Updated November 27, 2012
McGraw Hill, one of the world's top textbook publishers, was just sold for $2.5 billion to Apollo Global Management, according to Inside Higher Ed. Debra Borchardt, in The Street, describes Apollo Global Management as a private equity firm that "gives Wall Street a bad name. And that's saying something".
From Inside Higher Ed: "Waterhouse said that the company would continue to expand in digital education, and that - as a private company - "we won't need to worry about short-term focus and pressures".
Comment: a Wall Street bad apple expanding into higher education is something we should be watching - and take note of the long term focus.
While this announcement is not directly relevant to open access or education, those working in either area should be aware of this and of strategies that could be deployed by a company like this, whether now or in the future.
For example, a company like this could move into open education for the short term, giving away textbooks or courses with a view to out-competing existing higher educational institutions, then charging substantial amounts for their courses later on. This is something to watch for - a company designed to reap profits giving things away may well be strategizing for maximum profits at a later date.
For open access advocates, this development is important because one question we should be asking ourselves is - could be possibly be worse off than with the existing owners of scholarly publisher such as Elsevier? Elsevier, Springer, etc., have their disadvantages for scholarship, but these companies have a long history with the scholarly tradition and changing ownership to companies with experience in the financial industry might make things worse for scholarship.
Aside from outright sales of existing publishers, this is a cautionary tale for those who promote the Creative Commons - Attribution license (CC-BY), which gives third parties commercial rights and comes with no strings requiring reciprocity or ongoing free access. When scholars give away their works with this license, they can be used by companies like this whose strategy might be to outcompete our employers, which threatens the employment of scholars. For this reason, here is my advice:
Faculty and teachers: DO NOT GIVE AWAY YOUR WORK FOR COMMERCIAL RIGHTS. If you are using CC licenses, use Noncommercial.
Update: here is the link to the news release McGraw-Hill to sell education business to Apollo for $2.5 billion from the McGraw-Hill website.
Excerpt: NEW YORK, Nov. 26, 2012 /PRNewswire-FirstCall/ -- The McGraw-Hill Companies
(NYSE: MHP) ("the Company") today announced it has signed a definitive
agreement to sell its McGraw-Hill Education business to investment funds
affiliated with Apollo Global Management, LLC (NYSE: APO) (collectively with its subsidiaries, "Apollo"), for a purchase price of $2.5 billion, subject to certain closing adjustments.