Thursday, May 31, 2012

So Curt Schilling Fucked Rhode Island

So Curt Schilling Fucked Rhode Island

And really really hard at the tune of $75 million. And if that wasn't funny enough, it was through the act of a fucking video game. I mean, you really can't make this shit up.
So you may have heard or played Kingdoms of Amalur: The Reckoning. It seemed like somewhat of a decent game, although very side quest heavy and definitely too convoluted for my tastes. However, it was heavily backed with an upcoming MMORPG which has RA Salvatore's tag on it, as well as Todd McFarlane and some other big names in the business.

Curt Schilling decided it would be a good idea to move out of the state of Mass., and at the same time try to create more funding for his company. What happens next should be enough to get anyone a bit concerned for the tax payers of Rhode Island.

A little known organization called the EDC worked in conjunction with Schilling to bring the organization to the state in exchange for jobs. The loan amount is $75 million, which was to be paid back in installments. Here is the kicker, if they fail to pay it back, the debt falls to the tax payers of Rhode Island and Curt Schilling can hop away scott free with, over the course of his career, was minimal investment in the organization compared to his net worth, and ride a golden parachute into ESPN Commentary.

We most all know this is a terrible investment/risk for Rhode Island. Well, that day has come where they have only sold 330,000 copies of KoA, have mismanaged funding into oblivion, and now have missed their EDC payment. What is worse? Their workers are not recieving their pay checks so 38 studious has enough to pay the 1.2 million installment of the loan. How did this all come to fruition?
So not only are the poor people that work at 38 screwed completely - you know, save the executive team of course - but the entire tax payer base of Rhode Island are going to have to bail out Curt Shilling's company, who will lose nothing of the rest of his net worth while hard working folks in Rhode Island will undoubtedly, sooner or later, fork over the remainder of the $70 or so million still owed. Everyone who had jobs will lose them again, and Rhode Island will be in even worse shape than before.

Meanwhile, Curt Schilling will retain all his assets as the loan stipulated none of the default will go to him, but to the tax payers, since he convinced the EDC that since he is giving them jobs and bringing revenue to the city, they should take the risk.

In fact, the person who lost out was the EDC's executive director, as he resigned over this.

In the final months of two mostly unmemorable terms in office, Rhode Island Governor Donald Carcieri boasted about his little state’s big splash - stealing former Red Sox pitcher Curt Schilling and his nascent video game company from Massachusetts.

“This is a risk worth taking,’’ said Carcieri, a Republican, announcing the 2010 deal that lured Schilling’s company, 38 Studios, to Providence, and put Rhode Island taxpayers on the hook for up to $75 million in guaranteed loans to an athlete who liked video games but had never developed one.

Schilling had originally hoped to launch the game’s first product in 2010. But he immediately hit trouble raising money. He shocked venture capitalists with an audacious pitch for $48 million - far more than gaming companies typically receive in an initial round of funding. In addition, Schilling was reportedly reluctant to give up much stock in exchange for funding. Flybridge Capital Partners and several other Boston area firms passed on 38 Studios.

“More than one VC who has met Schilling has come away with the impression that an investment would require quite a bit of ‘babysitting,’ ’’ noted a trade publication, Private Equity Week, at the time.

When the proposal came back for more debate in May, Representative Laurence Ehrhardt, a North Kingstown Republican, was ready with an amendment that would cap at $10 million the loan guarantee available to any one company. Loan guarantees would mean the state would be obligated to pay if the company defaults.

As debate began on the House floor, Ehrhardt got a note that someone wanted to see him in the hall, he said. It was Stokes, the economic development director.

“He had learned of my amendment and made a personal request that I not submit it,’’ said Ehrhardt. Stokes never mentioned Schilling, suggesting only to Ehrhardt that the cap would “cause some difficulties with some negotiations they were having. But nothing more specific then that.’’

Under the terms of the loan, 38 Studios must pay $5.3 million in interest this year, and $12.7 million in interest and principal every year from 2013 to 2020.

Schilling’s company released its first effort earlier this year, a role-playing video game called Kingdoms of Amalur: Reckoning. It was well-reviewed and has sold about 1 million copies at about $60 each, according to market research company VGChartz.

Governor Lincoln Chafee, an independent, criticized the deal with 38 Studios as a candidate in 2010. He has been cool to Schilling’s request for more public assistance, though Chafee has said it is in the state’s interest to find a way to save the company.

Other opponents blasted the deal on Thursday, and warned against any more taxpayer dollars for Schilling’s company.

“We got hoodwinked; we got played,’’ Watson said. “How many millions of dollars does Curt Schilling have? He can’t write a check? It’s Rhode Island that is supposed to provide the money? I think not.’’

Stokes, who resigned late Wednesday, had little to say about the unraveling deal with Schilling, insisting the economic development agency’s negotiations with the company remain confidential. He would not directly address whether the agency gave proper oversight to the state’s investment in 38 Studios.

R.A. Salvatore is fine, walking away with a cool $5m.

But hey, Curt Schilling once said:
“There can be no question our country is in the worst economic crisis of our lifetimes. I also think there can be no question that it falls on us, the individuals, to find a way out of our own personal crisis.”

Meanwhile, everyone at the company has been laid off. So hey, good luck, Rhode Island. I guess I should feel bad for the employees, who were apparently blindsided by the financial reality of the company.

It makes you wonder why it fell apart, considering their latest game sold "well", and by well I mean 1.2 million copies. But I guess that wasn't enough and they actually needed to sell around 3 million to turn any sort of a profit.

I guess that's what happens when you're a shitty business man. His company was trying to do some strange stuff like take over the mortgages to make the lives easier on his employees. But hey, that's now Rhode Island's problem.

Other Schilling investments involve purchasing and marketing advanced squad leader, a WW2 board game no one played because the basic rulebook is over five hundred pages long and it literally takes nine hours to play four turns.

No, seriously. I'm not using "literally" ironically here and I'm not making that number up. Four turns is the suggested game length because playing a scenario out would take days to accomplish.

So anyhow, now that the state is fucked, let's look back at what money that went to a video game could have accomplished. For example, they could have paid teachers or funded a university with that money, but nope, gotta make a MMO for jobs that are going to last maybe a year and then get laid off anyway.

Just imagine that sales pitch "Okay, see this is my business plan, have you heard of a thing called World of Warcraft? Oh, teachers? Fuck them!"

They literally could have given 1,000 teachers a reasonable year's salary for that much money. Hell, I think a teacher would need to be a hired assassin on the side to be making 75k a year, so it's really more like 2,000 teachers. Especially accounting for various charges and procurement for teaching supplies, 1,000 would be easily covered. Because it should be pointed out again that teachers don't get funds for supplies and basic needs like that. Shit, considering how much time teachers spend on work and curriculum development outside of class and all the materials they need to buy themselves, this money is just tragically wasted on a fucking video game company.

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