February 21, 2012
Head of Reed Elsevier hits back at academic uprising
by Dennis Johnson
Even as the uprising against scholarly publisher Elsevier continues to spread — see this report from the Sydney Morning Herald about Australian academics joining in, and this CBC report about the revolt in Canada — the Financial Times reports that Elsevier has “hit back” at its critics.
According to the report by Salamander Davoudi (subscription required) ”Over the past month more than 6,000 academics across the globe have joined a boycott against Elsevier publications in what has been dubbed “an international academic spring” by Dennis Johnson, the co-founder of US publishing house Melville House.” The “hit back,” says Davoudi, has come from the head of Elsevier’s conglomerate ownership:
Erik Engstrom, chief executive of Reed Elsevier, said the growing academic backlash against the group’s core scientific publishing division was based on “misstatements” and “misunderstandings”, as he unveiled full-year results slightly ahead of expectations.
Get it? The company — Reed Elsevier also owns the company that puts on the London Book Fair and Book Expo America — made a lot of money last year, and has released those stats along with their defense as if making money meant the complaints weren’t worth listening to. Engstrom seemed emphatic: “All [objections] … are based on misstatements or misunderstandings of the fact,” he said, according to the FT report.
But financial analysts seem like they’re not going along with the bluster. According to the FT, “Claudio Aspesi, analyst at Bernstein Research, questioned how ‘a public relations incident of this kind could happen’ and urged investors to ask Reed why the crisis management had been ‘so tentative’. Elsevier contributes almost half of group profits.”
In fact, the results seem to have gotten an even more lukewarm response than that might indicate:
LexisNexis had been targeted by analysts as the most likely business for Reed to sell, amid claims that the division had suffered from under-investment as well as weakness in the US legal publishing market.
Group revenues fell from £6.05bn to £6bn in the year to December 31, while pre-tax profit rose from £768m to £948m. The company cut net debt from £3.5bn to £3.4bn year on year.
Thomas Singlehurst, analyst at Citi, said despite being mildly ahead of expectations the results did not mark “a turning point”. “Moreover, we don’t see any overarching catalyst for a broader re-rating of the group,” he added.
Even Elsevier’s own editors seem to be rebelling. “I regret the fact that Elsevier charge over three times the prices prevailing in my subject area. It makes the journal less accessible and less influential than it would otherwise be,” Tim Leunig, the editor of an Elsevier journal called Explorations in Economic History, tells the FT.
So what’s next? Despite his dismissive attitude Engstrom gives lip service to doing the right thing — “We are taking the petition very seriously and we are engaging with our stakeholders to better understand and address their concerns,” he says — but you just get the feeling his heart isn’t in it and he’s not going to take this as anything but an insult.
Meanwhile, according to the FT, “The academic backlash adds to pressure Reed Elsevier is already under from some analysts calling for a break-up of the Anglo-Dutch publisher.” Engstrom has, according to the FT, stated emphatically that that’s not going to happen.
As the uprising seems to be still growing, that remains to be seen.
Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House. Follow him on Twitter at @mobylives