What are the profit margins of academic publishers? With an eye to finding the reasons behind high journal subscription costs: do journals / publishers make outrageous margins, or are prices truly justified by the costs to run journals? In other words, how does their budget look like?
tl;dr: it is a distorted market. Open-access models involve cross-subsidy. Subscription models offer inflated profit margins to large publishers (and some small, very specialist publishers).
Those market distortions mean that suppliers' budgets will conceal as much as they reveal.
You'll find a little sympathy for the devil, here. Things are rarely pure, never simple, sometimes ugly.
Market prices?
As with most questions of the form &quot;why does this thing have this price?&quot; the answer is: supply and demand. It's that price because that's the price at which buyers and sellers agree on a quantity of supply.
But is it a fair market?
Is there an oligopoly?
There are very low barriers to entry: pretty much anyone with a computer and web connection can start a journal and get an ISSN for it.
Some profit margins at the big publishers (Elsevier, Taylor &amp; Francis), do suggest oligopolistic pricing - 25-35% margins look suspicious. While any sensible profit margin analysis would also look at returns on capital employed, none of the critiques of the large publishers that I've seen have done so. There are claims is that Elsevier and Taylor &amp; Francis, and possibly others, have used bundling (selling large numbers of titles as a group subscription) to inflate their margins. Some universities tackle this by subscribing journal-by-journal.
So yes, there are indications of oligopolistic practices that inflate prices and margins.
Is there a monopsony or oligopsony?
Well, those high margins would suggest not, and indeed, there are many many hundreds of competing universities each paying publishers on their own behalf, so the demand-side looks competitive. No, there is no oligopsony

Business models
There are three primary models of publishing business.
The first model is the open-access charity model, where everything is begged, borrowed or donated. So the costs are still there - and it's typically academics and universities paying - but the costs are concealed: effectively, the donators of resources are cross-subsidising the publishing, perhaps as an investment in reputation and/or impact. This model is very rare, because it's practically impossible to build a reputation from zero without any investment. Journals that I'm aware of that use this model, inherit reputation from predecessors that used one of the other two business models.
A second model - open access, author pays - is also along the lines of academia pays, readers from industry and commerce get the research for free, just like the open-access charity model. A large number of low-quality predatory journals are able to use this model, because of the pressure on many academics to &quot;publish or perish&quot;.
The third model, the traditional journal subscription model, is that only organisations and institutions who access the papers, pay. This is the only model where academia does not have to subsidise industrial and commercial access to research. Some low-quality predatory journals use this model, though less sucessfully than the open access-author pays model, because the subscription model has much less demand-side pressure. But this model is also how large-scale scientific publishing got established, and it's how reputations of most academics, editorial boards, weighty titles, and many conferences got established. This is the least fashionable and most successful model.