Donruss Playoff L.P. Business Information, Profile, and History

Company Perspectives:

Now making a name for itself with several innovative autograph and memorabilia insert programs, Donruss maintains it's standing as a company renowned for heritage and innovation.

History of Donruss Playoff L.P.

Donruss Playoff L.P. makes trading cards that depict the players of Major League Baseball and the National Football League, as well as some performers from other sports organizations or television programs. The company markets a number of different series each year under the Donruss, Playoff, Leaf, and Score brands, primarily distributing them in the United States through card collectors' hobby shops and mass-marketers like Toys "R" Us. Donruss Playoff's ownership is controlled by Ann Blake, who co-founded Score in the 1980s.

Beginnings

Donruss Playoff traces its roots to 1954, when Donald and Russell Weiner became owners of the Thomas Weiner Company of Memphis, Tennessee, which manufactured hard candy, suckers, and a brand of gum called Super Bubble. They renamed the firm Donruss, using a combination of their first names, and continued to produce a variety of candy and gum products. In the early 1960s, the company began to issue sets of trading cards, one of the first of which was "Idiot Cards" from 1961, which featured cartoons and jokes aimed at the elementary and middle-school market. The 21/2 by 31/2 inch, thin cardboard cards, which had a full-color front and duotone back, were packaged in waxed paper "wax packs" that included 15 cards and a flat stick of gum and retailed for approximately a quarter. There were 66 different cards, and since each pack contained a random assortment, children would have to buy a number of packages or trade duplicates with their friends to form a complete set.

By the middle of the decade, Donruss had begun licensing entertainment properties for new series of cards. Some of the first such sets were based on the hit 1964 television shows The Addams Family and Voyage to the Bottom of the Sea. In the latter half of the decade other series based on television's The Monkees and The Flying Nun were issued as well.

In 1969, Donruss made the national news when a lawsuit over its payment of corporate taxes reached the U.S. Supreme Court. The firm had paid a required $30,000 surtax on accumulated earnings for 1960-61, but then sued the government to get the money back, claiming the earnings did not pass the "purpose test" of being accumulated strictly to avoid taxes. Although a U.S. Circuit Court found in the company's favor, the high court ruled unanimously that Donruss would have to pay the tax, effectively voiding the purpose test for all corporations.

That same year, the Weiners sold the firm to food giant General Mills, under whose ownership operations continued much as they had before, with the company manufacturing a range of candy and bubble gum products and issuing sets of trading cards. In the 1970s, these continued to be based on pop-culture phenomena such as the film Saturday Night Fever, television's Bionic Woman, and rock and rollers Elvis Presley and Kiss.

Production of Baseball Cards Begins in 1981

Though Donruss was generally doing well with these series, the firm was frustrated by its inability to break into the popular category of baseball cards, which Topps had held exclusive rights to produce since 1956. In 1975, a lawsuit was filed by Topps rival Fleer to try to break the lock on baseball, and five years later a Federal judge ruled that Topps had illegally obtained exclusive rights to use the players' images. Fleer and Donruss immediately worked out agreements with Major League Baseball to issue their own sets of cards, and Donruss's first series hit stores in time for the 1981 season. In August of that year, the judge's ruling was overturned by an appellate court, but Fleer's lawyers discovered a loophole in the Topps contract which allowed cards to be sold if they were not packaged with gum or candy, or if they were sold in combination with some other item. Donruss quickly removed gum and added three pieces of a Babe Ruth puzzle to its 30 cent, 15-card packs, while Fleer enclosed team logo stickers.

Rather than over-saturating the market for baseball cards, the new competition proved a stimulant. Total sales grew from an estimated 500 million cards a year in the late 1970s to one billion by the mid-1980s as each of the three firms strove to make their card sets distinctive. For its part, Donruss included a 26-card "Diamond Kings" subset, which featured paintings of one player from each team by noted sports artist Dick Perez, and other cards that depicted non-player subjects like the San Diego Padres mascot "The Chicken," which thousands of fans mailed to the company to have autographed.

Donruss's initial success with baseball cards was soon followed by problems with distribution and overproduction, however, and in late 1983 General Mills sold the firm to conglomerate Huhtamaki Oy of Finland. Huhtamaki had also recently bought Leaf Confectionery, Inc. of Chicago and Beatrice US Confections, and the three operations were combined under the Leaf, Inc. banner. Together, the companies produced such popular brands as Milk Duds, Heath, Jolly Rancher, Switzer, and Good 'n' Plenty, as well as trading cards and Super Bubble Gum. Huhtamaki, which had been founded in 1920, owned a number of different firms that included makers of beverages, canned and frozen foods, pharmaceuticals, and industrial products. At this time, Donruss had annual sales of approximately $40 million.

The Leaf association proved a boon to the firm, as it provided access to that company's well-established distribution network. In 1985, Donruss began making special cards for Canada, and in 1986 it introduced a new 56-card set called "The Rookies." Sales of cards were continuing to grow and increased approximately 100 percent in both 1986 and 1987 to reach an estimated three billion industry-wide. Topps remained the leader, producing approximately half of the total, with Donruss selling about a quarter and Fleer a shade less. By this time, the concept of baseball cards as collectibles and even investments was gaining wider acceptance, and specialty shops were beginning to spring up around the country to serve customers who now included many adults along with the industry's core audience of teen and pre-teen boys. Prices for the 15-card packs were on the rise, now standing at 45 cents.

The baseball card boom was drawing more competitors into the fray, with Score of Texas and Upper Deck of Anaheim, California, joining the ranks in 1988 and 1989, respectively. Score boosted the cards' quality a notch by using better paper, action photographs, and improved writing on the backs, while Upper Deck went even further, issuing a 700-card set that featured holograms to discourage counterfeiting and opaque foil packaging instead of the traditional waxed paper. Its cards cost 89 cents for 15 and were also sold in complete sets through dealers.

Donruss Introduces Premium Cards in 1990

In the summer of 1990, Donruss took a page from Upper Deck's book and introduced a new, higher-quality card series on top of its standard set. Offered initially only on the West Coast, it was marketed under the Leaf brand name and cost $1.09 for 15 cards and three pieces of a Yogi Berra puzzle. The cards featured a more elegant design, with two-sided color printing on glossy paper, and foil packs, though no full sets were made available to dealers. They would be issued in two batches, one in July and the other in September, so the company could add late player trades and other changes to the second set. Donruss' sister company, Leaf, had itself issued baseball cards in the late 1940s, and the use of the brand name represented a return to that legacy.

In 1991, Topps and Fleer introduced their own deluxe card sets, and, following Upper Deck's lead, all card makers began inserting limited-edition bonus cards into random packs. Struggling to maintain its market share, Topps salted its packages with 300,000 vintage cards, at least one example of each it had produced. Other firms included cards autographed by legends like Mickey Mantle and Nolan Ryan, while Donruss inserted several new limited-edition cards, as well as 5,000 signed by Cubs All-Star Ryne Sandberg. The year 1991 also saw the launch of the Donruss Learning Series, a program for elementary and middle school children that used baseball cards to help teach history, geography, and math with workbooks and a set of 55 cards designed specifically for the program.

Baseball card mania was now at a high point, with sets of premium cards whose suggested price per pack was just over $1 commonly selling for $2-$3 or more at hobby shops, and still more new competitors preparing to enter the market. The companies' focus on limited edition inserts was not greeted enthusiastically in all quarters, however, and Donruss was criticized for including four random "preview cards" of forthcoming Leaf series, such as the stylish black-and-white Studio line, only in full sets of its standard cards, which necessitated the purchase of a complete set to obtain a handful of rare cards. The company would ultimately add two separate sets of Leaf previews in different batches of the 1991 full sets.

In the summer of 1991, Donruss began expanding its Memphis plant from 256,000 square feet to nearly 400,000. It would continue to make trading cards and bubble gum at the facility, where employment grew from 550 to 720.

In 1992, with sales of standard card lines plunging in the face of more attractive higher-end versions, Donruss announced that it was severely curtailing its production and doubling the basic cards' retail price to 99 cents a pack. At the same time, their quality was upgraded, and they were packed in foil, while certain limited-edition and autographed cards would be included at random. One subset would be the popular Diamond Kings cards, which would henceforth be produced only in limited quantities. The year 1992 also saw the firm create card series for use as giveaways by McDonald's, Coca-Cola, and Cracker Jack, and introduce a new, cheaper line of cards called "Triple Play." The latter set contained 264 cards and was sold in 12-packs that also contained a rub-off game card. Priced at 59 cents, they were geared toward the youngest collectors, who were increasingly being ignored in a market that was more and more aimed at teenagers and adult investors.

A study by Salomon Brothers of market share for card makers at this time highlighted the dramatic changes that had occurred since the 1980s. First place was now held by newcomer Upper Deck with 24 percent, followed by Topps with 22, Fleer with 20, Score with ten, Donruss with eight, and the remainder of the pie divided up by smaller companies like SkyBox and Classic.

In 1993, Donruss branched out into hockey cards, which were launched in the fall with a suggested price of $1.79 a pack. The company also introduced the Leaf Limited line, which featured cards that utilized both holograms and metal foil. Inspired by the previous year's Topp's Finest series, Leaf Limited would be restricted to 5,000 cases. At more than $5 per pack of six cards, it was Donruss's most expensive offering to date.

Sports Strikes Wreak Havoc for Card Industry in 1994

The year 1994 proved disastrous for many sports card manufacturers. A major baseball strike forced cancellation of the latter half of the season and soured many on the game, while a lockout of National Hockey League players threw that sport into disarray for a time as well. Simultaneously, the proliferation of card makers and their increasing emphasis on limited-edition series, along with a sizable drop in the resale value of recent cards, was causing large numbers of collectors to rethink their devotion to the hobby. Further aggravating factors included the actions of the players' associations, which signed deals with unlimited numbers of companies for high licensing fees that drove up card prices, and the chicanery of certain unscrupulous dealers, who found ways to remove valuable insert cards before packs were put out for public sale or even stooped to counterfeiting desirable cards. By the end of 1994, sales of baseball and hockey cards had fallen an estimated 40 percent, and Donruss's revenues were down by nearly half to approximately $50 million.

The company took several measures to regroup under new head John Williams, who had previously run Huhtamaki's Polarcup packaging unit. In 1995, the firm, which had recently become known as Donruss Trading Cards, Inc., began developing a line of entertainment cards, along with what it called interactive cards. It was soon marketing a set of nearly 100 Ace Ventura cards, based on the hit Jim Carrey movies.

The company's sales slump was dragging down Huhtamaki's profits, however, and in May of 1996 the Finnish company sold Donruss's baseball and hockey card lines to Pinnacle Brands, Inc. for approximately $41 million, and then sold the entertainment card and game businesses to U.S. Playing Card Co. Coming in the aftermath of Fleer's merger with smaller rival SkyBox International, the Donruss sale reduced the number of major card companies to four.

New owner Pinnacle Brands was a Texas company that had evolved out of baseball card maker Score, which now primarily made football and NASCAR cards. It had started in 1970 as Optigraphics, which made special "moving-image" cards, and became Score when it entered the baseball card market in 1988. Its founders and owners, Ann Blake and John Flavin, had divorced in 1992, with Flavin continuing at Score and Blake leaving to found a company called Cardz Distribution. After Score became Pinnacle, Flavin sold his own stake in the firm.

Under the aegis of Pinnacle, Donruss continued to release various lines of baseball and hockey cards, including such items as Leaf insert cards printed on actual pieces of metal and others printed on leather and wood. Such strategies did not succeed in reversing the company's fortunes, however, and in July of 1998 Pinnacle Brands, Inc. and subsidiaries filed for bankruptcy. A year later, the Donruss, Score, and Leaf brands, excluding their baseball and hockey licenses, were acquired by Playoff Corp. of Grand Prairie, Texas, after a heated bidding war with representatives of Fleer and Upper Deck. Playoff, which was owned by Ann Blake, had grown out of her Cardz operation and now produced several lines of high-end football cards. It generated some $25 million in annual revenues. In the months following the sale, new series of Leaf, Score, and Donruss Elite cards were issued, and in 2000 the firm added a new 36,000-square-foot distribution facility and launched a line of cards based on the Japanese animated television series Dragonball Z.

Baseball Cards Return in 2001

In early 2001, the company became known as Donruss Playoff L.P. and won a license from Major League Baseball Properties and the Major League Baseball Players Association to produce cards for the forthcoming season. The firm would make sets for the two "lost" years of 1999 and 2000 as well. During the year, Donruss Playoff also moved its headquarters from Grand Prairie to Arlington, Texas, where it planned to eventually open a visitors center and memorabilia museum.

In 2002, the company issued a set of 150 Diamond Kings cards and sold most of the original paintings on Internet auction site eBay. Other new card series contained insert cards that held pieces of bats and uniforms used in actual games by 100 current and past players, a practice copied from Upper Deck. Another of Donruss's insert sets, inspired by one from Topps, turned to the designs of the earliest baseball cards, using ornate gold borders and canvas-like paper. The year 2002 also saw the firm produce entertainment cards for programs such as Buffy, The Vampire Slayer through its new Score Entertainment division and introduce the first U.S.-produced Spanish-only baseball card set, the 225-card Super Estrellas. A six-card pack, which included a mini-poster, retailed for $1.99.

Donruss stirred up controversy in 2003 when it announced plans to slice up a rare game-worn Babe Ruth jersey, for which it had paid $264,210 at auction. It would randomly insert 2,100 cards bearing pieces of the shirt into packs over the next several years. The company responded to critics of the jersey's shredding by stating that it gave average fans a chance to own a piece of history and brought out the legendary Yankee's 86-year old daughter to give the cutting her stamp of approval. Also in 2003, Donruss created a first-ever set of cards for players of the 17-year old Arena Football League, which would be sold at games and via the teams' Web sites. The following year, the company launched a baseball card insert series called Fans of the Game, which depicted baseball-loving performers like Regis Philbin, Charlie Sheen, Joe Mantegna, and Sopranos star James Gandolfini.

With a half-century of history behind it, Donruss Playoff L.P. continued to focus on the production of collector-oriented sports and entertainment trading cards. The firm had been chastened by the card market shakeout of the 1990s and was now focusing on high quality or limited production items which offered such bonus features as player autographs and slices of game-worn uniforms and equipment.

Principal Subsidiaries: Score Entertainment.

Principal Competitors: The Upper Deck Company, LLC; The Topps Company, Inc.; Fleer/Skybox International LP.

Chronology

• Key Dates:
• 1954: Candy maker Thomas Weiner Co. is renamed Donruss.
• 1960s:The company begins producing trading cards based on television programs.
• 1969: Donruss is acquired by General Mills.
• 1981: After Fleer wins a lawsuit against Topps, Donruss produces its first baseball cards.
• 1983: General Mills sells Donruss to Huhtamaki Oy of Finland.
• 1990: The company introduces a line of premium cards.
• 1993: Hockey cards are added.
• 1996: Huhtamaki sells Donruss sports card lines to Pinnacle Brands, Inc.
• 1999: Bankrupt Pinnacle sells Donruss to Playoff Corp.
• 2001: Playoff takes the name Donruss Playoff L.P.; baseball card production resumes.
• 2003: The company slices a rare Babe Ruth jersey into pieces for insertion into card packs.