Thomas Nelson Inc.

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Thomas Nelson Inc.

Nelson Place at Elm Hill Pike
P.O. Box 141000
Nashville Tennessee 37214-1000
U.S.A.
(615) 889-9000

Public Company
Incorporated: 1961 as Royal Publishers Inc.
Sales: $265.1 million
Employees: 1,000
Stock Exchanges: New York
SICs: 2731 Book Publishing; 5112 Stationery and Office
Supplies

Thomas Nelson Inc. is the world’s largest publisher of Bibles and Bible-related materials. It also operates a large Christian music recording label, makes gift products, and runs several radio stations.

Thomas Nelson of Edinburgh, Scotland, founded Thomas Nelson and Sons when he published “The Pilgrim’s Progress” in 1798. His son perfected the rotary press in 1850, and in 1854 the firm opened a U.S. office in New York City. In 1885 it published an English revision of the Kind James Version of the Bible. In 1901 it published the American Standard Version of the Bible. With sales of the Bible central to its business, the firm built a Bible bindery in 1946 in Camden, New Jersey. In 1952 Thomas Nelson published a Revised Standard Version of the Bible.

A man important to the future of Thomas Nelson began selling Bibles door-to-door while studying economics at the University of South Carolina in the 1950s. A Christian Lebanese immigrant to the United States, Sam Moore went on to work at Chase Manhattan Bank for a couple of years. However, he left the bank to begin his own Bible-selling company called Royal Publishers, Inc. in Nashville in 1959. He raised capital and used it to buy Bibles and to hire college students whom he trained in door-to-door selling methods.

Once his firm expanded out of the Nashville area, Moore began publishing Bibles himself. In 1961 he took Royal public. The firm prospered and began to gain attention in the world of religious publishing. In 1969 a major opportunity presented itself when British interdenominational Bible publisher Thomas Nelson and Sons approached him about running its U.S. operations. Instead, Royal Publishing bought them. The $2.6 million purchase price included the Nelson name, its Bible printing plates, and its U.S. distribution network. The firm did not have a printing plant, and Moore continued his practice of contracting out print jobs.

The purchase of Thomas Nelson and Sons made Moore’s firm, now called Thomas Nelson, Inc., the largest Bible-publishing company in the United States. In 1976 the firm published the Bicentennial Almanac, which sold 600,000 copies at $20 each. In 1978 it built a new distribution center in Nashville. In the mid-1970s Moore spent $4 million having 150 scholars revise the Bible. In 1982 this revision project resulted in the New King James Version of the Bible, which sold so well that it made Thomas Nelson the largest Bible-publishing company in the world. Its principal market was a growing network of Christian bookstores throughout the United States.

In 1983 the firm won an important new author when Moore persuaded Robert H. Schuller, already known for his books and television preaching, to let Thomas Nelson publish his next book, Tough Times Never Last, but Tough People Do! Moore shuttled Schuller around on a private jet during a three-week book-signing tour, arranged for publicity in local papers, and helped the book become a bestseller. It eventually sold over 500,000 hardcover copies, many of them out of secular bookstores.

Also in 1983 Thomas Nelson bought a 240,000-square-foot bindery and printing press located near Kansas City, Kansas. Moore felt Thomas Nelson could print its own Bibles and increase its profits. Given its success in religious publishing, the firm decided to diversify into the secular publishing market as well. Nelson paid $2 million for New York publisher Dodd, Mead & Co., which owned the U.S. rights to Agatha Christie’s 67 mystery novels and other properties. Both of these acquisitions proved to be mistakes. The U.S. dollar soared in value in 1984 and 1985, making printing inexpensive overseas. Nelson’s competitors printed Bibles in Britain and the Far East and inundated the United States with Bibles selling at prices that Thomas Nelson could not match. In addition, the New York publishing business proved very different than publishing in Nashville, and Nelson management soon realized that they did not know how to succeed as a secular New York publisher. The firm lost $5.4 million in 1986 on sales of $72 million and amassed $40 million in debt.

The firm laid off about half of its work force of 600. It sold Dodd, Mead and its printing plant and went back to contracting out its printing. The moves saved the company, and by 1988 it was profitable again. It again looked to diversify, but this time it stayed closer to home. The firm realized that the Christian bookstores it sold its Bibles to made about half of their money from selling photo albums, prayer journals, and other gift items, as well as from cassettes of Christian music. Thomas Nelson quickly moved into these markets. Early tapes included Barbra Streisand singing Christmas carols and Johnny Cash reading the Bible. Although Nelson’s products were similar to those of its rivals, who had a head start in this market, the firm got its products into stores because of its relationships with the bookstores’ buyers—and because it offered steeper discounts than its competitors. Gift and music sales only totaled $1.4 million in 1989, but they quickly grew, reaching $8 million in 1990.

Thomas Nelson earned $4.3 million in 1990 on sales of $74 million. By 1991 the firm had sold more than 22 million copies of its New King James Version, and had reduced its debt to $12.5 million. In late 1992, Thomas Nelson bought Word, Inc., a gospel music and inspirational book publishing company previously owned by Capital Cities/ABC, for $72 million in cash. The purchase virtually doubled the size of the company. It strengthened Nelson’s music business by bringing it several successful singers, including Grammy winner Amy Grant. Nelson’s book business benefited from the addition of bestselling authors Billy Graham and Pat Robertson. Just as importantly, Word’s distribution complemented Nelson’s. Word sold well internationally and had a strong direct marketing presence. The purchase left the firm with only one serious competitor in Christian book publishing, Zonderban Publishing House, owned by Rupert Murdoch’s News Corp.

With “traditional values” and Christianity increasingly visible and powerful in the United States, Thomas Nelson felt it could now sell large numbers of its products in the mainstream mass market. Nelson had already gotten its King James Bibles into Wal-Mart and Kmart, and, with the acquisition of Word and the growth of Christian music, the firm was now able to get other products into the mass market. It began by convincing retailers to increase their offering of religious goods, such as Christian-themed children’s books and Bibles, during the Christmas season. When these offerings proved successful, the stores gradually added Christian pop music, card games, and calendars. In January 1995, Thomas Nelson began showing a 4.5 minute promotional video in 440 Sam’s Club stores. In it, Christian author and preacher Max Lucado advertised “A Time with God,” a book, audio, and video package containing Bible verses accompanied by music by Thomas Nelson’s music talent. This strategy proved successful; by 1995 Wal-Mart had expanded its Christian product line in 300 of its 2,100 stores.

Despite the pop-styling of most contemporary Christian music and the increased visibility of Christian issues in the United States, few mainstream radio stations would play Christian music. To get around this limit on its exposure, Thomas Nelson decided to build its own broadcast business. In 1994 it bought the Morningstar radio network in Texas, whose 39 stations had already been playing a lot of Christian music. Within a year, Thomas Nelson expanded the network to 105 affiliates and announced plans to enlarge it further. Perhaps aided by this radio exposure, consumer demand for Christian music continued to increase. In the mid-1990s, Blockbuster Entertainment Corp. stores doubled the shelf space they devoted to Christian cassettes and compact discs. By 1995, over a quarter of Christian music was sold through secular stores. Thomas Nelson hoped to sell half of its Christian music through secular retailers, though some industry analysts believed the genre would never achieve that kind of widespread popularity.

In 1994 Thomas Nelson bought Pretty Paper Inc. for 115,000 shares of common stock. Pretty Paper, which had sales of $5.6 million for 1993, became a wholly owned subsidiary. The purchase strengthened the company’s line of gift items and its gift-item distribution network. Among other products, Pretty brought two collections of gift stationery, “Out in the Country” and “Potting Shed,” both of which sold strongly. Thomas Nelson also sold gift products based on licensed cartoon characters from Looney Tunes and Paddington Bear.

With sales moving forward on all fronts, the firm made $11.7 million in 1995 on sales of $265.1 million. That year Nelson and Word published 11 books that made it to the top-20 Christian Booksellers Association Hardbound Bestsellers’ List, more than any other publisher. The growth of Christian publishing had created entire new genres, such as the Christian thriller, in which characters underwent personal transformations without the sex and violence found in most mainstream thrillers. In 1995, Word sold hundreds of thousands of copies of such books by Pat Robertson and Charles Colson.

Thomas Nelson founded a new division called Royal Media, which included the Morningstar Radio Network and the Royal Magazine Group. The magazine group published four magazines: Aspire, which covered lifestyle issues and celebrities and was sold on newsstands; A Better Tomorrow, which was geared toward older readers; Release, which covered Christian recording artists and targeted those working in the Christian music industry; and Release Ink, which did the same for the Christian book industry. The Morningstar Radio Network had grown to 138 stations in 130 cities. Its digital programming was delivered by satellite 24 hours a day and consisted of two programming formats: adult contemporary Christian music and what the firm called “High Country.” Nelson announced that it was considering a move into cable TV as well.

The firm’s record and music division continued to expand, reaching sales of $89.7 million in 1995. Thomas Nelson acquired the Marantha! Music catalog of printed and recorded music products and signed a long-term agreement with Marantha covering future product development. Marantha specialized in a sub-genre called “praise and worship music” in which Thomas Nelson formerly had a weak presence. Despite its successful diversifications, Thomas Nelson continued to depend on the Bible as the mainstay of the company’s offerings; in 1995 Thomas Nelson published more than 1,200 different Bibles and Bible-related products.