Back in 2010, former MLB pitcher Curt Schilling must have felt like the king of the world. Four years after starting up his little rinky-dink video game company, 38 Studios (originally: Green Monster Games), he was getting propositioned by Governor Donald Carcieri to bring it from Massachusetts to Rhode Island. What precisely Carcieri saw in the venture that made it so appealing to him remains unknown to this very day, but what he offered up to Schilling is a matter of public record: a $75 million loan guarantee.
That was then.
On May 1 of this year, 38 Studios missed a scheduled $1.1 million payment to the Rhode Island Economic Development Corp. Then, this past Thursday, presumably in an effort to right that wrong, 38 Studios hand-delivered a $1.1 million check to the agency; unfortunately, shortly after the check was delivered, it came out that there weren’t sufficient funds to cover it.
The company also no longer has the dough to make payroll – which probably isn't the best sign.
When Carcieri originally lured Schilling’s venture to Rhode Island, the purported logic behind bringing an ultra-risky video game company to town was that it would create jobs. More specifically, 38 Studios pledged to employ 450 locals when it was all said and done; as of about a week ago, only 288 Rhode Islanders have been employed by the company. And seeing as it’s currently in the process of handing out bad checks and not being able to make the current payroll, assuming that 38 Studios won’t be going on a hiring spree at any point the foreseeable future probably isn’t a huge stretch.
Which brings us to Schilling himself. Over the years, the somewhat legendary pitcher has made his Republican ties and anti-bailout stance no secret. And that’s fine. Problem is, now that his company is in trouble, it looks as though he’s not having any sort beef with the fact that Rhode Island is on the hook for all the money that was poured down the drain for his little operation. As noted by WEEI, if this thing fails the way that it looks like it will, the total bill for Rhode Islanders -- after interest is figured in -- will be in the $112+ million area.
According to a court disclosure obtained by WPRI, back in the day, Schilling advanced the company $4 million of his own money. That money has already been paid back to him. So, again, Rhode Islanders are stuck on the hook for $112+ million if 38 Studios fails as it likely will, and Schilling is free and clear at the moment.
The problem here is obvious. It’s not that a company was started and is heading towards seemingly inevitable failure. It’s not even that the government decided to hand out an ill-advised loan to said company when there were serious concerns about how things would ultimately turn out. It’s the blatant hypocrisy involved. After his vehement rejection of bailouts and all that sort of stuff, Schilling seems very content leaving a state -- whose only error in judgment was believing that he knew what he was doing -- on the hook for his massive failure.
So what happens next? Well, therein lies the problem. Unless 38 Studios gets a major cash infusion, the company’s prospects look bleak. And who would even consider giving a failing video game company more money for, really, nothing more than its short-term survival? Aside from the only party who has a real vested interest in the company not folding – no one.
Yup, there is only one vein for 38 Studios to tap, and you can probably guess what that is. Schilling, according to the Boston Globe, has already asked for more public funds.
Good luck with this one, Rhode Island.