“You pay less, I earn more”… or how UC and Springer Nature made a seemingly win-win agreement

And yet another agreement! While it was celebrated over the ocean as “the largest OA deal ever signed in the US” or a “milestone” for OA, we Europeans are now used to these “groundbreaking” contracts announcements every other week. So much that I have already written one in March on the German Springer/DEAL and another one in May on the Faustian Elsevier/Dutch consortium. So all things come in threes, and for a good reason, as Californians give us some food for thought on the financial side of the agreement.

First of all, it should be noted that the contract between Springer Nature (SN) and the University of California (UC) has not yet been written, but that only the Memorandum of Understanding (MoU) was made public this week¹. This publication derives from a clear commitment on the part of the universities to make the negotiation processes and the principles governing the choice of subscription, support or no deal transparent to the local academic communities, but also more broadly to all stakeholders interested in these issues.

As we are almost in the middle of the year, the fact that the agreement has been signed for the years 2020 to 2023 has a first important consequence: all the mechanisms necessary for the identification of authors, for the various payments and for monitoring will probably not be in place before the end of the year (SN is committed to this by 1 January 2021). In practice, UC will pay in 2020 an undisclosed amount name “UC 2020 spend” for a Read & Publish in which the Publish part will be free of charge. It is only over the next three years that mechanisms will appear, which combined originality is at the heart of this post.

The Muti-payer model.
Getting authors and funders involved

One of the originalities of this contract with Springer is the adoption of a model first experimented in the UC/PLOS agreement, with the splitting of an APC into two distinct blocks: the first 1000 dollars which will be systematically paid by the university and the rest which will be paid by the authors if they have the possibility to do so. This mechanism smells like a device invented by economists, and it is one, a professor at UC Berkeley, who describes its purpose in The Scientist:

“In the US, there already were multiple funding sources—libraries paid for subscriptions, and when authors wanted to publish open access, they paid a surcharge on top of that out of their funds,” says MacKie-Mason. “The key thing here is that we’re integrating those into a single contract. That creates cost control for the institutions and the researchers [during the transition to open access], which is critical because the cost of scholarly publishing has been exploding.”

So the solution to the “new serial crisis” would be to imply authors as UC people have repeatedly stated², but aren’t they already with classical “one shot APCs”? The idea to combine APC with institutionnal support in a contract is here pushed to the limit as we will see. In some “transformative agreements”, there is no way for a third party to understand who in the end pays what and from which source, especially in consortiia stteings. Here, it is quite the opposite as in the who MoU, a clear separation is made between two sources:

1. The UC – would it be California Digitaly Library or UC itself – takes in charge a 750,000$ reading fee, 1000$ for each APC and, as we will detail, more if authors can’t pay. All these will be counted apart in “UC Fully OA Spend”, “UC Hybrid Spend” and of course the reading fee.
2. The authors would pay the “APC remainder”, whoever is the original funder, and these sums play a very limited role into the contract, are not agregated under specific names.

So the splitting is not only made for each article, but for the total contract as “cost regulation” supported by Mackie-Manson but in fact only on the UC side, authors could spend whatever they wish on APC, and benefit from the UC participation. In consequence, as authors shall pay, they have the possibility to opt out of OA in hybrid journals, which is the default option. Consequently, the deal does not guarantee that all UC corresponding authors articles will be OA, but only those who wish so and, to some extent, that are ready to pay, favorable to hybrid journals, or APC gold open access supporters. The division and authors’ choice are highly visible in an exception in the contract. If, despite very short deadlines, SN was able to implement the entire workflow before the end of 2020, then it could start invoicing APCs. Under no circumstances would UC have anything to pay, but authors could be solicited:

Should Springer Nature implement the Multi-payer Model before January 1, 2021, Springer Nature may begin collecting the APC Remainder under the terms of the model […]. If the corresponding author does not have research funds available to cover the APC Remainder, then Springer Nature shall not collect an APC for those articles. No UC Fully OA or Hybrid Spend payments will be charged during this time (article 3.8.2).

It is hard to imagine a corresponding author who can get free APC deciding to pay, unless their grant is nearing completion and they cannot spend it otherwise. But this provision does indeed support the idea of two decoupled payers, as the rules applying to them may differ, the first (UC) not paying in 2020 before being obliged to contribute, the second remaining in a logic of choice throughout the contract. But what exactly are the amounts to be paid?

Price, Volume, Participation :
an equation to determine an Hybrid bill

The price calculation formulas are not yet complete, since the agreement is not signed, but the foreseeable variations are known throughout the contract. For full OA journals, there will be a base price in 2020, with a maximum increase of 3.5% per year. This base price is certainly not the catalog price, since it is specified that ” If at any time during the agreement the then-current list price APC is lower than the APC to be charged under the agreement, the current, lower APC will be charged instead” (art. 3.3). The issue of prices and volumes is most complex when it comes to hybrids APC. First of all, unit pricing is almost constant with the same prices in 2020, 2021 and 2022, and a maximum increase of 2% in 2023. But while the paid volume published in full OA appears unlimited, the paid volume published in Hybrid journals is very constrained.

First the number of articles published in Hybrid by the corresponding authors in 2019 and 2020 is calculated, and the smallest of the values is taken, which becomes the Base article number. The minimum volume of articles is then simply defined as 85% of this number, over time. On the other hand, the maximum number depends on two variables: first, an “inflation” of the authorized volume, of 5% per year, then a calculation that depends on the effective participation of the authors in the publication scheme. Indeed, the parties expect that between 30% and 40% of the authors of articles will choose to publish in hybrid AO rather than revert to a paywalled publication. (orange curve) If the program is successful, more than 60% of the authors adhere, then the red curve defines the maximum number of articles; symmetrically, in case of failure – less than 30% – it is the yellow curve that defines this maximum number.

In a close fashion to the agreement with DEAL, Springer defines a volume control on Hybrid, which can lead up to a third more articles published than the current Hybrid APC. But the consequences of going over this limit are very different than the German counterpart : UC is not anymore paying its 1000$ above the maximum, but authors – if they chose so, must pay the APC remainder. On the other end, if the minimum is not reached, UC shall pay “the average hybrid APC for UC corresponding authors from the previous year for the number of articles necessary to bring the total to the minimum. In 2021, the average hybrid APC from 2019 ($3208) shall be used.” So Springer Nature is sure to have (almost) its money back and UC has a control mechanism which prevents a high rise of its Hybrid spend by volume control.

Hard capping the total costs.
Will UC pay less in the end?

Until now, it seems that we analyse another “cost-neutral” agreement that in practice could absolutely become a high rise contract : APC individual price inflation, unlimited payment for full OA articles, controlled max rise of hybrid OA would contribute to a larger bill for UC. Then comes the most original point of the UC/SN contract : a hard cap on the sum of fluctuating bills. In fact, some agreements, typically the JISC ones, include a price control that says “we will pay this, period”. Of course, the trade off is most often a defined, limited volume. Here, as we read it in article 3.6.

In each year of the contract, the Total UC Spend shall be subject to a fee control mechanism, as set out below. All fee control mechanisms are computed in relation to the license fees paid by UC for Springer journals, Adis Journals, Palgrave journals, andacademic journals on nature.com in 2020 (“UC 2020 Spend”).

So the starting “subscription” – ie Read & Publish – set price caps the whole price of the contract, once again in a very precise and shall I write, twisted way. Starting from the “UC 2020 spend”, in 2021 you can not exceed 95% of that sum: if it is the case, then UC gets some reading fee part, and if it is not enough, refunding from SN. So the max is clear and -5% compared to the starting year. But in 2022 and 2023, you can not exceed 98% of that sum ; if it is the case you get only the Reading fee back and nothing else. In other words, there is in fact no fixed maximum payment, and certainly not a garantuee that UC would pay less in 2022 and 2023 than in 2020, and as we don’t know what were the different bills, even more less than 2019³. The UC part is very confident on the result as the associate executive director of the California Digital Library, Ivy Anderson, stated : “The new agreement is expected to save the system money overall, but the exact cost will depend on the number of articles UC researchers publish”.

Whatever the final outcome, and one can think, given the complexity of the provisions that the UC part has run many simulations on its final bill, there are three lessons to be learned from this MoU. First, in the absence of price transparency, it is difficult for outsiders to determine whether an agreement is really financially interesting or whether it mechanically leads, as with subscription formulas, to higher prices paid by higher education institutions. Secondly, this agreement builds a link between the payment of authors and that of the university: it therefore allows the direct inclusion of research funders, while ensuring traceability and monitoring of flows for each of the parties. It also contains incentives on the behaviour of authors, who would benefit from using the UC workflow to partially or totally reduce their own payment. But it is the ability to capture money from funders, third parties to the contract, that is striking, with certainly Coalition S members in mind.

Consequently, thirdly, it is the de facto guarantee of Springer’s revenues by encouraging new spending in the form of APC in subsidizing them. Making new provisions to turn the Nature journals into a hybrid goes in the same direction. In a similar way to “Pure Publish” agreements that goes with a discount on APC, the UC agreement is a transformative one as it explicitly changes universities from fund providers to fund collectors for publishers, with the hope of a diminishing or stable bill in exchange for that service.

1. We saw on the Dutch case that there could be quite significant differences between an MoU and the actual contract [↩]
2. See this piece on Impact of Social Sciences LSE Blog [↩]
3. I previously wrongly tweeted that they would pay less, as I thought the reference was UC 2019 spending [↩]

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