by Monte Sahlin

From an Official Release, June 17, 2014
Update added at the end of the story on June 18
The biggest change in more than 150 years was voted by the two original publishing houses operated by the Seventh-day Adventist denomination in parallel constituency meetings today. The changes were necessary to avoid bankruptcy and it is hoped by denominational leaders will strengthen “the digital presence” of the Adventist faith in the United States, according to an official release written by Andrew McChesney, the recently arrived news editor of the Adventist Review. Mark Kellner, who has served in that role for a number of years, is now a reporter for The Deseret News daily newspaper in Salt Lake City (Utah).
Both meetings were held at the denomination’s headquarters in Silver Spring, Maryland. The delegates to the constituency meeting of the Review & Herald Publishing Association (R&H), the original Adventist institution started by James White in 1861 before the denomination was  organized, voted 153 to 66 to adopt changes that essentially end its existence. The delegates to the constituency meeting of the Pacific Press Publishing Association voted 42 to 1 to adopt changes that make it an institution of the denomination’s North American Division (NAD) instead of the General Conference (GC).
“I believe that God led the deliberations that took place today,” Pastor Daniel Jackson, NAD president, was quoted in the release. “We believe this is an opportunity for the Adventist Church in North America. This is God’s providence, and by His grace we will utilize it to His glory.”
Following the vote on the reorganization plan in each meeting, the constitution and bylaws of each corporation were amended to implement the changed structure. Each of these votes required at least a two-thirds majority, which was achieved. These were the final steps in a controversial plan that has been discussed for years. The goal is “to build Pacific Press into a market-sensitive publisher capable of holding its own” at a time when readers increasingly turn to the Internet and related mobile devices instead of traditional paper and ink products.
The GC governing body had previously approved the plan as had the boards of each of the institutions. The changes are necessary because R&H is essentially bankrupt after repeated efforts on the part of the GC to pump cash into it. It will “unwind operations” on its 80-acre campus built in Hagerstown, Maryland, in the early 1980s when Southern Publishing Association was closed down in Nashville (Tennessee) and folded into R&H.
Some employees and assets may be transferred to the Pacific Press in a suburb of Boise, Idaho. Pacific Press will become “the … major institution” of the NAD with its own printing facilities. Unneeded R&H equipment and property will be sold, with the proceeds going to Pacific Press to build the capacity for the printing operations to run multiple shifts, “making production more cost effective.” It also has a mandate to develop E-books, apps and other digital products.
“If we don’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, the GC treasurer who has served as a board member for both R&H 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 was quoted in the official release.
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 the Adventist movement began in the mid-19th century.
Rather than relying on a handful of weekly or monthly church publications delivered by the post office to stay informed, Adventists nowadays can get information instantly though various news web sites, including Adventist Today. There is also regular news on the denomination’s Hope Channel that has a global reach via satellites and cable television. There are also several independent television channels operated by Adventists and scores of radio stations around the world, including one in Washington DC that has the largest listening audience of any religious broadcaster in the U.S. capital.
“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 … I look up everything on my iPhone.”
Lemon is not alone. In one example cited in the official release by McChesney, who until recently worked for a secular news organization in Russia, the Moscow International Church recently canceled its annual subscription for English-language Sabbath school materials. The reason; class members took a poll and found that everyone was using downloaded lessons on their smart phones and computers.
The shift in technology and reading patterns has hurt the sales of Adventist publications, and denominational leaders feared that both Pacific Press and R&H would fold without major changes. R&H’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 staff more than halved from 210 full-time employees in 1985 to 99 today.
But those figures reveal only a partial picture. Since 2000, R&H has posted a loss every year except in 2011 and 2012 when the GC purchased 46 acres of undeveloped land on its campus for $11.5 million. In 2013, however, R&H reported an operating loss of $1 million, and statements issued to the R&H board through April this year showed that losses had already come to $965,000 in 2014.
Pacific Press, meanwhile, has shown profits every year since 2000 except in 2008, when it lost investment income amid the U.S. financial crisis. The long-term performance stability of the publishing house has left it with $25 million in working capital today.
“The bottom line is that over the last 28 years both organizations have experienced multiple changes in leadership … and … 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 needs the restructuring because the publishing industry is “declining, declining, declining.”
The emergence of digital media also poses a challenge to distribution. Traditional methods of distributing Adventist publications through denominational book stores and Literature Evangelists are no longer viable, at least in the U.S., Lemon said. Book stores of all kinds 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 has become impossible to earn a living selling books door‐to-door, he pointed out. The average book published by an Adventist publisher in the U.S. sells only 4,000 to 5,000 copies over its lifespan, he said.
How many R&H employees may be offered jobs at Pacific Press and which product lines may be moved there are among the issues that the NAD will need to decide in the coming weeks. “I probably have more questions in my mind than I have answers,” Dale Galusha, president of Pacific Press, told McChesney. He said Pacific Press would only decide which assets it might absorb and how many staff it might need once the NAD determined which product lines it wanted to support. Galusha vowed that Pacific Press would honor all R&H magazine contracts, including Message, Insight, and Guide. “We will make sure that promises are fulfilled,” he said. What kind of digital strategy Pacific Press will pursue also remains in the early stages, but the company will be expected to add to its line-up some of the 30 to 40 book titles that R&H has published each year.
Mark Thomas, R&H president, is not thrilled with the imminent changes, including the loss of his position. “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 told McChesney. “I consider myself a businessman, and I understand that part of the plan.”
He also expressed concerns that the consolidation of product development from the two publishers would “deeply wound” Adventist output. As an example, he noted that Pacific Press delighted readers by picking up the Christmas in My Heart book series after R&H stopped publishing it. Likewise, he said, R&H developed the "MagaBook" products which thousands of Adventist students sell to earn funds to pay for school 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.”
With the reorganization Pacific Press became an NAD institution while the GC retains the R&H whose scaled-down operations will move to the GC office in Silver Spring and operate as an in-house unit. The GC had allowed R&H and Pacific Press to operate as stand-alone businesses without direct financial assistance, while it has acted as an unofficial publishing house without its own presses for many years. The GC employs an editorial staff of 40 to 50 people who manage a variety of publications, including the Adventist Review, Adventist World, KidsView, Ministry, Journal of Adventist Education, Elders’ Digest, the Sabbath School study guides and materials from the Biblical Research Institute. Even though books by Ellen White, the denomination’s cofounder and most widely-read author, have been printed by both Pacific Press and R&H, their publisher is actually the Ellen G. White Estate, an entity closely associated with the GC.
Pastor Delbert Baker, chairman of the board for R&H and a GC vice president, underscored that R&H would continue its ministry, albeit at a different location, with a different focus and without printing presses. “A most encouraging reality is that the R&H will continue its historic publishing mission at the GC uninterrupted,” he said. The “most painful aspect of this process is the phasing out of the Hagerstown facility and the impact it has had on the dedicated employees.”
Baker said much thought and care was going into the plans to care for the employees scheduled to be paid off. “We can thank God and everyone involved for the committed effort that has been invested to make the transition for the [the] employees as manageable as possible,” he said.
The restructuring was a long time in coming. Denominational leaders have discussed restructuring along the lines voted today for the past 15 years. Of the church’s 13 world divisions, NAD is the only one that does not have a publishing house among its institutions. The reason is history and the failure to quickly adapt in past years. The GC functioned in the role of the NAD from its establishment in 1863 until it formed an NAD organization in the 1980s.
Today’s restructuring of the publishing houses is something of a Plan B for the denomination. A task force formed in the summer of 2013 to study a possible merger of the two publishing houses did not bring a recommendation because controversy broke out about recommendations made by Ellen White in the late 1800s. She had advocated against consolidating the two publishing houses, urging a diversity of views and materials. 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. There are also scores of Adventist publishers today around the world and many independent Adventist publishers which did not exist a century ago.
Bill Knott, the editor-in-chief of both the Adventist Review and Adventist World, which together account for nearly 25 percent of R&H annual gross sales, expressed concern for the employees, even as he said he looked forward to a new era of Adventist publishing with the reorganization. “The sense of loss is palpable for all of us who have grown up with Review and Herald products, including the Adventist Review,” said Knott, who also is a member of the R&H board. “The editorial team … has enjoyed a very close working relationship with Review and Herald that goes back more than 150 years. 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 editors expect to work as closely with Pacific Press as they had with R&H. “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.
On June 18, the following additional statement was released by a denominational spokesman:

The document describing the reorganization plan contains the following explanation of how the restructuring is in line with advice offered by Ellen White:

“In large measure the success of the publishing work in the Seventh-day Adventist Church has come from the inspired counsels and visionary advocacy of Ellen G. White. Though other publishing houses came into existence during her lifetime, she had extensive personal experience with, and provided specific counsels to, the two publishing houses in the United States—Review and Herald and Pacific Press. These publishing houses had enormous influence in the overall publishing ministry of the church. Many of her messages to these institutions came during a period marked by tension between the two. Less than cordial relations prevailed and there was talk of “take over” and “consolidation” of all publishing operations at Battle Creek, Michigan. Ellen G. White strongly objected to such plans and gave pointed messages about the danger of centralizing control of the denomination’s publishing work in one institution.

Ever since those days, Ellen G. White’s counsel (i.e. that there should be more than one publishing house) has informed subsequent discussions about the publishing ministry structure in North America. In addition to extremely valuable insights on the role of the publishing work in the mission of the church, Ellen G. White underscored principles that should inform the establishment and operation of publishing institutions serving the church. These include:

1. Large institutional concentrations in one locale are not the best way for the church to fulfill its mission. (Much of what she wrote on this subject was written prior to the major denominational reorganization in 1901 and can be more fully understood in the context of pre-1901 organizational realities and tensions.)

2. No single individual or small group of individuals should have sole determination of the content or expression of denominational beliefs and teachings. A single publishing house for the entire denomination was not to be seen as God’s plan.

3. Ellen G. White recognized a fundamental hermeneutical principle in the use of her writings. “Regarding the testimonies, nothing is ignored; nothing is cast aside; but time and place must be considered.”* Changed circumstances call for ‘common sense’ application of principles.

In this light, the proposal to restructure the relationship of these institutions should be viewed as fully respecting the counsel of Ellen G. White in regards to the publishing work and the obligation to apply reason and common sense in regard to time, place and circumstances. The restructuring that is now under consideration preserves two distinct publishing houses, rearranges the actual printing and production operations for efficiency and economy, and provides more direct involvement of the North American Division in organizing the publishing ministry for mission objectives in its territory. (Ellen G White, Selected Messages, Volume 1, Chapter 4)