We are often asked by associations that publish their journals via a publishing services agreement (PSA) with a larger publisher whether they should issue a competitive request for proposals (RFP) or simply renegotiate a renewal with their incumbent publisher.
The journal publishing services RFP is an intensive process. At C&E, we have worked to make it as painless as is practical for our clients. But it still requires a significant level of client engagement. Clients often wonder, Is it worth it? Do we have a good deal now? If we issue an RFP and collect competitive bids, will the results be worth the effort and justify the costs associated with running the process?
These are the right questions to ask, but only sometimes do they have clear answers. We can evaluate a client’s existing journal agreement (or an offer from the incumbent publisher for an upcoming contract term) against the dataset of the many other deals we have negotiated. (The specifics of those deals remain confidential, but they give us insight into market conditions.) In some cases, this analysis might tell us whether a client has an extraordinarily favorable (or unfavorable) deal. But in most cases, it is not clear cut. Journals are not commodities. They have different revenue profiles, different audiences, different topic areas, different usage numbers, different competitive profiles, different portfolio dynamics (when there is more than one journal in a society portfolio), different submission numbers, and different impact factors (among many other variables). These differences make comparison of offers between different journals or portfolios difficult.
In addition, publisher offers are issued in a dynamic and competitive environment. The same publisher might value the same society portfolio very differently at two different points in time based on that publisher’s strategic priorities, gaps in the publisher’s portfolio, or simply how many other deals the publisher may have in play at the time (publishers do prioritize their money and attention for higher-value journal portfolios). The value of a journal portfolio is based on market factors and what a given publisher will pay for it at a given point in time. And the only way to know how publishers will value a given journal portfolio at a given point in time is to issue a competitive RFP.
The competitive dynamics inherent in the RFP process also create an environment that generates better offers. Publishers vying for a portfolio often improve their offers (if they want a chance at winning the business) based on the market value that is being confirmed by the RFP process. In our experience, the improvement in final offer through an RFP process almost always “pays back” the cost of the RFP itself (sometimes many times over).
Beyond providing a market-tested journal portfolio valuation, societies typically learn a great deal about the publishers themselves, as well as how each publisher thinks about and values the society’s journal portfolio and the opportunities for the society’s program in the marketplace. It is not unusual for a society to make meaningful changes to their publications based on what they learned during the RFP process. Even if the outcome of the RFP process is to remain with the society’s incumbent publisher (whether that publisher is the highest bidder or not), societies find the process worthwhile.
That said, there are times when understanding how the market values a society’s journals at a particular point in time is not essential. For example, let’s say the publisher relationship is good, and all metrics are moving in the right direction, AND the society has gone out to the market with a competitive RFP process in the recent past (e.g., the society is 3 years into a 5-year contact), AND the incumbent publisher has put forward a favorable advance-renewal offer, AND nothing has occurred in the current contract term (either in the market broadly, or that society’s portfolio) that would warrant a substantive increase in a financial offer. Under these circumstances, we may advise a client to consider an incumbent’s advance renewal offer, given that the society has recently market-tested their portfolio and there have been no material changes that would warrant further market testing.
We are frequently asked whether it makes sense to first solicit an advance offer from the society’s incumbent publisher and use that to evaluate whether or not to issue a competitive RFP. An early, preemptive offer can be a useful gauge of health of the publishing partnership and the outlook for the next contract term. However, absent a competitive set of offers from other publishers, the preemptive offer is impossible to evaluate from a market perspective. Is it the best offer? Is it even the best possible offer from the incumbent? There is no way to know. More often than not, societies decide to conduct a competitive RFP process even with a preemptive offer from the incumbent in hand.
A challenge with preemptive offers is that of timing: Any evaluation of an advance offer needs to allow enough time before the end of the current contract to conduct a competitive RFP process in case the incumbent publisher’s offer is not sufficiently favorable. The option of a competitive RFP process must remain on the table, even if negotiating early with the incumbent. This means having an advance offer in hand 18–24 months in advance of contract expiration.
Determining which course to take – renewal with the incumbent vs. competitive RFP – is a big decision with significant financial and strategic implications for years to come. To help inform this decision, and to prepare for either approach, we recommend performing a situation analysis well in advance of the next contact cycle. The situation analysis, ideally involving independent, external review by an expert in the business of journal publishing, provides an opportunity to review all the relevant materials (contract terms, financial reporting, editorial trends, sales trends, marketing reports), situate the portfolio within the current market context and its competition, and assess the performance of both the portfolio and its publisher.
Sometimes, the situation analysis may point to a clear answer to the question of whether (or not) to issue a competitive RFP. Even in cases where there is no clear-cut answer, the situation analysis provides a foundation for either a competitive RFP or a renewal negotiation with the society’s incumbent publisher. It surfaces the key goals for the society and its journals in its next publishing partnership which can be used to evaluate publisher fit. The situation analysis may also identify actions the society can take in advance of its next contract cycle to increase the value of its portfolio. Ultimately, the added value of a competitive RFP will depend on the specific journal portfolio and current market conditions. But it will provide the assurance that you are getting the best offer possible, validated by the market. And you are likely to come away with some valuable insights about your journal portfolio as well. Your publishing contract may well be your association’s most significant contract, and taking steps to position your organization to extract maximum value from it is likely worth it.
Learn More about Publishing Services Agreements and RFPs
The most prominent scientific and scholarly organizations in the world turn to C&E for high-stakes publishing negotiations. In aggregate, we have negotiated over a billion dollars in journal contracts — learn more about how C&E can help your organization successfully negotiate its next publishing services agreement.
