ALPHARETTA, Ga. (BP)–North American Mission Board trustees voted unanimously Aug. 13 to convert the FamilyNet television network from a nonprofit to a for-profit subsidiary in an effort to allow the network to reach a greater level of national impact.
The reorganization plan was adopted during a called meeting of trustees, many of whom participated by teleconference. The plan will next be submitted to the Southern Baptist Convention Executive Committee for approval.
NAMB President Robert E. Reccord said the move will make FamilyNet “the voice of mainline evangelical Christianity in America via television.”
“This is a wonderful, fabulous opportunity to get evangelical doctrine out across America and around the world,” said Ed Young, pastor of Second Baptist Church in Houston and a member of FamilyNet’s board of directors — which approved the plan a day earlier. ” This may be the most historic turnaround in our denomination that we have had.”
The new for-profit FamilyNet would be formed from three existing NAMB subsidiaries: FamilyNet, a nonprofit entity; TimeRite Agency, a for-profit advertising subsidiary; and DFW Uplink, a nonprofit subsidiary that includes satellite transmission operations.
The reorganization plan was developed after an extensive process required by the Internal Revenue Service anytime a nonprofit organization decides to create a for-profit entity, said Randy Singer, NAMB’s executive vice president. The constituencies of both FamilyNet and NAMB — apart from the boards of the two agencies — were represented by a “Fairness Committee” to ensure that each side was treated fairly.
Reccord told trustees the decision to take make FamilyNet a for-profit entity stems from the limited funding potential available to the network as a nonprofit entity.
The question of how Southern Baptists could use television broadcasting effectively has been an issue since the late 1970s, when the former ACTS network was launched. At that time, he said, leaders were told by a leading Christian broadcaster that an investment of about $35 million was needed for the effort to “make a significant impact” in Christian broadcasting. Today FamilyNet receives about $6 million annually for operations through NAMB’s budget and generates about $3 million in advertising revenue — resulting in a net annual subsidy of about $3 million.
Reccord said that while FamilyNet and its predecessors have been successful as a ministry venture, they have not succeeded in reaching the vast majority of Americans because of the lack of capital.
“In order to be significant contributors in the area of media in America, Southern Baptists — while having all the desire and the intent — have not been able to do what a national television network ought to do,” Reccord told trustees.
The broadcasting issue was a key focus of the Covenant for a New Century restructuring that resulted in NAMB’s founding in 1997, said Reccord, who served as chairman of the group. When the former Radio and Television Commission was included as part of NAMB, members of the SBC’s Implementation Task Force decided that “at the end of five years there would be a determination of what it would take to make the North American Mission Board’s television network a presence in Christian media in America.”
Viability in the television industry, Reccord said, hinges on distribution. A potential audience of 30 million homes, he said, is generally considered the break-even point for a national network. But while FamilyNet has made significant gains over the past five years, it currently has an around-the-clock presence in only 2.9 million households. Most of its 165 affiliates are low-power stations, resulting in spotty coverage not accessible by the majority of the nation.
Today, however, FamilyNet is better positioned than ever before to “break through to the next level,” Reccord said. One of NAMB’s first steps was to hire David Clark, a former vice president for the Christian Broadcasting Network, to serve as vice president for NAMB’s broadcast communications group and president of FamilyNet. Key leaders in the industry have also been added to the FamilyNet board to shepherd its growth.
Under their leadership, the board has significantly boosted distribution outlets — and is anticipating significant distribution contracts that will expand the potential audience. Original programming also has been bolstered, with such hits as “At Home — Live!,” “The Call” and two shows planned for the fall — the “TruthQuest: California” reality-based series and a new children’s program starring former gymnast Mary Lou Retton.
NAMB leaders believe the new for-profit entity could draw potential investors that could help the agency bolster programming, distribution and marketing efforts to the point that the audience of 30 million would be within reach.
“I believe FamilyNet is now ready to become for-profit. There are investors who are interested in partnering with us to take this to the next level,” Singer, NAMB’s executive vice president, said. “Someone asked at the [NAMB] executive committee meeting, ‘Why didn’t you do this before?’ The answer is, we weren’t ready before. Three years ago, no one was interested in this network.”
In one indication of the potential for growth, Reccord cited statistics that show Christian broadcasting is viable as a ministry to unbelievers and Christians alike. A recent George Barna survey found that 43 percent of all unchurched adults had watched Christian television in the past month, Reccord said, and 78 percent of Christians said that Christian television was used to augment their walk with Christ.
Trustees were given a five-page list of guidelines that would govern the relationship with potential investors that gives NAMB strong controls over content and direction.
Among the provisions:
— NAMB would retain majority ownership and accompanying representation on the new FamilyNet’s board of directors and would have controlling influence over placement or continuation of any “religious” programming, programming decisions that touch on doctrinal or theological matters, and veto power over any change in mission, strategic direction and/or values of the network.
— Any partners would be required to acknowledge agreement with doctrinal guidelines and pledge that programming decisions would be in accordance with the guidelines. Additionally, all directors elected by NAMB would be required to carry out their duties in accordance with the Baptist Faith and Message statement of Southern Baptist beliefs.
— In the event disagreements arise that cannot be resolved, the partnership would be dissolved and partners would retain the assets they contributed initially.
— NAMB would retain ownership of all radio programming, rights to produce television specials under existing agreements for major network affiliates, and the FamilyNet programs “At Home — Live!” and “The Call.” The agency also would retain rights to at least half of all ministry time available for sale on Sundays, two one-hour slots each weekday for broadcast of “At Home — Live!” and four hours of prime-time programming weekly.
Reccord said that while investment partners can be of great help, NAMB also retains a financial responsibility to see that the needed improvements are made. The agency has guaranteed funding of $9 million over the next three years, which would be financed as a loan at the prevailing prime interest rate.
Even if there ultimately are no investors, Reccord told trustees he still believes the move is important.
“We’ve either got to get serious and get to the next level, or we have to start asking questions of Southern Baptists,” he said. “We can’t keep on spinning this wheel. If we’re not going to do it, then let’s go ahead and ask the question, ‘When are we going to get out of it?’ Those are the options that we’re facing”
And while the venture carries no guarantees, Reccord said that he, Singer, and Clark each asked themselves whether they would be willing to take the personal risk of joining the new organization if that was the direction God led. And while it is likely that only Clark will be asked by trustees to make that commitment, the answer of all three was “yes.”
“I think it’s got to have that kind of commitment coming from your leadership, or we’re just blowing smoke in the wind,” Reccord told trustees.
Singer said he believes the move also will be received positively by FamilyNet’s current 163 affiliates, many of who are primarily low-power stations that have carried SBC programming for years. “For our affiliates and their viewers, this could mean a whole new level of quality programming,” he said.
Trustees responded with affirmation to the plan, each voting in favor during a roll-call vote with no abstentions.
“This was the most exciting board meeting that I ever have attended,” said trustee chairman Terry Fox of Wichita, Kan. “The questions that were raised by the trustees were answered thoroughly, and we received a unanimous vote. This is truly an exciting day for Southern Baptists, and I am most thankful for the leadership of Dr. Bob Reccord as he has given vision to us in this very vital area.”
“I’m all for it,” said Al Kawamoto, a trustee from Arlington, Texas. “We’re finally letting the bird out of the cage that was meant to fly.”