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The Real Story Behind UPNE’s Closure

A former senior administrator at the College writes in:

UPNE logo.jpgUPNE has never been a very successful consortium/venture and was losing money (all funded by Dartmouth) going back to at least the early 2000’s. I can’t imagine that its situation has improved since, largely because of the rise of online publishing for scholarly articles and small circulation hardcover and paperback books, plus poor management and out-of-control costs.

You may have in your library a copy of the history of the Skiway, a small 50-80 page hardcover that was originally published by UPNE in the early 2000’s. When the College was looking into a re-run as a possible donor gift, UPNE’s quote was in the neighborhood of $10,000 for 200 copies — yet a local publisher who runs a small imprint for one of the larger NYC publishers provided a quote of $2.00/book plus $2,000 in setup fees from a high-volume midwest commercial printer… that’s only $2,400, less than one quarter UPNE’s price.

That something should have been done about UPNE long ago — the consortium shrank because the other participants refused to fund their share of the losses — is unquestionable. What is sad is that Dartmouth didn’t have the smarts or the initiative to wander down Tuck Drive to find the smarts — to figure out how to turn it into something that actually made money. Duke University Press, for example, is active as a print and electronic publisher of books, scholarly articles and journals. They make good money at it.

If you don’t see the pattern here, you are never going to see it, for it is the same poisonous mixture of bad management and wildly excessive costs that afflicts the Hanover Country Club, the Skiway, the Hanover Inn, Dartmouth Dining Services (DDS) and any other Dartmouth entity that has to compete with businesses working in the real world. Of course, the same malady afflicts the College itself, but the school exists in a lala land where people will pay virtually any price to attend.

Start with bad management that allows slack workers to keep their jobs, leading to low productivity and an environment where high performers feel like chumps (so they don’t stay around). Then add a cost structure of over-market salaries, palatial health benefits, and long vacations. All that leaves a place like UPNE in a position where expenses are wildly out of whack compared to the private sector.

In the first instance, such an enterprise raises its prices in an attempt to cover its losses. Any undergrad who buys a snack at Novack Cafe knows what I mean. Above-inflation tuition increases might work for the College, at least for now, but real world customers sooner or later migrate to different suppliers. As a result, the losses start to pile up.

A further solution is to force customers to make purchases, as DDS has done. Prior to the late 1990’s, students were not obligated to have meal plans; now all student need to pay up to support the DDS welfare state.

Subsidies and enforced monopoly power last for a while, sometimes a good while, given that the College has an endowment that throws off a quarter of its budget. However, in the long run, a distorted cost structure cannot be maintained. Either an entity elicits additional subsidies from alumni (like the swim team or the Skiway) or it must be closed, as in the fate of UPNE and possibly the Hanover Country Club golf course.

When a poorly managed institution faces private sector competition, the situation can’t last. Rather than cutting wages and benefits to market levels and adopting good management practices — something that might have even appealed to the soon-to-be-laid-off employees of UPNE — the only option apparent to the administration is to shut down a money-loser. Everyone gets fired, and the world is the poorer for all the UPNE books that will never see the light of day.

At the rate we are going, in a few years Dartmouth will consist of only dorms, classrooms/labs, dining facilities, and libraries, and tuition will run over $100,000/year. All that in order to keep an army of low-productivity administrators in their jobs.

Addendum: Let’s not understate what we are losing with the closing of UPNE. Inside Higher Education reports:

The University Press of New England has published about 60 books a year on the subjects of the humanities, liberal arts, literature, New England culture, interdisciplinary studies and fine, decorative and performing arts. The press has also published a number of books about higher education.

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