Study claims publishers of academic journals make excessive profits

Posted by hct16 at Nov 01, 2012 12:39 PM |
New research from the School of Management alleges that some publishers relocate overseas to minimise their tax liabilities
Study claims publishers of academic journals make excessive profits

Professor Simon Lilley

Our School of Management has published new research which claims some of the biggest academic publishers use tax avoidance strategies to boost profits while they engage in football transfer style practices to stifle competition.

In a paper on the findings, the authors claim that publication of academic papers - based largely on state funded research - can be so lucrative that publishing houses are able to enjoy net profit margins  as high as 53 per cent. That compares with 6.9 per cent for electricity utilities, 5.2 per cent for food suppliers, and 2.5 per cent for newspapers.

The returns are further enhanced when publishers operating in the UK move their offices to tax havens overseas – a practice that raises ethical questions in times of austerity, the paper argues.  Its authors are calling for the publishers of academic journals to be included in the review of tax havens ordered by Danny Alexander, the Chief Secretary to the Treasury.  He has instructed civil servants to find a way to stop offshore companies receiving public subsidies or contracts.

The Leicester School of Management paper, What are we to do with feral publishers?, argues that if publishers refuse to lower their subscription prices, academics should boycott their journals and start up alternative and more affordable ones to increase access to scholarly work. The practice has been encouraged in the United States by Harvard University that recently told its faculty members to make their research freely available through open access journals and to resign from publications that keep articles behind pay walls.  Harvard was responding to price hikes imposed by many academic publishers.

The Leicester paper, to be published in the journal Organization, urges publishers to make significant reductions in their annual subscription prices, or face the prospect of academics establishing more competitively priced journals.

Professor Simon Lilley, head of Leicester School of Management, wrote the paper with co-authors Dr David Harvie, a senior lecturer in finance and political economy, Dr Geoff Lightfoot a senior lecturer in entrepreneurship and accounting, and Kenneth Weir, an accountancy lecturer.

• Press release

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