Christian Publisher Says Chapter on Its Woes Is Closed

It’s been a stormy four years for the Zondervan Corp., beleaguered by securities law violations, hostile takeover attempts, lawsuits and almost two years on the selling block.

But the Christian book publishing company is closing that tumultuous chapter and looking forward to a bright future, unconcerned about the less-than-holy reputation of its new owner--media mogul Rupert Murdoch.

“Through it all, there’s been a remarkable calm on the part of our people,” said James Buick, Zondervan president and chief executive officer. “Part of it is that their confidence in God transcends their concern about external problems.”

The company, a leading publisher and retailer of Bibles and evangelical Christian books and music, began facing those external problems after it posted net losses for the first time in 1984-85. The losses were revealed in an investigation by the Securities and Exchange Commission, prompting lawsuits and, finally, a takeover attempt by disgruntled shareholders in 1986.

The company struck a deal with the shareholders in October, 1986, and agreed to find a buyer.

It took 18 months before potential buyers began to surface, and last month the 650-employee company accepted a $57-million offer from Harper & Row Publishers Inc., a unit of Murdoch’s publishing and media empire. The merger was finalized Sept. 1.

“I think one of the reasons it took so long (to find a buyer) was because we were seen as being shopworn,” Buick said.

Throughout the ordeal, the company faced criticism for putting its evangelical mission of spreading the Gospel before its responsibility to shareholders. The company first began issuing public stock in 1976.

British financier Christopher Moran, who led the takeover attempt, insisted that shareholder value should be the first priority for Zondervan, which he believed was neglecting the opportunity to fully profit from the growth of “born-again” Christianity in the United States. As he put it then: “It’s a company, not a church.”

Zondervan officials cringed at some of Moran’s suggestions, including one that the company’s 86 Christian bookstores keep their doors open on Sunday. The company held emergency prayer sessions to ask for protection from the outsiders trying to gain control.

Up until the week before the merger, Zondervan was fending off a federal lawsuit filed by a shareholder who claimed that company officials failed to get the best price for the company.

“I think people pretty much committed it to God’s wisdom,” Hilda DeVries, personnel manager for about 10 years, said last week of the turbulent time.

Company officials insisted throughout that Zondervan’s independence was the key to maintaining its primary corporate mission of spreading the Gospel, thereby effectively tapping the Christian market.

But with a new owner, the question of Zondervan’s independence is resurfacing.

When Zondervan announced it would accept Harper & Row’s offer, a small Christian publishing company in Nashville, Tenn., that had bid on the company expressed concern.

“We’re not talking about marketing niches here,” Robert Wolgemuth of Wolgemuth and Hyatt Inc. told the Grand Rapids Press in July. “What we have here is the most important Christian publishing company in the world falling into the hands of Rupert Murdoch.”

But Buick said Murdoch’s reputation, built on tabloid newspapers he publishes that feature scantily clad women and sensational headlines, is the result of his policies of editorial freedom, which makes him an attractive owner for Zondervan.

“Mr. Murdoch is basically a publishing businessman who chooses not to interfere with decisions made by his editorial people,” Buick said. “So in a sense, the very criticism that’s being leveled against him would tend to indicate he follows the principles that would give us the very independence we need.”

One of the founders of the company, P.J. Zondervan, questions that logic.

“I’m worried they might have different ideas for the company,” said Zondervan, 79, who retired several years ago from the company he founded with his brother in Grand Rapids in 1931. “I’m concerned about the future,” he said, but declined to elaborate.

Though Harper & Row’s San Francisco-based religious publishing division describes itself as an eclectic publisher whose titles cater to a variety of religions, the company has promised to keep Zondervan separate with its headquarters remaining in Grand Rapids and current management in control of editorial content and operations.

Zondervan clearly places enormous value on the ability to maintain its unique corporate identity. Employees gather for half an hour each week in the lunchroom for Bible services, complete with guest speakers and an organist, and many employees choose to go to Bible study sessions after work.

Within the industry, Zondervan’s merger with the giant publishing company is seen as a plus. For 1987, the company showed a profit of $859,000 on sales of $105.7 million.

“Zondervan should be able to substantially increase their distribution now,” said Fred Anschel, a senior analyst at Dean Witter Reynolds Inc. “They’ve been so preoccupied with fighting off various takeover situations that this is positive in that now they can concentrate on running a business.”