22. RELX Group

Revenues 2014: £ 5.773 billion (€ 7.161 billion)

Overview

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Scientific magazines, databases, special interest papers – for more than a hundred years, access to information has been a profitable business for the British media company Reed Elsevier.

General Information

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Headquarters:
1-3 Strand, London WC2N 5JR, Großbritannien
Phone: 0044 – 20 – 7930 - 7077
Fax: 0044 – 20 – 7166 - 5799
Homepage: www.reed-elsevier.com

Branches: Newspapers, book publishing, science publishing, exhibitions
Legal form: Cooperative public company consisting of the two companies Reed International und Elsevier N.V.
Financial year: 01.01. - 31.12.
Founding year: 1894 (Reed), 1880 (Elsevier)

Table I: Economic Performance
20152014201320122011201020092008200720062005
Revenues (in Mio. £)5,9715,7736,0356,1166,0026,8006,0715,3344,5845,3985,166
Profit after taxes (in Mio. £)10089551,1101,069760642982901888625464
Employeesn/an/an/an/a30,50042,300--34,80031,50036,80036,000

Table II: Segment revenues 2005-2011 (£ Mio.)
ElsevierLexisNexisHarcourt EducationReed ExhibitionsReed Business
20112,0582,542---*

707

695
20102,0262,618---*693718
20091,9852,557----*638891
20081,7001,940----*----1,694
2007 1,5071,594----*----1,483
2006 1,5211,570889----1,418
2005 1,4361,466901----1,363

*Harcourt Education-segment was sold in 2007.

Table. III: Segment Revenues 2012-2014
ScientificRisk & Business InformationRisk SolutionsBusinessLegalExhibitions
20122.063---9266631,610854
20132,126---9335471,567862
20142,0481,439------1396890
20152,0701,601------1,443857

Executives and Directors

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Management:

  • Erik Engstrom, Chief Executive Officer, RELX
  • Nick Luff, Chief Financial Officer, RELX
  • Ron Mobed, Chief Executive Officer, Scientific, Technical & Medical
  • Mark Kelsey, Chief Executive Officer, Risk & Business Analytics
  • Mike Walsh, Chief Executive Officer, Legal
  • Chet Burchett, Chief Executive Officer, Exhibitions
  • Youngsuk Chi, Director of Corporate Affairs and Chairman Elsevier
  • Ian Fraser, Human Resources Director
  • Henry Udow, Chief Legal Officer and Company Secretary

 

Board Of Directors:

  • Anthony Habgood, Reed Elsevier
  • Erik Engstrom, Reed Elsevier
  • Nick Luff, Reed Elsevier
  • Dr. Wolfhart Hauser, Intertek Group
  • Adrian Hennah, Smith & Nephew plc
  • Robert Macleod, Johnson Matthew plc
  • Carol Mills, Xactly Corporation
  • Marike van Lier Lels
  • Linda Sanford, IBM Corporation
  • Ben van der Veer, KPMG

History

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The collaboration between British publishing giant Reed International with the Dutch Elsevier-Group began in 1993. Both companies operated as independent companies but have been operating under the moniker of Reed Elsevier since April 2002.
Reed started out as paper factory in 1894, went on to produce wallpapers and paint and it was not before the acquisition of consumer magazines and daily newspapers some 80 years later that Reed became a media company. From the 1980s onwards, the paper and painting supplies business was history and little by little Reed changed the focus from consumer magazines to special interest magazines.

Elsevier, founded 1880 in Rotterdam, already had been the largest special interest magazine publisher in the Netherlands when the partnership with Reed began to take form. The company owned the leading daily newspapers, such as the ‘Allgemeen Dagblad’. Just like Reed, Elsevier too decided to part with its consumer titles in 1995, in order to completely focus on expanding the range of the special interest division. A merger with another Dutch major publishing house, Wolters Kluwer, fell through to everyone’s surprise in March 1998, after it had been deemed a sure deal beforehand. Reed Elsevier might have blamed antitrust constraints for the outcome, but the dual structure of the British-Dutch company, sporting two headquarters and a dual-management probably had not been a totally irrelevant factor in the equation.
The company suffered from a serious blemish on its reputation early in the new millennium. From 2005 to mid-2008, the newspapers were full of headlines covering the company’s connection to the international arms trade. Of all things, it was the renowned medicine specialist magazine ‘The Lancet’, published by Reed Elsevier that criticised the activities of subsidiary Spearhead/Reed Exhibitions in an article. The latter specialises in the organisation of fairs and exhibitions. In September 2005, the company organised the DSEi (Defence Systems and Equipment International) for the first time, one of the biggest military fairs in the world, where one could find commercial traders for cluster bombs, which had been outlawed by the UNO (among others). ‘The Lancet’ distanced itself from the mother company’s relationship with the armaments industry on a regular basis, not failing to note that doing otherwise would not be morally acceptable for a medical publication. In March 2007, about 80 ‘Lancet’ editors penned an open letter as well as a catalogue of critical enquiries for Davis. Three pages featured protests concerned with the armaments fairs, including contributions by Ian Gilmore, president of the top doctor’s association, the Royal College of Physicians, US-Linguist Noam Chomsky and others. Sir Michael Atiyah, the influential former president of the Royal Society, called for a boycott of Reed Elsevier’s publications and an increasing number of scientists and universities all over the world joined the boycott movement and ceased to publish their research results in Reed Elsevier publications.

Shareholders and customers urged the responsible bodies to part with the particular business branch in question. The John Rowntree Trust, the generated revenues of which were used to support human rights and pacifist activists, finally reacted. It sold all its shares of Reed Elsevier. The former CEO Crispin defended the controversial engagement with a short statement, claiming that the “Defense industry would be vital in the upholding of freedom and national security.” The management reacted in March 2008 and announced that Reed Elsevier would discontinue to organise the DSEi in the future. The pressure coming from shareholders and the ‘The Campaign Against Arms Trade’ became too much for the company.

A rather embarrassing faux pas occurred in May 2009, when it became known that Elsevier was in the habit of producing magazines for Pharmaceutical companies for years on end that pretended to be independent special interest magazines. In a public statement, the publisher admitted that it only learned the fact that an Australian subsidiary had been publishing a series of paid publications commissioned by pharmaceutical companies in the time period from 2003 to 2005, shortly before the mishap leaked to the public. However, the publications in question were designed in a way that they mimicked the special interesting magazines and contained no note regarding a possible connection with the pharmaceutical industry. On top of that, the pseudo-magazines featured articles about hormone replacement therapy that had evidently been written by ghostwriters, who were on the pharmaceutical industry’s payroll.

Management

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Starting in 1999, the complex Reed Elsevier business structure went through fundamental reforms. By now, the management is unified and headed by a chairman and CEO. The respective subordinates are several managing directors for the various core divisions of the company. The former CEO Crispin Davis is considered the driving force behind the successful restructuring of an ‘archaic dual-country construct into a leading global media group’ (Guardian). Oxford graduate Davis had always been known to be a renovator. Prior to the move to Reed Elsevier, he managed to get the British advertising and marketing multi AEGIS back to its feet in no time. In his new job, he lost no time in deciding on a firm savings program, invested about 750 million GBP in Internet strategies and made sure Reed Elsevier would be one of the few companies that actually made some money in the World Wide Web. Unlike many other media companies, Reed Elsevier relied on an organic growth in the next years. In September 2005, the US database specialist SEISINT (www.scircus.com) was acquired for no less than 400 million GBP. SEISINT is an international dealer in addresses and phone numbers and its subsidiary ACCURINT processes the data of millions of US citizens for government administration and the legal sector. However, the deal did not go over without conflict. Human rights organisations and data protectors criticised that the inventories of the database administrator SEISINT (now a part of LexisNexis) would now also been accessible by the US terrorism defense database - MATRIX. In spring 2005, Reed Elsevier was forced to admit that hackers managed to hack into the SEISINT database and accessed data of up to 310000 US citizens.

Furthermore, the company continued to stay on a strict rationalisation course. During a company-restructuring period from 2002 to 2007, the number of global employees was pushed down once more to 31.500. A company-intern memo by CEO Bill Godfrey emerged in June 2008, in which the latter announced the dismissal of 900 employees before the year 2010.

The jobs did not vanish, but were merely relocated to China and India due to lower wages. Therefore, the growth rate and return on sales remained fantastic for the media sector. Following four years marked by losses because of the international advertising stagnation, David was finally in a position to announce a ‘recovery’ in the business sector in 2004. This is the only segment in which Reed Elsevier is dependent on the advertising business at all; all other business fields are almost exclusively financed through subscription fees.

Even the belated entry into the online world, something that was met with smirks by business experts, proved to be a golden strategy. From the very get-go, Reed Elsevier relied on close and tight relations to its customers and offers that were liable to pay.
Crispin Davis left the company in 2009. His successor was Ian Smith, the former CEO of English construction company Taylor Woodrow. Smith voluntarily vacated his position as CEO after a mere 8 months. The reason for the departure, according to the Media, had been internal discrepancies with the management. At the same time, Erik Engstrom took over the functions of the outgoing CEO.

Business Fields

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Two extremes clash in the portfolio of Reed Elsevier, one of the largest publisher in the world; Leading science publications, first and foremost in the field of medicine and law go hand in hand with the major showbiz central organ ‘Variety’ and the internationally important television content-fairs MIP-TV and MIPCOM in glamorous Cannes. Since the restructuring, the company is divided into four cornerstones.

Elsevier:
Elsevier (former Science & Medical) is the world’s leading publisher in all things regarding scientific information and releases approximately 1.500 special interest magazines and newsletters as well as up to 1000 books and CD-Roms per year. The ScienceDirect database grants about 10 million users online-access to 1.200 up-to-date newsletters, an archive of 6.7 million special interest essays and 40 encyclopaedias. The Health Science-division is one of the largest providers of special medical information in the world, with about 8.000 special interest books and 250 magazines, such as aforementioned ‘The Lancet’. Also part of the range is the medical profession’s online service ‘MD Consult’.

The organic growth that is facilitated through carefully planned acquisitions of smaller units that are a perfect fit for the portfolio sums up the long-term approach of Reed Elsevier. Thus, Reed supplemented his health division in the USA by buying the Gold Standard online pharmaceutical database in 2006, which processes up-to-date information for doctors and pharmacists regarding medication. In March 2007, Reed Elsevier acquired the Beilstein-Database via its subsidiary Elsevier MDL. The database for organic chemistry based in Germany is considered one of the largest of its kind in the whole world.

In order to tackle the raging plagiarism, Elsevier and the IT company iParadigms developed the CrossCheck software, which makes it possible for publishers to detect whether authors copied text(s) from other scientist. The foundation of CrossCheck is the Reed Elsevier catalogue, encompassing more than 20 million magazine articles. Most important brands: Elsevier Science, Academic Press, Butterworth-Heinemann, (Harcourt Health Science)

Lexis Nexis:
Acquired by Reed Elsevier in 1994, Lexis-Nexis (LN) dominates the field of juristic literature. LN North America Legal Markets offers specialist information, legal commentaries and documentation of verdicts for lawyers, administration and the courts of all 50 US-states. LN US Corporate and Federal Markets includes the business-law service Nexis.com as well as special packages for universities and research. More than one million lawyers from 160 countries are connected with the Martindal Hubell Legal Network.

In March 2008, Reed Elsevier acquired ChoicePoint Inc. from Alpharetta, Georgia for 4,1 billion Pounds, a company that specialises in accumulating data of all kind. The disputed business model is defined as follows: ChoicePoint gathers free information in order to sell that very information in return for money. The data that is sold by the company to third parties such as insurances, marketing companies and governmental institutions, includes dossiers about individuals. These dossiers have already been created for more than 200 million US-American citizens and can be up to 20 pages thick. They include information such as credit data, vehicle registrations, criminal records, buying activities and results of drug tests. Yet, it is not only the data of US-American citizens that is being collected. Europe and Latin America have been on ChoicePoint’s radar for quite some time. ChoicePoint’s databases grew to such an extent over the last few years, they ended up being larger and more accurate than the official databases of the US authorities.

Ever since 9/11 and the adoption of the controversial Patriot Act, government authorities such as the immigration authority, the NSA or the FBI are allowed to access the personal data stored at ChoicePoint without a warrant.
Data protection activist Robert O’Harrow shed some light on the wheelings and dealings of ChoicePoint in his book ‘No Place to Hide’. He documents how the company, founded in 1997, initially rated the risks for insurance companies to insure specific clients. The company slowly transformed into a privately operated secret service through the acquisition of approximately 50 companies in subsequent years. The next step was to agree on contracts with the US ministry of Justice and CIA. In this manner, ChoicePoint turned into on of the most powerful companies in the USA. By now, the company can influence who boards an airplane, gets a position in a company or who is granted a credit. By the way, the top floor of the company is made up of the ‘Who is who’ of the (neo)conservative wing of the Republican party. The list of employees that worked for ChoicePoint includes William Crowell (Former NSA director), Vin Weber (Lobbyist and former congressman) and Viet D. Dinh (Author of the Patriot Act-law)

Reed Business Information (currently for sale):
Cahners Business Information is one of the leading US-American special interest publishers, releasing more than 85 specialist titles for 15 different businesses. When it comes to the media division, the most famous are titles such as "Variety", "Publishers Weekly" and the "Library Journal".
In Europe, the sub-divisions Reed Business Information (GB) and Elsevier Business Information (Netherlands/Belgium/France/Germany/Spain) publish a total just short of 200 special interest titles (including ‘New Scientist’).

Reed Exhibitions:
This particular segment is one of the most prolific organisers of fairs and trade shows in the world, organising almost 470 events per annum.

Content

Institute of Media and Communications Policy

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Media Pluralism in Europe

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Partners

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Mediadb.eu is funded by medienboard Berlin-Brandenburg,

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the Open Society Foundations' Media Program,

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Germany's Federal Agency for Civic Education,

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the Rudolf Augstein Foundation,

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the city of Cologne, Germany,

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and the State of Thuringia, Department of Commerce.