Columnist: 38 Studios Loan a “High Stakes Gamble”

September 27, 2010 -

“What Government run/funded program in this country’s history has ever been run with an ounce of financial responsibility, prudence, or with the peoples (sic) best interest at the forefront? None, that’s which one.”

Those words were used by ex-Major League Baseball pitcher and current 38 Studios head Curt Schilling earlier this year, and are now being used against him in a searing indictment of the loan agreement between Schilling’s studio and the state of Rhode Island.

Rhode Island’s Economic Development Corporation (EDC) lured 38 Studios to the Ocean State from Massachusetts with the promise of a $75 million loan, which was later paired to around $51 million. In a story entitled Curt Schilling’s Rhode Island Hoodwink, columnist Diane Grassi rips the entire deal.

Noting that Rhode Island’s unemployment rate is almost 12 percent, 4th highest in the U.S., Grassi writes that the original EDC program was to have a total budget of $50 million. When Schilling started to make noise about moving and asked Massachusetts for assistance or a loan to keep 38 Studios in Massachusetts, he also approached Rhode Island with a similar request.

Grassi writes:

Rhode Island, unlike its neighbor, Mass., apparently bought it hook line and sinker, because the program's original authorization was increased from $50 million to $125 million, with 60% of it specifically earmarked for Curt Schilling. Quite a feat for a non-resident with no prior allegiance to the state of Rhode Island, nor a commitment to personally move his home there to date, just his company.

If 38 Studios’ business did go south or it failed to live up to its end of the loan agreement, Grassi wonders how the company would be able to repay the loan:

… with intellectual property start-ups, unlike traditional manufacturing, where hard assets are used as collateral, there is little to liquidate with an IP venture. Its soft assets would include intellectual property, licenses, publishing contracts and software, but could be worth very little in the end.

She also estimated that 38 Studios would need to sell 1.75 million copies of its role-playing game Kingdoms of Amalur: Reckoning in order to break even, though “best estimates” predict that the title would sell in the area of 1 million.

In answer to Schilling’s quote that led off this story, Grazzi wrote:

For now going to one of the most cash-strapped states, not to mention the smallest state, with hand outstretched in search of government subsidized corporate welfare is apparently just fine.


Comments

Re: Columnist: 38 Studios Loan a “High Stakes Gamble”

While I do agree with his statement, one has to admit he stuck his foot in it.   Guess it really doesnt pay (pun maybe) to irk off the people controlling the money . 

 
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james_fudgethere's some inside baseball stuff going on in this Andrew - likely some stuff we don't know10/20/2014 - 3:30pm
E. Zachary KnightGreat musical video about online trolling. https://www.youtube.com/watch?v=_nS-QeM2ne810/20/2014 - 2:46pm
Andrew EisenBut again, this whole thing is just too damn vague to form an opinion on.10/20/2014 - 2:40pm
Andrew EisenWithout the original communication, it's impossible to say if it could honestly be misconstrued as a friendly suggestion rather than an employer directive. However, it appears that subsequent emails should have cleared up any doubt.10/20/2014 - 2:40pm
Andrew EisenThose aren't the owner's words, they're Chris Dahlen's. For what it's worth, we do see an email from Gonzalez stating "you've already broken the only rule we set for you!!!!!!!"10/20/2014 - 2:38pm
Michael ChandraSo really the guy's own words strike me as "wah! How dare you disagree with me!" behaviour, which is the sort of childish attitude I am unfortunately not surprised by.10/20/2014 - 2:17pm
Michael ChandraCorrect AE, but then again the owner's own words are about "wishes", not about an order. No "we told him not to", but going against his wishes.10/20/2014 - 2:16pm
Matthew Wilsonyup. sadly that has been true for awhile.10/20/2014 - 2:10pm
james_fudgewelcome to 2014 politics. Increasingly fought online10/20/2014 - 1:54pm
E. Zachary KnightIt is honestly a shame that anyone has to publicly state they are against such vile behavior, but that is the sad life we live.10/20/2014 - 1:46pm
E. Zachary KnightDecided to publicly reiterate my opposition to harassment campaigns. http://randomtower.com/2014/10/just-stop-with-the-harassment-and-bullying-campaigns-already/10/20/2014 - 1:45pm
Andrew EisenMichael Chandra - Unless I overlooked it, we haven't seen how the directive to not talk about whatever he wasn't supposed to talk about was phrased so it’s hard to say if it could have been misconstrued as a suggestion or not.10/20/2014 - 12:35pm
Andrew EisenHey, the second to last link is the relevant one! He actually did say "let them suffer." Although, he didn't say it to the other person he was bickering with.10/20/2014 - 12:29pm
Neo_DrKefkahttps://archive.today/F14zZ https://archive.today/SxFas https://archive.today/1upoI https://archive.today/0hu7i https://archive.today/NsPUC https://archive.today/fLTQv https://archive.today/Wpz8S10/20/2014 - 11:21am
Andrew EisenNeo_DrKefka - "Attacking"? Interesting choice of words. Also interesting that you quoted something that wasn't actually said. Leaving out a relevant link, are you?10/20/2014 - 11:04am
quiknkoldugh. I want to know why the hell Mozerella Sticks are 4 dollars at my works cafeteria...are they cooked in Truffle Oil?10/20/2014 - 10:41am
Neo_DrKefkaAnti-Gamergate supporter Robert Caruso attacks female GamerGate supporter by also attacking another cause she support which is the situation happening in Syia “LET SYRIANS SUFFER” https://archive.today/F14zZ https://archive.today/Wpz8S10/20/2014 - 10:18am
Neo_DrKefkaThat is correct in an At-Will state you or the employer can part ways at any time. However Florida also has laws on the books about "Wrongful combinations against workers" http://www.flsenate.gov/Laws/Statutes/2012/448.04510/20/2014 - 10:07am
james_fudgehe'd die if he couldn't talk about Wii U :)10/20/2014 - 9:16am
Michael ChandraBy the way, I am not saying Andrew should stop talking about Wii-U. I find it quite nice. :)10/20/2014 - 8:53am
 

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