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Campus Capitalism: Let's Keep Bookstore Profits Here

Selling textbooks is "Big Business" on some college campuses. In recent years, giants like Follett College Stores and Barnes & Noble College Bookstores Inc. (B&N) have figured out that they can increase investors' profits by selling textbooks to more students. But instead of opening new stores to compete with established booksellers, the corporations persuade college administrators to let them take over management of an institution's bookstore.

Out of this bargain, the university usually receives a lump of cash and a regular share of revenues, and students end up paying higher prices. How much more? Nationwide research indicates that prices for used textbooks are 4.5 percent higher in campus bookstores taken over by a corporation, 3 percent higher for new textbooks and 10 to 15 percent higher for other merchandise.

Maybe those percentages don't look big, but the dollars add up to a pile of money for B&N College Bookstores and for Follett. It's hard to get exact figures because both companies are privately owned and don't have to disclose finances. Yet, the retail stores of Barnes & Noble Inc., a public company that's separate from the college stores, boasted a 6.3 percent operating profit margin in 1998. Applying that profit margin to published estimates of B&N College Bookstore sales would yield $50 million in operating profits for the New York City company. Applying the same margin to estimates of Follett sales would yield $75 million in operating profits for the River Grove, Ill., company.

With profits like that, it's no wonder these big corporations are charging ahead to take over more campus stores around the county. These two already manage more than 850 college bookstores and are picking out new targets month by month!

Why are college administrators so willing to go along with these new campus capitalists from out of town? Because running a college or university requires so much money today. The cash waved by B&N College Bookstores and Follett is hard for a dollar-strapped administrator to ignore.

Still, these bookstore deals are the equivalent of raising tuition but without the risk of protest. Students pay more for books and merchandise, and the corporations give some of the increase to the institution and keep the rest for themselves, adding to their millions in profits.

If the administration wants more profit from the bookstore, maybe that's okay. But let's keep it all in town. We don't need Barnes & Noble. We don't need Follett. We simply need to keep the bookstore in our own hands and manage it as our own profitable business to serve the college community and the people who invest their lives here. Now, that's not just noble; that's smart.