Well, That's One Way To Fund Your Company

"Thanks for the shirt! I'm going to go run a game company now, or possibly become a Senator, in a state that may or may not be this one."

38 Studios moves a few miles down the road from Boston to Rhode Island thanks to a $75 million kickback.

Schilling said yesterday that his efforts to arrange assistance from Massachusetts met with seeming indifference. “It was very hard to get to anyone,’’ he said.

Keith Stokes, the executive director of the Rhode Island Economic Development Corp., told the Globe several weeks ago that his office was originally approached by Schilling’s company. “We weren’t pursuing 38,’’ Stokes said. “They came to us.’’

Yesterday, Stokes said the state would issue bonds to generate the $75 million, and Schilling’s company would receive the cash in stages as it added jobs and met predetermined goals.

Local developers react as if Curt Schilling signed with the Yankees.

Curt, we love our home state of Massachusetts. In the end, if you really move your company down to Pawtucket, it will be a loss for the Boston game community. If anyone on the talented 38 Studios team wants to stay in Massachusetts, where we play major-league ball, they’re more than welcome to join the team at Demiurge Studios, the state’s soon-to-be largest independent game studio.

And even local politicians got in the act.

A day after Schilling announced he was accepting a $75 million loan guarantee package to move his 38 Studios LLC to the Ocean State, politicians in Massachusetts and Rhode Island questioned whether the incentive deal was worth the price.

Former U.S. Sen. Lincoln Chafee, a candidate for governor in Rhode Island, even questioned the validity of Schilling’s famous “bloody sock” tale in the 2004 Red Sox march toward a championship. Chafee later backtracked from his fake bloody-sock crack.

But Massachusetts officials weren’t reversing their call that Schilling was off-base for accusing Massachusetts of not doing enough to keep his budding Maynard-based firm in the Bay State.

“I think in the end he was, I think, hoping we would get in a bit of a bidding war with Rhode Island, and we weren’t prepared to do that,” Greg Bialecki, Gov. Deval Patrick’s economic czar, told the State House News Service.

No word on how this straight-up corporate welfare grab for taxpayer dollars meshes with Schilling’s long-rumored conservative political ambitions. If you’re wondering why this is relevant to this blog, Curt Schilling is responsible for bringing Advanced Squad Leader back into print! There may also be something involving dark elves.

  • http://twitter.com/D_0ne D-0ne

    I for one welcome any job creation, any where.

  • Ashendarei

    Except it looks more to me like it’s job migration.   If they’re leaving Boston and going to RI then it would stand to reason that many of their employees are either dislocated, or moving with the company.

  • http://geldonsgaming.blogspot.com geldonyetich

    Boggling just how pull a former major league baseball player has at securing loans.  I’ll reserve judgment for Studio 38 (who?) for when they actually getting around to releasing a game.

  • Vetarnias

    @Geldonyetich

    Yeah, I’m surprised at that, too. Not that he has a seemingly endless credit line (it’s not as though the guy could return to the bullpen if things go sour), but that the hype machine has been working in overdrive regarding Studio 38 and its project. I remember an article on MMORPG.com that listed “Five MMO’s that may surprise you” that actually included the game. Never mind that when that was written, in February, we only had the code name “Copernicus” to go by, or that, six months later, we don’t know that much more, as the only tangible project put forth by Studio 38 so far is its “Kingdoms of Alamur”, which is single-player; MMORPG.com, in its infinite wisdom as a nerd pollyanna, had no qualms about including Copernicus anyway — let alone allowing it to top its thoroughly undistinguished list which also included the now-discredited Allods, the stillborn Mortal Online (did you know it released in June?), or the “that’s an MMO?” The Agency. Bleak indeed; or maybe that was the point: your expectations were so low that if any of those games had turned out to be any good, you would have been surprised.

    So, we still don’t know much about Copernicus, but they’re all going: “Hey, Salvatore is involved, the EverQuest guy is designing it — no, not Brad — blah, blah.” It might turn out to be garbage, just as it might be a good game; but Studio 38′s apparent financial woes are something to be concerned about, if they are such that the company is prepared to sacrifice some very serious goodwill by moving to another state just for the money.

  • http://blog.eldergoth.com/ The Claw

    Even the most diehard fiscally conservative Republican will change his tune about “tax & spend” government as soon as some of the public money being spent starts flowing in his direction. What else do you expect from an ideology 100% rooted in personal greed?

  • Mark

    “Even the most diehard fiscally conservative Republican will change his tune about “tax & spend” government as soon as some of the public money being spent starts flowing in his direction. What else do you expect from an ideology 100% rooted in personal greed?”
    Heh. So true. Shouldn’t the free market philosophy eschew government help? It seems hypocritical, though I can’t blame them for grabbing at the money.

  • Scatch Maroo

    Haven’t enough oppressed people spoken often enough about the damage that can and will be done from gross stereotyping?

    I came here for tractors, damn it.

  • http://www.mmomisanthrope.wordpress.com Dblade

    It sucks, I live in Connecticut, and the New England economy is very tight as it is. At least tax cuts to attract business aren’t taking more money from underfunded state and local budgets. It would be one thing if 38 studios had a track record, but this is a big gamble on a studio that isn’t inspiring much. If 38 tanks and goes into bankruptcy good luck getting the loan back.

  • http://numtini.dreamhosters.com numtini

    These corporate welfare deals never attract the number of jobs they claim to, so I’m delighted, as a Mass taxpayer, that we didn’t waste our money trying to keep them. Though RI did cut a heavy deal where there’s a $7.5k penalty for each of the jobs that aren’t created, which is a great balance for the $166k best case potential liability per job.
    I mean good luck to them and all, I’d love to see a serious new MMO developer on the scene, but I see RI on the hook for a lot of money in a field where there hasn’t been a successful launch for over five years and with a company that looks more like a celebrity hobbyist with a lot of money indulging himself than a serious business venture.
    In terms of secondary effects, there’s been a lot of handwringing about the general difficulty in attracting cutting edge tech startups to Massachusetts given our educational opportunities and the general consensus seems to be that it’s primarily an issue with culture, not with economics. Certainly California continues to spawn tech startups despite being an even more expensive state with an utterly broken political system. Massachusett’s problems would be far worse in RI, which is, to be blunt, a cultural black hole, so I can’t see Schilling’s move there inspiring other companies to follow–at least not without similar handouts.

  • JuJutsu

    “…the company is prepared to sacrifice some very serious goodwill by moving to another state just for the money.”

    What goodwill will be sacrificed by moving to another state?

  • Vetarnias

    @JuJutsu
    As an intangible, it’s almost difficult to say what impact this will have on 38 Studios. However, in the absence of a solid track record à la Bioware (or any track record, for that matter), all it really has is the names attached to it, and whatever special cachet it might have as an indie developer.

    When, at this stage, where you don’t have a single game on the market, you already start asking for a government handout, it isn’t looking too well. It might be that 38 Studios is in a dire financial predicament, and that it needed the money. But the word of mouth (or hype, if you prefer) about “Copernicus” has been exceptionally positive, especially since we know nothing about the game, not even its title. Salvatore and experienced developers might be attached to the project, but as far as we know, it might turn into another Vanguard.

    As long as private money was being shoveled into it, everything was fine; you sort of hoped they’d pull through and release something worthy, or at least halfway decent like Pirates of the Burning Sea, but you understood that there was always a risk that it would be vaporware, or that whatever game they would push through the gate in their dying throes would be half-finished, unsatisfactory, and quickly forgotten. But now, you pour public money into it, and no small sum at that: $75 million of it, in a state with barely one million people.

    For my part (and that means squat, since I don’t live in RI, let alone the US), at least I’m glad to see it’s a loan, and not some gratuitous subsidy that might otherwise have gone to banana groves, tropical fish hatcheries and other industries that would never have thought of settling in your state without greasing their palms; but what’s the difference if 38 Studios goes bankrupt? Yes, I know, how callous and heartless, but if I were to invest public money in what is an undeniably risky sector, I would go for a company with a proven track record, not a start-up with prestigious names.

    However, 38 Studios might lose goodwill because, unlike Boston, Schilling has no ties to RI, and $75 million for something as risky and frivolous as video games (sorry Scott and others who work in the business) is outrageous, even if it’s just a loan. Whether your average gamer cares is another matter.

  • Guy

    “Even the most diehard fiscally conservative Republican will change his tune about “tax & spend” government as soon as some of the public money being spent starts flowing in his direction. What else do you expect from an ideology 100% rooted in personal greed?”

    Heh, unless you’re the Governor of South Carolina. Or did he change his mind about taking some stimulus money?

  • etherealwolf

    “Even the most diehard fiscally conservative Republican will change his tune about “tax & spend” government as soon as some of the public money being spent starts flowing in his direction. What else do you expect from an ideology 100% rooted in personal greed?”

    True, but Curt has gotten in over his head I think. Money thrown at the mmo bubble is less of a sure thing now even with big name writers/designers/artists. He has alot of his personal money tied up in this and stands to lose it if he can’t get enough funds to at least see it through to a proper launch.

    Its also a risk for RI, but from what I’ve been reading their economy has been in the shitter so might as well take a gamble on a company with a celebrity roster. Like others are pointing out it is a loan not a blank check.

    As for MA, they should have answered the phone. Their loss.

  • JuJutsu

    @Vetarnias

    I guess I just can’t see potential customers caring whether they are based in this state or that state

  • http://twitter.com/numtini Kathleen Hallet

    What goodwill will be sacrificed by moving to another state?
    Schilling is viewed as the guy who won the World Series for the Red Sox. Move a game company hurt his rep? He could sacrifice a thousand babies to Satan on the statehouse steps and it wouldn’t put a dent in goodwill towards him in Massachusetts.

  • Iconic

    I am so conflicted. Any one who’s bringing back old Avalon Hill games is a true gamer, and yet how can you respect a multi millionaire who is in business with other multi millionaires who is taking public money in order to pocket (they hope) hundreds of millions of dollars or more, some day? How do wealthy people ever reconcile the stance that they don’t want their tax dollars going to educate or cloth or feed other people’s kids at the same time that they’re stuffing their pockets? It doesn’t make any damn sense to me.

    I really hope Copernicus and 38 studios turn out to not suck, but I am really glad it’s not my state that’s handing over cash for Schilling to do what he was going to do anyway.

  • http://www.lucid-vision.org Mangar

    The reality, is that the public money Rhode Island spent, will be much less then the revenue created via property taxes, income taxes from jobs created, and various other fee’s associated with the move.
     
    The thing that people sometimes forget, is that a business needs to make money. If it can cut costs by moving to a different state with lower corporate, income, property, and various other taxes – It not only will, but it should. Something similar recently happened in New Jersey with a company called Honeywell which was planning to move to a more business friendly state, until our current Governor decided to work with them and keep them in NJ. (Details via google search, but essentially he looked at what the company would save by moving, and created ways to create that savings within NJ) It’s also the reason why nearly every auto manufacturing plant that has been built recently, has been in various southern states instead of Michigan or other blue states.
     
    Being angry at Schilling for doing right by his employee’s, business, and investors is the height of idiocy. The only blame should be directed as Massachusetts for having an unfriendly business environment.