2017 was not a good financial year for the Public Library of Science (PLOS).
PLOS’ most recent 2017 financial overview, released on 12 December 2018, depicts an organization trying to reinvent itself, focusing less on disruption and innovation and more on efficiency and collaboration.
Revenue at PLOS was down by nearly US $2 Million in 2017, largely the result of declines in submissions to PLOS ONE, its largest journal, according to the report.
More importantly, PLOS wrote off US $11.1M in expenses in building Aperta — a manuscript submission system that the publisher ultimately decided to abandon after years of development.
Total salaries and employee compensation were also up by 2% in 2017 despite publishing 7% fewer papers.
Elizabeth Marincola, the former CEO, whose abrupt departure from PLOS was announced by tweet, received $363K in compensation in 2017 but left her position in 2016. Her exit came barely three-years after the abrupt departure of PLOS’ previous CEO and CFO. Marincola was replaced by Alison Mudditt in June 2017, who was paid $203K for six-months of service. (Disclosure: Mudditt is a current blogger at The Scholarly Kitchen).
The net effect of reduced revenue, increased personnel costs, and developing software that it never fully implemented, required PLOS to dig deep into its savings, reducing its net assets by nearly one-half (from $29.8 M in 2016 to $17.0 M in 2017). PLOS still has a lot of money in the bank, just a lot less of it. Given that publication output was down again by 11% in 2018, we are likely to see another poor balance sheet next fall.
PLOS is not a financially diversified company. It is almost entirely dependent upon a single revenue model (the article processing charge) from a single journal (PLOS ONE). This makes the publisher highly vulnerable to market changes and competition with larger, more diversified publishers, like Springer Nature, which publishes Scientific Reports. In 2017, Scientific Reports overtook PLOS ONE as the largest scientific journal.
PLOS’ 2017 Financial Overview is a humbling read. Grand aspirational goals to disrupt and reinvent scholarly publishing are replaced with promises to work with others in collaboration and to seek greater efficiency within their organization. In a short few years, the tone in its reports has shifted from exuberance to existential dread:
“All our decisions in 2017 (and 2018) have been driven by the need to be fiscally responsible and remain a sustainable non-profit organization.”
While PLOS’ piggy bank is still half-full, it may be difficult in a time of financial retrenchment to convince its board and stake-holders that it desperately needs to take on new challenges in the coming years or risk becoming a much diminished and marginalized publisher.