With Goal of Repositioning Its Media, Adventist Church Overhauls North American Publishing Operations

The Review and Herald and the Pacific Press publishing
houses have approved the biggest restructuring in Adventist publishing’s
153-year history, embracing a plan that Adventist leaders hope will strengthen
the church’s U.S. digital presence and ensure the long-term viability of its
publishing work.

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.

PRESIDENT SPEAKS: Adventist world church leader Ted N. C. Wilson, pictured at a Review and Herald meeting on Tuesday, June 17, 2014, said in an interview that the General Conference leadership "will be praying that this new restructured approach will be blessed by God in its outreach to the vast public in the NAD territory." PHOTOS: A. Oliver/ANN

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

the restructuring, the financially troubled Review and Herald Publishing
Association will unwind
operations at its 83-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.

GC Treasurer Robert Lemon

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.

“It’s the same with many other things,” Lemon said. “I get a
hard copy of the Sabbath school study guide at home, but I use the app on my
iPhone. I have all of Ellen White’s books in my library, but I seldom go to any
of them for reading other than The Great
Controversy, Desire of Ages
or Steps
to Christ
. I look up everything on my iPhone.”

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.

GC undertreasurer Juan Prestol chairs the RHPA finance committee.

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 for Great
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

The average Adventist-published book sells 4,000 to 5,000
copies over its sales run, he said.

The Role of Pacific Press

PPPA President Dale Galusha

How many Review and Herald employees may be offered jobs at
Pacific Press and which product lines may be moved there are among the issues
that the North American Division and Pacific Press will need to tackle in the
coming weeks.

“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.

See more about each
publishing house’s advantages in the sidebar “5 Strengths of Each Publishing

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 the Christmas 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

Under the restructuring, Pacific Press became an
institution of the North American Division following the June 17 vote, while the General
Conference will retain a constituency structure for the Review and Herald, as one of its institutions whose scaled-down operations will
move to its headquarters in Silver Spring, Maryland, a 90-minute drive from its
current site.

See more details about
the restructuring in the sidebar “
Highlights of Restructuring

The constituency sessions were bathed in prayer.

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

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

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.

NAD President Daniel Jackson

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.

Read more on the Ellen
White debate in the sidebar “
How Restructuring Plan Aligns
with Ellen White’s Advice.”

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
and, more recently, Adventist
, 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
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.

Contact Adventist
Review news editor Andrew McChesney at [email protected].
Twitter: @ARMcChesney