“It really is not that complicated, I just don’t understand HOW people don’t grasp the concept of ‘Free Market’, and why left alone, it WORKS!” - Curt Schilling, March 2010
An ironic story has been unfolding in Rhode Island about the solvency of 38 Studios — a video game company founded and owned by retired Boston Red Sox ace and current ESPN analyst Curt Schilling. In addition to being one of the best pitchers of his era, Schilling has been a celebrity blowhard for Republican politicians and in theory, smaller government. He even campaigned for President George W. Bush in 2004, and Massachusetts Senate candidate Scott Brown in 2010.
Despite espousing the principles of laissez-faire capitalism, it turns out that Schilling doesn’t think they should apply to him. Like far too many shameless business-types in America, Schilling and his company suckle at the government even as he chastises the evils of government. In July 2010, the Massachusetts-based 38 Studios was enticed away by Rhode Island with $75 million in taxpayer-backed loan guarantees. At the time, some Massachusetts conservatives, such as those in this rightwing rag, criticized Democratic Governor Deval Patrick for failing to make a corporate welfare counteroffer that would keep the company in the Bay State.
More and more, telling Schilling not to let the door hit him on the way out appears to have been a smart move by the Patrick administration. That’s because 38 Studios looks to be in serious financial trouble. Last week it was revealed that Schilling’s company missed a $1.1 million loan repayment earlier this month after it bounced a check to the state of Rhode Island. During the same week it failed to make payroll. On Friday, the company did manage to make the scheduled payment, but it still failed to pay some of its employees and has had to lay off some workers. Of the $75 million in the original loan package, already $50 million of it has been disbursed. And all $50 million has been spent. The remaining $25 million has been reserved for company bondholders.
Current Rhode Island Governor Lincoln Chafee, who opposed the deal during his 2010 gubernatorial run, is now left holding the bag, which could very well contain something with all the value of a soiled diaper. On Monday he cryptically told reporters, “We’re in deep,” as he finds himself in the unenviable position of having to try to protect the state’s investment he opposed without committing (too much) more taxpayer money.
Unfortunately, it is difficult to know at this point just why exactly the finances of 38 Studios are in such bad shape and how severe the situation is. Both state officials and 38 Studios management haven’t said much publicly as they’ve been working behind closed doors to arrive at a solution. That would include Schilling who has never shut up about anything in his life, yet strangely is at a loss for words now that his company is in trouble, the taxpayers of Rhode Island might be on the hook for $75 million or more, and he’s exposed himself as a pseudo-capitalist fraud.