Re: Libraries Urge Justice Departmen to Block Cinven and Candover Purchase of BertelsmannSpringer

["Anthony Watkinson" <anthony.watkinson@btopenworld.com>]

Phil and list,

I no longer have access to any part of any of the archives of any of the
companies I worked for in the past. In the case I mention I know that the
archives have been destroyed.

I can however assure you that at Chapman & Hall we bought one list of
eleven journals and either did not increase the prices the following year
(at all or other than minimally) and for some subsequent years (not sure
how many), because we felt the prices were already too high. Publishers do
look at price per page, price of competition etc.

This is one particular occasion I am sure about and I shall try to produce
external evidence but it is not easy for me to do so. I recall other
examples where single journals were acquired but they would be even more
difficult to track down. If I can get evidence either way I shall come
back.

I am not aware that McCabe's paper has ever been challenged in the
economics literature, but I do not read that literature and would not be
equipped to make judgements about it even if I had someone to pay me to do
so. I am not sure if anyone has been over his evidence to confirm his
results either or extended his examples to all the other mergers and
takeovers that go on.

I am just explaining my doubts about the inexorability of his theory,
which are based on my own experience. To repeat - not all companies
increase prices when they buy journals.

Anthony

----- Original Message -----
From: "Phil Davis" <pmd8@cornell.edu>
To: <liblicense-l@lists.yale.edu>
Sent: Friday, June 06, 2003 4:01 PM
Subject: Re: Libraries Urge Justice Departmen to Block Cinven and Candover
Purchase of BertelsmannSpringer

> Anthony Watkinson argues that while Mark McCabe's research indicates that
> mergers result in higher prices, he disputes that publishers see this as
> cause and effect, and wonders why we have not asked publishers HOW they
> decide to price journals.  With all due respect to Anthony -- in
> philosophical terms -- this is a red herring.  It is not necessary to
> prove intent in order to demonstrate that mergers in the publishing world
> have resulted in higher prices.  Whether mergers directly cause higher
> journal prices, or whether mergers cause changes in the publishing
> environment which then cause higher prices is moot.  The research of
> McCabe and others illustrate the relationship between mergers and price
> increases, and that does not appear to be disputed.  If Anthony can find
> contrary evidence that mergers cause prices to fall, or even price
> stabilization, I would be very interested in seeing this research. --Phil
> Davis, Cornell University