcourt "will have severe repercussions for libraries, researchers, and the public," predicts Duane Webster, executive director of the Association of Research Libraries in Washington, D.C., which represents 121 of the largest research collections in North America. "This transaction should be prevented," he wrote to U.S. Department of Justice regulators on 27 October, the day the deal was announced.
The current confrontation began in June, when Harcourt General--a $2 billion publishing empire based in Chestnut Hill, Massachusetts, that owns nearly 450 scientific and technical journals--announced that it was for sale. Its $700 million science, medical, and technical division includes several prominent presses, such as Academic Press and W. B. Saunders, that publish scores of highly cited titles, from The Journal of Molecular Biology to Icarus, a planetary science journal.0
Attracted by the prospect of adding such thoroughbred titles to its existing $1 billion stable of 1100 journals, Reed Elsevier officials entered the bidding after forming an alliance with another rival, Toronto, Canada-based Thomson Corp. Under the pact, the two companies will carve up Harcourt, with Reed Elsevier getting Harcourt's journal and K-12 textbook divisions, and Thomson buying Harcourt's higher education and professional services businesses for $2 billion. "The strategic fit is excellent," Reed Elsevier CEO Crispin Davis said in a statement from London. "The combined businesses will have strong positioning across the entire scientific, technical, and medical spectrum."
It's not known how U.S. or European antitrust regulators will view the deal. But although Reed Elsevier officials said they expect no serious opposition, Webster is pressing for a complete review. In the past 2 years, he notes, the number of major biomedical publishers has shrunk from 13 to eight. Another megamerger would "enhance the market power of the merging companies and significantly increase" prices, he predicts. Over the last decade, he suggests, consolidation has allowed commercial publishers to increase subscription prices far faster than the rate of inflation, prompting research libraries to trim subscriptions by 6% while spending 170% more on titles. The association wrote a similar letter to Justice officials in September after Harcourt put itself on the auction block.
Webster's warning is backed up by research by Mark McCabe, an economist at the Georgia Institute of Technology in Atlanta, who analyzed publishing mergers while working for the government. In a recent paper analyzing the impact of two mergers on biomedical journal prices, McCabe found that subscription prices for Elsevier's new titles jumped by an average of 27% within a few years after its purchase of Pergamon Press in 1991. Similarly, Lippincott titles purchased by Kluwer the same year jumped by 30% over the same period. "Harcourt's titles could experience similar double-digit increases" under Reed Elsevier, McCabe predicts, particularly because Harcourt's journals are, on average, lower priced than Elsevier's.
Commercial publishers dispute McCabe's analysis, however. They say the increases stem from adding pages and color and improving editing and design, as well as rising printing costs and currency fluctuations. Some argue that further concentration in the industry may actually make burgeoning online databases--such as Reed Elsevier's Science Direct--more useful by giving computer users access to hundreds of titles at a time. "More journals under one umbrella can be easier and better for users," says one executive.
But McCabe believes regulators "should not let this deal pass without a careful second look." It appears to fail at least one traditional test of antitrust law, he says, by creating a company that controls more than one-third of a given market--in this case, the market for high-quality biomedical journals. By his count, the new company would own 424, or 34%, of 1240 mainstream biomedical journals tracked by the Institute for Scientific Information (ISI) in Philadelphia, Pennsylvania. Analysis by Science of other ISI data showed that the merger would also give Reed Elsevier 134 of the 500 most cited journals.
If regulators do find an antitrust problem, Reed Elsevier may be forced to sell some journals, analysts say. But few of those contacted by Science believe that requirement would kill the deal--although European regulators did sink Reed Elsevier's last proposed megamerger, with Dutch giant Wolters Kluwer, in 1998. Any hint of trouble for this merger may not surface for months, however, as analysts predict the regulatory review could continue well into 2001.
Volume 290,
Number 5493,
Issue of 3 Nov 2000,
pp. 910-911.
Copyright © 2000 by The American Association for the Advancement of Science.
|
