Academic Libraries and Their Home Institutions

1. Responses to Budget Cuts

Academic institutions are responding with a wide array of strategies, ranging from signing transformative agreements that are largely favorable to entrenched publishers to unbundling their big deals with the goal of drastically reducing spending with legacy publishers and reinvesting the funds in other initiatives. SPARC conducted a survey (INSERT LINK) of its membership on this in early 2021. About half of the member libraries responded, with most indicating that they were facing budget cuts driven by COVID-19. Slightly more than half (56%) of respondents have to cope with cuts below 10%, a little less than a quarter (21%) with cuts above 10%, and the remaining 23% either had no visibility yet or had unchanged budgets (Exhibit 3). Of the libraries facing cuts above 10%, most (87%) have already decided to seek discounts from publishers, as have 68% of those facing cuts of less than 10% (Exhibit 4). The sum of those that have decided to seek discounts and those reporting they will likely ask totals more than 96%. Unbundling at least one big deal is decided or likely for 87% of libraries with cuts above 10% and for 68% of libraries with cuts below 10%. Exercising a financial hardship clause is decided or likely for 33% of libraries with cuts above 10% and for 28% of libraries with cuts below 10%. According to the SPARC survey, cutting staff was seen as likely or decided by a sizable minority of libraries (about 41%, regardless of the depth of the cuts, and even 28% of libraries with no cuts).

The impact of cost reduction plans has started to be visible. The SPARC Big Deal Cancellation Tracker (INSERT LINK) shows that several academic and research libraries have started to act. In the first half of 2021, 12 institutions unbundled from big deal packages (with 11 of those cutting Elsevier titles).

At the other end of the spectrum, as shown in Exhibit 4, many libraries mention read and publish (R&P) agreements (agreements structured to convert library subscription payments to payments for OA articles by affiliated authors) as a possible response to budget cuts—62% of libraries with large cuts and 55% of those with smaller cuts have either decided or are likely to pursue at least one transformative agreement (even if it is unclear whether librarians really see transformative agreements as a source of savings or a support to OA policies and faculty preference for OA publishing).

2. Role of Transformative Agreements

Though SPARC does not closely monitor these agreements, a large database of deals is available through the ESAC (Efficiency and Standards for Article Charges) Transformative Agreement Registry.¹ There is no standard definition for what constitutes a transformative agreement, nor do all academic institutions accept them. However, as common themes from these agreements emerge, it is useful to highlight some of their characteristics and implications. For libraries, institutions, and consortia that pursue these agree-ments, the intent is typically to convert subscription spending into publishing spending, with the goal of minimizing double-dipping and introducing price competition, as costs per article become clearer. However, these agreements have several consequences, often unintended and undesirable, for the participating institutions.

• Since all these agreements are based on article processing charges (APCs), they value that model at the expense of others. Participating in these agreements favors well-funded institutions, and STEM disciplines are favored over SSH disciplines and less well-funded institutions.

• Aggregate library spending may be expected to rise, because most publishers will seek to maintain their current revenues. The corporate sector contributes an estimated 15% of total subscription revenues for some of the leading STM publishers, but this contribution would probably decline to near zero in a complete shift to open access, and publishers would look at academic funding as the most obvious source of alternative revenues. Some marquee institutions may receive attractive deals, but several others are effectively being asked to compensate for these discounts with higher spending elsewhere.

• Financial resources that could be reinvested in supporting community-owned academic communications infrastructure continue to be spent to support the incumbent vendors, thus stifling competition, innovation, and change.

• The transformative agreement model implicitly redistributes aggregate costs from “reading-heavy” to “publishing-heavy” institutions. This shift creates tiers of winners and losers, and it is likely to concentrate losses in a relatively small number of institutions that will be affected much more severely than expected. It also signals that open “read” access has no economic value, which undermines alternative open models that seek support from “read” institutions.

• Many transformative agreements are based on average APCs, bundled APC prices that conflate “must-publish-in” journals with journals that are not as prestigious and relevant. These bundles negate (or curtail severely) the possibility that competition will lead to declining prices and margins for lower-impact-factor journals. Smaller publishers that do not have such marquee journals can be particularly disadvantaged.

• To the extent that the pricing structure of both traditional subscriptions and transformative agreements remains opaque and cannot be directly compared with those of others, they continue to lack transparency.

• Publisher concentration is likely to increase. Larger publishers have more resources, both to support the lengthy and complex negotiations required (leaving smaller publishers unable to complete as many deals) and also to provide supplementary services (like APC administration and accounting). Moreover, publishers entering R&P agreements gain a meaningful competitive advantage in attracting authors, further increasing concentration.²

• Inequities in research access would be replaced by inequities in publishing opportunities, as APCs are already too high for many researchers, not only in low- and middle-income countries but also in less-funded institutions in high-income countries. Waivers programs are discriminatory, both because they formalize different categories of authors and also because their actual operations are inconsistent, something which is recognized even within STM (International Association of Science, Technical, and Medical Publishers).³

• Publishers like Elsevier that also operate a data analytics business may be handed vast amounts of additional data on grants (and on grants spending patterns), further contributing to consolidation of the data analytics sector into a small number of competitors with excessive market power.

One final word: R&P agreements will likely prove transitional, rather than transformative. European and global funders that participate in Coalition S will disqualify hybrid journals by 2024. However, the trend in the US is toward achieving shorter embargo periods for OA and ultimately for eliminating them altogether. In this context, R&P agreements may prove less relevant to the economic model of scholarly communications than is perceived today.