The University of California (UC) announced today a four-year arrangement with Elsevier that is the biggest transformative agreement in North America by article count as well as financial spend. This agreement achieves UC’s goal of an integrated contract for reading access and open access publishing. It will be a test of both the financial sustainability and the financial desirability of the multi-payer model.

The Prospect Before Us
The Prospect Before Us, The Art Institute of Chicago.

The Split

The University of California made headlines on February 28, 2019 when it issued an unexpected press release declaring that “Elsevier was unwilling to meet UC’s key goal: securing universal open access to UC research while containing the rapidly escalating costs associated with for-profit journals” and as such it was ceasing negotiations with the publisher. The split was significant. In its wake, multiple Elsevier executives, including its CEO, departed. 

In days and weeks that followed, other libraries issued statements of support, researchers signed petitions, and editorial board members suspended their services. UC stepped up to offer training and guidance to other institutions, including hosting The Tipping Point Forum “to advance understanding of the value and opportunities associated with negotiating, participating in, and supporting transformative open access agreements” and publishing a negotiations toolkit

The Agreement

Large-scale, multi-institution transformative agreements are notoriously complex. This one is no exception to that rule. 

The base of the agreement is a capped payment by the libraries for open access publishing, which starts at $10.7 million in the first year and grows by 2.6% per year. Under the agreement, approximately 4,400 articles will be published open access annually. This will grow to approximately 4,700 when publishing in Lancet and Cell titles is enabled in year three of the agreement. It is worth noting that this can be enabled earlier at UC’s discretion. Reading access for Elsevier’s subscription journal content is included at no additional expense. There are optional add-on fees/services, e.g., perpetual access for an additional $1+ million. No other Elsevier products, e.g., Scopus or SciVal, are bundled into this agreement. 

In addition, because of how the UC multi-payer model is implemented in this agreement, beyond the capped library spend, Elsevier has the potential to realize revenues from author’s grant funds as well. The potential upside here for Elsevier in dealing with a major research institution could be substantial. 

Nonetheless, according to Jeffrey MacKie-Mason, co-chair of the UC negotiation team, the committed library spend plus the projected author contributions totals to less than the projected costs if the libraries had continued to pay subscriptions for reading access and authors continued to pay APCs directly from their grants. 

For Elsevier, then, this agreement means that they re-gain a substantial portion of the revenues they had lost when UC canceled its subscription in 2019, with an upside growth potential from author grant funds.  

Unbundling in the United States

Regardless of UC’s training and education efforts, relatively few in the United States seem to have been persuaded to pursue them. While multiple libraries have walked away from their Big Deal contracts with Elsevier, the ESAC registry lists only one transformative agreement with Elsevier in the United States, an arrangement with the University of Florida that provides a discount on author-paid APCs. Elsevier’s open access website also points to agreements with Carnegie Mellon University and California State University as well. Overall though, the trend is to unbundling, buoyed along by the unsub data service that facilitates modeling cost-savings through Big Deal cancellations. Notably, while the European-based ESAC hosts the Transformative Agreements Registry, US-based SPARC hosts the Big Deal Cancellation Tracking portal.

Bundling in Europe and Asia

In contrast to the unbundling trend in the United States, nation after nation in Europe has struck transformative agreements with the major commercial publishers. Elsevier alone has secured national level transformative agreements with Austria, Finland, Hungary, Ireland, Netherlands, Norway, Poland, Sweden, and Switzerland. Elsevier also has transformative agreements in Japan, Qatar and South Korea. These agreements bundle reading and publishing into a single contract but lack the multi-payer model that UC insists upon. Elsevier is now a foremost open access publisher. 

Other European countries may well be coming along. The UK organization Jisc has recently begun negotiations with Elsevier for a follow-on transformative agreement to the 2016 agreement that facilitated discounts on APCs. Germany remains the one high-profile Elsevier cancellation in Europe, with no updates posted to the Projekt DEAL website since August 2019. One imagines that conversations are likely underway with libraries and library organizations that have transformative agreements with other publishers but not yet with Elsevier.  

What’s Next?

Ivy Anderson, co-chair of the UC negotiations team, reflected on today’s agreement saying that she hoped other research institutions and consortia in the United States would take a serious look at it and see that “it is possible to negotiate and put into place a sustainable and affordable agreement even at a high output research institution.”  

But, the unknown factor is author response. While both sides have modeled projections, there is limited data on author behavior relative to transformative agreements generally and even less on author behavior under the multi-payer model. Will authors contribute their grant funding to the multi-payer model at the rates needed to sustain the multi-payer model overall? Will the current ratio of articles with a UC corresponding author to articles with a UC author stay the same over the course of the agreement or will the proportion of articles with a UC corresponding author increase substantially in order to take advantage of the library subvention? And, will authors shift to prefer Elsevier and other publishers with which UC has negotiated multi-payer agreements? 

Other universities and their libraries will be scrutinizing this newest agreement. Will it unleash a flood of transformative agreements among major US institutions? Will UC thereby establish the multi-payer institutional model as the US counterweight to the European and Asian national deals? This is probably the best case scenario for Elsevier’s performance in the public markets. The alternative is that US institutions largely ignore transformative agreements and continue their apparent path of “unsubbing” their way to reducing their spend. 

Lisa Janicke Hinchliffe

Lisa Janicke Hinchliffe

Lisa Janicke Hinchliffe is Professor/Coordinator for Research Professional Development in the University Library and affiliate faculty in the School of Information Sciences, European Union Center, and Center for Global Studies at the University of Illinois at Urbana-Champaign.


16 Thoughts on "The Biggest Big Deal "

Is the operating assumption for author behaviour that there is no change? Although UC authors might be more tuned-in than most.

Missing from my first comment is a thank you for the really helpful piece. I’m struggling to open the Dropbox viewer but will take a look!

Either, in terms of author behaviour. I figure researchers at UC will be more aware than most about this deal and the negotiations over the last few years, especially given the coverage. But authors at other institutions might not have he same awareness and are less likely to change submission behaviour (up or down).

UC researcher here: No, this was a near-complete surprise. I think the last we heard was, negotiations would resume. I don’t know what to think at this point and whether my behavior will change.

Thanks for the interesting analysis, Lisa. Is the contract openly available or where do the numbers of costs and increase come from? Thanks

This is quite the announcement. It certainly looks like a good business decision for the long term, but wonder what short-term decisions were made to reach an agreement on the financial commitment.

2.6% increase per annum? Only once in the last ten years has inflation exceeded 2.5%. This may be a good deal for UC but it’s sure as heck not a bad one for Elsevier.

In a subscription deal I think the data Paul offers is very relevant. But, in the context of this contract, all payment is for publishing activity. The cost to UC for reading is $0 regardless of whether Elsevier publishes a greater or lesser number of closed access articles each year going forward. I think the question one might ask is: will Elsevier’s costs to publish an OA article rise by 2.6% each year (framed as the price is related to cost) or is it the UC sees that the value of publishing an OA article increases 2.6% each year (framed as the price is related to value)?

Trying to understand here.
So, one of the ways Elsevier could benefit long term from this secured 2.6% article rise is if they would decrease Elsevier’s internal cost of publishing, right? (better processes, better systems, less waste, etc etc)
Would this assumption (among many other that make this deal a win win) be a correct one?

Part of the strategy at RELX, Elsevier’s parent, is to grow costs at a slower rate than it grows its revenues. It requires a lot of internal innovation to execute that strategy while investing in new products and services, but it’s been very effective. You won’t find any private jets or chauffer-driven cars at the company. The last time we refurbished RELX’s global headquarters (less than 100 people) was over 20 years ago. The furniture risks becoming retro chic, or more likely, just retro…

Thanks for the overview. Would all publications under this agreement carry a CC BY licence?

Section 3.1 Open Access Default of the MOU addresses this. There is a default to OA and CC BY but there is author choice re making a change.

Relevant text: “Upon signing of this Memorandum of Understanding, open access will be implemented as the pre-selected option for all accepted journal articles published by UC corresponding authors effective with the contract start date of April 1st, with CC BY as the pre-selected license choice. Authors may also choose a CC BY NC ND license if they so choose. Corresponding authors publishing in hybrid journals will continue to have the choice to publish their journal articles on a subscription basis and these authors will not be required to request a waiver of UC’s open access policy.”

“Under the agreement, approximately 4,400 articles will be published open access annually”.Do I get this right ? 10.7 millions for 4400 articles ?

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