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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MechaCrashUnfortunately, you have to focus on the perpetrator to figure out the whys so you can try to prevent it from happening again.10/24/2014 - 10:55pm
quiknkoldpoor girl. poor victims. rather focus on them then the shooter. giving too much thought to the monster takes away from the victims.10/24/2014 - 10:15pm
Andrew EisenFor what it's worth, early reports are painting the motive as "he was pissed that a particular girl wouldn't date him."10/24/2014 - 10:12pm
quiknkoldwell then I suck as a man cause I ask for help when necessary :P10/24/2014 - 10:07pm
Technogeek(That said, mostly I was making the smartass evopsych comment because your post seemed like the kind of just-so story that has come to dominate 99% of its usage.)10/24/2014 - 10:04pm
TechnogeekHell, Liam Neeson built his modern career around it. Cultural factors likely play a far greater role than you appear willing to admit.10/24/2014 - 10:03pm
TechnogeekSeriously, though, the idea of "because women are protectors and that's why they never commit school shootings" is, at best, grossly overreductive. There's nothing inherently feminine about being willing to kill in order to protect one's offspring.10/24/2014 - 10:03pm
MechaCrashThe "toxic masculinity" thing refers to how you have to SUCK IT UP AND BE A MAN because seeking help is seen as weakness, which means you suck at manliness, so it builds and builds and builds until something finally snaps.10/24/2014 - 10:01pm
quiknkoldthere, I'm done. And thats what Christmas is all about, Charlie Brown10/24/2014 - 9:54pm
quiknkoldand I am not spouting Evopsych, technogeek. tbh I never heard the phrase till you said it. I'm going off my observations.10/24/2014 - 9:54pm
quiknkoldmoreover, the guy who did this isnt even white. He was native american according to the news report I read. Also that he went for a specific target. That's a much different picture than a certain Sandy Hook guy who will not be named10/24/2014 - 9:53pm
quiknkoldbut I am also certain nobody in their right mind is committing these shootings singing the Machoman song. these are sick individuals who have given up on life10/24/2014 - 9:51pm
Technogeekevopsych lol10/24/2014 - 9:49pm
quiknkoldWhen you suffer from mental illness, youre more likely to go by instinct. yes. I came off as sexist.10/24/2014 - 9:46pm
quiknkoldmore on somthing they are fixated on. Post Partum Depression is an example. This is why a woman is less likely to go off on a rampage.10/24/2014 - 9:44pm
quiknkoldA Mother will fight to protect her children or her mate. This does not mean they are any different then males when it comes to destruction and mental illness. A Woman has just enough opportunity to be sick like a man. The difference is they will focus10/24/2014 - 9:43pm
quiknkoldsociologist. I've spent years observing and I've come to the conclusion that a big reason men and women are different is because Women are Protectors. Women wont wantonly kill because they are all about protecting what they care about. They are wired this10/24/2014 - 9:43pm
james_fudgeYeah having a penis probably doesn't have a lot to do with it10/24/2014 - 9:32pm
quiknkoldIts Mental Illness. Nobody who is actually sane would willingly walk into a school and commit that. its Mental Illness topped with Teenage Angst. and I'm going to say something that may be construed as sexist, but I dont mean it as such. I mean it as a...10/24/2014 - 9:29pm
Matthew WilsonIt is a worth while discussion, but I dont agree with here premise. I dont belive it has anything to do with masculinity.10/24/2014 - 9:13pm
 

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