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Constituency meetings of Review and Herald and Pacific Press clear the way for the implementation of the biggest restructuring in Adventist publishing’s 153-year history.
By Andrew McChesney, News editor, Adventist Review | NAD Communication Staff
Constituency meetings of the two corporations, held consecutively on Tuesday at the denomination’s world headquarters in Silver Spring, Maryland, voted 153-66 (Review and Herald) and 42-1 (Pacific Press) in favor of the restructuring.
Following the restructuring vote, the constitution and bylaws of each corporate entity were amended to reflect the changed structure. A minimum vote of two-thirds was required to amend the documents of each corporation, and Tuesday’s decisions were the last step needed to launch the plan to build Pacific Press into a market-sensitive publisher capable of holding its own at a time when readers increasingly turn to smartphones and tablets rather than books and magazines for information.
The General Conference Executive Committee had previously endorsed the restructuring together with the church’s North American Division, or NAD. Operating boards of both Review and Herald and Pacific Press voted to recommend the plan to each constituency during their respective board meetings held on May 8. Under the plan, the expanded Pacific Press will become an institution of the NAD.
“The General Conference wants the greatest expansion of publishing work in the North American Division and will be praying that this new restructured approach will be blessed by God in its outreach to the vast public in the NAD territory,” said world church President Ted N.C. Wilson.
Wilson urged church members to rally “to the great opportunity of sharing Adventist evangelistic and nurturing materials in both printed and digital form as we anticipate Christ’s soon return.”
Why Revamp Is Needed
Under the restructuring, the financially troubled Review and Herald Publishing Association will unwind operations at its 80-acre facility in Hagerstown, Maryland, in a process that could take several months to accomplish.
Some employees and assets may be transferred to the Nampa, Idaho-based Pacific Press Publishing Association, which will become the North American Division’s major institution with its own printing facilities. Unneeded Review and Herald equipment and property will be sold, with the proceeds going to Pacific Press to help strengthen the print operations by allowing presses to run multiple shifts, making the print production more cost effective. The income will also bolster its mandate to develop e-books, apps and other forms of digital media.
“If we won’t invest in the digital world, we will be left in the same spot as Kodak, which invented the digital camera but refused to embrace changing realities and now is virtually gone," said Robert Lemon, General Conference treasurer and a board member at both Review and Herald and Pacific Press.
Eastman Kodak, the century-long leader in photographic film, invented the digital camera in 1975 but failed to keep up with a rapid shift toward digital photography in the late 1990s. It filed for bankruptcy in 2012.
“We believe there is a tremendous future for publishing, but not necessarily for printing,” Lemon said by telephone ahead of Tuesday’s vote.
A Shift in Reading Patterns
No one disputes that people like to read. The question is how they read today compared to a decade ago, when books and magazines dominated the world just as they had done since the days when early Adventist leaders started the Review and Herald, the church’s first institution, in 1861.
Rather than relying on a handful of weekly or monthly church publications to stay informed, Adventists nowadays can get information instantly though various news websites and blogs, and from Adventist-owned television stations like the Hope Channel that have a world-wide presence.
|GC Treasurer Robert Lemon, discusses the financial developments of the Review and Herald Press. ©2014 North American Division Photo by Daniel Weber/NAD
Lemon is not alone. In one example, the Moscow International Church in Russia recently canceled its annual subscription for English-language Sabbath school guides from Pacific Press. The reason for ditching the once-coveted 25 guides: Class members took a poll and found that everyone was using downloaded lessons on smartphones and tablets.
Sales of Adventist Books Tumble
The shift in the general reading patterns of the public and a societal trend toward digital media have hurt the sales of Adventist publications, and church leaders have expressed fears that both Pacific Press and the Review and Herald would fold without a major restructuring. Consumers now get their news primarily from digital and broadcast media, delivered on a variety of platforms, and trade journals report that fewer print books are being produced and read.
Measured in 2013 dollars, Review and Herald’s revenue dropped from $45.8 million in 1985 to $21.8 million last year, while its workforce shrank from 315 full-time employees to 112 today. At Pacific Press, revenue slid from $47.7 million in 1985 to $17 million last year, and its headcount more than halved from 210 full-time employees in 1985 to 99 today.
But those figures, provided by the publishing houses to the General Conference, reveal only a partial picture. Since 2000, Review and Herald has posted a loss every year except in 2011 and 2012. In 2011, it sold 46 acres of land for $11.5 million to the General Conference to pay off debt, and in both 2011 and 2012 received significant orders forGreat Controversy books. In 2013, however, the company reported an operating loss of $1 million, and statements issued to the Review and Herald board through April 2014 showed a year-to-date loss of nearly $965,000.
Pacific Press, meanwhile, has shown profits every year since 2000 except in 2008, when it lost investments amid the U.S. financial crisis. The company’s long-term performance stability has left it with $25 million in cash and investments today.
“The bottom line is that over the last 28 years both organizations have experienced multiple changes in leaderships — presidents, vice presidents and board leadership — and have faced the same challenges of declining sales and deteriorating distribution systems,” Lemon said. “But somehow with the corporate culture at the Pacific Press, they have managed to remain profitable, while the Review and Herald has had more years of loss than gains and especially during the last 10 years.”
Lemon stressed, however, that even Pacific Press, founded in 1875, needs the restructuring because the publishing business both in and outside the church is “declining, declining, declining.”
The emergence of digital media also poses a challenge to distribution. Traditional methods of distributing Adventist publications through Adventist Book Center stores and literature evangelists are no longer viable, at least in the U.S., Lemon said. Bookstores are scrambling to survive, as evidenced by the financial struggles of major retailers like Borders and Barnes & Noble, while the distribution system for books has gotten so efficient that it’s nearly impossible to earn a living selling books door-to-door, he said.
The average Adventist-published book sells 4,000 to 5,000 copies over its sales run, he said.
The Role of Pacific Press
|GC President Ted N.C. Wilson, addresses the Constituency Board Meeting of the Pacific Press Publishing Association, as it votes to approve the merger of the operations of the Review and Herald Publishing Association and the Pacific Press Publishing Assoc. ©2014 North American Division of Seventh-day Adventists Photo by Daniel Weber/NAD|
“I probably have more questions in my mind than I have answers,” Dale Galusha, president of Pacific Press, said in a recent telephone conversation from his office in Nampa.
He said Pacific Press would only decide which assets it might absorb and how many staff it might need once the North American Division determined which product lines it wanted to support.
But Galusha vowed that Pacific Press would honor all Review and Herald magazine contracts, including Message, Insight, and Guide. “We will make sure that promises are fulfilled,” he said.
Pacific Press’ digital strategy also remains in the early stages, but the company will be expected to add to its line-up some of the 30-40 book titles that Review and Herald published every year.
Concerns at Review and Herald
Perhaps understandably, Review and Herald President Mark Thomas is not thrilled with the imminent changes.
“I see this as a plan worked out by people with reasonable business concerns. They see a way to increase efficiency by combining two underutilized printing operations at one facility,” Thomas said in an e-mailed response to questions. “I consider myself a businessman, and I understand that part of the plan.
“Obviously, I wish they would choose our plant for the printing work for personal reasons. But there are also good business reasons to centralize printing work in Maryland,” Thomas said, citing the company’s location at a major U.S. shipping hub as a way to lower shipping costs.
He also expressed concerns that the centralization of the development and marketing of products in the U.S. would “deeply wound” Adventist publishing. As an example, he noted that Pacific Press delighted readers by picking up theChristmas in My Heart book series after the Review and Herald stopped publishing it. Likewise, he said, Review and Herald developed a "MagaBook" product line — which has put thousands of student literature evangelists through school over the years — after the concept was turned down by Pacific Press.
“We and Pacific Press are like Apple and Samsung phones,” Thomas said. “We give people a choice. We drive each other to do better work.”
General Conference as a Publishing House
|Ken Mittleider, former GC vice president, addresses concerns during the discussion of the merger of the operations of the Review and Herald Publishing Assoc. and the Pacific Press Publishing Assoc. ©2014 North American Division of Seventh-day Adventists Photo by Daniel Weber/NAD
The General Conference, which allowed Pacific Press and Review and Herald to operate as stand-alone businesses without direct financial assistance, has acted as an unofficial publishing house without its own presses for years. It employs an editorial staff of 40 to 50 people who manage a variety of publications, including Adventist Review, Adventist World, KidsView, Ministry, Journal of Adventist Education, Elders’ Digest, the Sabbath School study guides, and materials for the church’s Biblical Research Institute.
Even though writings by Adventist church co-founder Ellen White are printed by both Pacific Press and Review and Herald, their publisher is the Ellen G. White Estate, an entity closely associated with the General Conference.
Delbert Baker, chairman of the Review and Herald and a General Conference vice president, underscored that the Review and Herald would continue its ministry, albeit at a different location and, without its printing presses, with a different focus.
“A most encouraging reality is that the RHPA will continue its historic publishing mission at the General Conference headquarters uninterrupted,” he said. “A most painful aspect of this process is the phasing out of the Hagerstown facility and the impact it has had on the dedicated RHPA employees.”
He said much thought and care was going into the plans to care for the affected employees at Review and Herald, also known by its acronym, RHPA.
“We can thank God and everyone involved for the committed effort that has been invested to make the transition for the RHPA employees as manageable as possible,” he said.
The Need to Restructure
The restructuring was a long time in coming. Church leaders have discussed a restructuring that would give the North American Division more control over the publishing houses for the past 15 years. Of the church’s 13 world divisions, North America is the only one that does not have a publishing house as part of its institutions. The reason is historical: The General Conference oversaw both the world church and the North American region itself from its establishment in 1863 until it formed the North American Division in 1990.
The restructuring is something of a Plan B for the General Conference and North American Division. A task force formed in the summer of 2013 to study a possible merger of the two publishing houses did not bring a recommendation in light of questions about how Ellen White’s writings should guide the current relationship of the two houses. Ellen White had counseled against consolidating the two publishing houses in the late 1800s. Church officials say the latest plan honors the principles of White’s counsel because it is a merger of the printing operations, not a merger of the publishing or editorial operations.
In any case, the current Review and Herald itself was the product of a merger. The debt-laden Southern Publishing Association based in Nashville, Tennessee, was folded into the Review and Herald in 1980.
Bill Knott, the editor-in-chief and executive publisher of Adventist Review and Adventist World, which together account for nearly 25 percent of Review and Herald’s annual gross sales, expressed concern for the Review and Herald personnel, even as he said he looked forward to a new era of Adventist publishing after the latest restructuring.
“The sense of loss is palpable for all of us who have grown up with Review and Herald-published products, including the Adventist Review,” said Knott, who also is a member of the Review and Herald board.
“The editorial team of Adventist Review and, more recently, Adventist World, has enjoyed a very close working relationship with Review and Herald that goes back more than 150 years,” he said. “The enormous contribution made by the men and women in that working relationship will never fully be known until we hear the fuller story some day in heaven.”
He said Adventist Review and Adventist World expects to work as closely with Pacific Press as they had with Review and Herald.
“At the end of the day, it’s our mission that we must focus on, and that mission reminds us that we must always adapt our methods to bring the three angel’s messages to the attention of the millions who don’t know Jesus,” he said.
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