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Maybe just as well we let Curt Schilling move his company to Rhode Island
By adamg on Tue, 05/15/2012 - 3:42pm
Massachusetts has failed solar companies and Rhode Island might soon have Curt Schilling. The Providence Journal reports Gov. Lincoln Chafee spent his weekend trying to figure out how to keep Schilling's game company "solvent," because otherwise the state might be out the $75 million it loaned it to get it to move from its original home in Maynard. Schilling has often said he doesn't want government handouts.
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Comments
He's got millions... he can't
He's got millions... he can't bailout his own company??
Uh...
He actually took a bailout himself here. He started the company and put in 3 or 4 milly of his own, but a few of the RI millions were used to pay him back, so he's not gonna taking any bath here at all.
Thanks for the rings
But you're a shameless hypocrite.
Bashes "Liberal Massachusetts" for our taxes and way of doing things, storms off to RI because he can't get a government handout on the taxpayers dime, then bootstrapping entrepreneur guy he is loses RI taxpayer money in a failed venture and is looking for more.
Ayn Rand would be proud!
PS, his game, which took forever to come out, wasn't that good. Wasn't bad, but wasn't that good and borrowed quite a bit that did work from others.
What game was it again?
Is it the same series that exists on the Xbox?
Multiplatform
Kingdoms of Amalur: Reckoning
Hasn't sold very well.
Ah thanks.
Seems like it got good reviews though.
Yeah
as said, not bad.
Just in the gaming industry "not bad" + a AAA game budget = bankruptcy after one try. Big risk big reward, but few rewards to go around. Coders and asset artists are very expensive, and it takes thousands of man hours to put together a large game. Tax breaks and guaranteed loans to a start up company that already was having cost overruns and missing dates was not a wise investment.
MA said no thanks, RI seems to be doubling down. And Shillings politics make it amusing territory.
It be like Timmy Thomas starting up a solar factory and screaming about not getting government subsidies.
Just makes you scratch your head.
Depends on the reviewer
I prefer this guy's reviews:
http://www.escapistmagazine.com/videos/view/zero-p...
"Baby's first Skyrim" or "Fable without its balls" or "World of Warcraft for single player"
1.1 million units is "hasn't sold very well"?
1.1 million units is "hasn't sold very well"? I've no idea how much was invested in this project (taking out distributor/sales overhead, I expect that means a net of $45M), but there have certainly been less successful titles that were considered successful. Kingdoms of Amalur has outsold both of The Witcher games, and that series is not considered a commercial failure (the third title is in development now). Dragon Age II has only sold about 1.9M units, and it was a sequel to a critically-acclaimed BioWare game.
I've played neither Skyrim nor Amalur (nor the Witcher games), but I've seen a bunch of folks that seem to like Amalur alright and given Bethesda's time-to-market, a sequel to Amalur could definitely do well absent of the shadow of a sixth Elder Scrolls title.
It was OK. I enjoyed it but
It was OK. I enjoyed it but sold it when I was done.
PS Adam
Missed a headline: Boston pitchers finding new ways to screw over New England lately
Edit more info: http://deadspin.com/5910569/curt-schillings-video-...
Seems he's been getting investment tips from Romney. I wouldn't doubt if he made money on this "investment".
38 Studios has paid back to
38 Studios has paid back to Curt the $4 Million he used to startup.
Channel 10 has more
http://www2.turnto10.com/business/2012/may/15/10/c...
Romney
ahh, the Romney investment strategy™!
Small down payment, take out huge loan (debt), pay back self +300% from loan, have company file for bankruptcy when they can't make good on loan leaving the rest on the taxpayer dime. Congratulation, like Bain Capital you just made an obscene profit on a failed investment.
They missed a loan payment in May of 1.125 million. Maybe Curt should toss that 4 mill into the pot?
can't wait
To see how amusingly bitter you are after Obama loses in November.
i notice you think of it as
i notice you think of it as Obama losing rather than Romney winning......
yawn
Curt's next spin
"See, government has no business being in business."
Government should stay out of picking winners and losers and just make the rules and enforce them. Solar energy, tax breaks on real estate for wealthy insurance companies, loans to software start-ups - you have to be an idiot to make these offers when the private sector wouldn't touch that stuff with a 10 foot pole.
I don't criticize the investment guys - government needs to get smarter to stay a step ahead of them. Curt (and Romney) didn't do anything illegal. Kind of the inverse of Warren claiming she has no obligation to pay higher taxes but that rich people like her should pay more taxes, yet she won't until the rules make her.
All these people should put their money where their big mouths are. But that won't happen.
Kinda like the same, really
Curt and his ilk claim that the government should get out of the business of picking winners and losers, and stop giving handouts, but they will elbow their way to the front of the line every time to get those handouts.
They want rules to prevent people like them from doing the things they do. But until that happens, they're thrilled to do it. It's very much the same.
Hi sock puppet
Was that you in the McDonald's you tube video singing about Big Macs? When can we expect to see you on "The Voice"? :-)
Look for me soon
I'm about to score a great government loan to finance my recording studio. Then I'll move all my stuff to the Caymans and declare bankruptcy.
My houseboy in Paris calls that move the "Bain Quotidien." I don't know why.
Government can't help itself
I concur! Keep the government out of my bedr... I mean, out of business.
What everyone wants (EVERYONE) is a fair and even playing field, and giving cash or credits to certain industries makes it unfair to everyone else.
Once you make this argument, of course, then everyone starts talking about exceptions to the rule (for example, should non-profits be exempt from property taxes) but the rule is still a valid one.
I don't fault anyone for asking for a handout or special treatment, but we hire our elected officials to be wise enough to know when to say no.
The rest of your comment
The rest of your comment aside, I have to take issue with this:
"you have to be an idiot to make these offers when the private sector wouldn't touch that stuff with a 10 foot pole."
The private sector's whims and willingness to pursue low-hanging fruit should not be the ultimate driving factor of whether or not society advances.
I mean, why on earth would we ever go to the moon? That's not profitable at all.
Oh wait, it was profitable for all the private business that gained benefits from the research and development that was done, as well as the economic stimulus of employing people who begin receiving incomes which they spend on private sector goods and services, raising tax revenue.
There's a certain problem with the conservative idea of trying to evaluate the efficiency of all these systems in a bubble. I seem to recall that a Bush Jr-administration study concluded that the federal Interstate system is currently at a return rate of 12-to-1 on investment dollars, including upkeep, and that number continues to grow.
Does that mean Rhode Island should have invested public funds in a video game studio? Of course not, but let's not paint everything with the same brush, shall we?
Two different things
It's fundamental research (like NASA or a grant to say MIT) versus investment in private companies. It's also a difference between providing a targeted grant and taking an equity or debt position in a specific company. Giving Boeing $100 million to investigate and research an expeerimental fuel efficient wing technology for the military that may eventually have commmercial applications is vastly different from lending Joe Solar Startup $100 million to build a factory to make solar panels with current technology and zero competitive advantage.
It's also a function of whether or not the country or state has the money to spend - we don't and RI, in this case, is a giant economic basket case that had zero business making this deal. At most they could have afforded maybe some tax breaks and the utility of those are highly questionable, but a one off $75 million loan to a company that had never sold anything is moronic - not just for a government - but for a VC or private equity company as well. You need a broad strategy and a diversified portfolio for this kind of investing to say nothing of experts in the industry to determine if these guys have a fighting chance to begin with.
Who knows - maybe they'll be like FedEx that only survived their early years by hiding planes from marshalls trying to repossess them and one day they too will be an HBS case study. I tend to doubt it. The only case study here is another example of why government continues to shoot themselves in the foot propping up weak businesses or handing out favors to the connected few that don't need them.
Maybe
But I've long wondered why Energy isn't talked about in terms of national security and not just a domestic consumer product. Energy drives everything, and it's vital to our stability and security. The government has a vested interest in keeping it cheap and to proliferate new sources of it, regardless of it's consumer function.
The military itself has wised up to it and is going on a major green / new energy bend trying to procure and secure new sources of energy besides just fossil fuels.
I agree with you for other strictly consumer markets, but things like finance, energy, telecommunication, healthcare, ect are very intertwined with government and national security. Gov can't and shouldn't just stay hands off, because these industries can just as easily free market themselves into a black holes.
In a perfect libertarian world we let the banks fail and eat a 11% contraction of GDP overnight and cross our fingers it doesn't cascade, just to point a finger and say moral hazard worked! In reality, sales of pitchforks and guillotines would be the best new consumer market besides canned food and ammo. Government is supposed to be a counterbalances to some of the worst excesses of our capitalist system.
But too often than not they're just colluding with one another.
Why not let the big banks fail?
Wouldn't we actually be a lot better off without Bank of America, Citicorp, JP Morgan Chase, and Wells Fargo? There are plenty of local and regional banks to take our deposits and make loans if these bloated monstrosities are allowed to fail and be broken up into the small pieces they were assembled from.
It's wishful thinking, but
It's wishful thinking, but the problem is that if those institutions suddenly fail, then who's left to issue credit to other businesses and institutions? Y'know, such as the company you work for? The local and regional banks don't have anywhere near enough operating capital to cover the difference, and they may very well be over-leveraged as it is (for example, 15 dollars lent to 1 dollar actually owned). They borrow from the big banks too.
Most business operations work with a manageable amount of operating debt. It's generally considered to be a bad business move to have an excess of cash-on-hand - see for example the kerfuffle last year with Apple not offering dividends to stockholders.
If I manufacture a product and sell it to someone, I usually have to outlay the cash on the construction of that product and payment of salaries and administrative costs before I get payment.
That's to say nothing of the housing market.
Letting the banks fail sounds fun, but the collateral damage to the economy is almost unimaginable. We need better ways to prevent this from happening, and different ideas on how to punish violations.
Certainly there are a number
Certainly there are a number or examples of good government investment in private companies.
It's no accident that the U.S. Airline and aircraft manufacturing capacity was around to produce the aircraft that it did. Airmail contracts, which included flying 1st class mail by air, subsidized those businesses.
Some of us of course remember the post office delivering mail with Chrysler K-cars and Jeeps which followed USPS Ford Pintos. Sadly the scale of economy and infrastructure improvements that a Post Office of electric vehicles won't happen in today's leaner, meaner (read lack of investment) society.
The Government should be investing in new technologies. It's unfortunate that the present administration's political naivete allowed themselves to get it's solar investment hung around it's neck because these investments are vitally important.
But let's not kid ourselves, any government subsidizing a baseball player's video game company is not a good investment, not is it a public works program (Rhode Island has one of the nation's highest unemployment rates), it is simply an example of how enamored we are with sports figures.
Back in the good old days, Ted Williams became a spokesman for Sears & Roebuck fishing equipment when he retired - a win/win for everyone.