I haven’t had much time to focus on the debacle unfolding in my home State of Rhode Island and Providence Plantations over loan guarantees to a company owned by former Red Sox pitcher Curt Schilling.
This Bloomberg story has the latest:
Curt Schilling, pitching ace on the 2004 Boston team that won baseball’s World Series, may leave Rhode Island on the hook for $75 million of bonds sold to help lure his video game company to the state.
The former Red Sox fireballer yesterday asked the state for extra time after the Providence-based venture failed to make a $1.1 million payment to cash-strapped Rhode Island’s economic-development arm.
Schilling, 45, last year moved the company, 38 Studios LLC, from Massachusetts after Rhode Island lent $75 million from the proceeds of a debt sale in exchange for a promise to create hundreds of jobs. The state may be forced to repay the bonds if the company defaults on the loan, according to securities filings.
DrewM at AceOfSpadesHQ sums up the “what were they thinking” aspect of this:
450 people? To design a video game? I worked in the industry about 10 years ago on a game that became really popular and was sold to a major company for a metric butt-load of money (not that I got any of that). If there were ever more than 30 people working there I’d be shocked and they never got anywhere near $75 million in cash until they sold out.
Of course Schilling’s company only ever had 288 people working there anyway. 288 people? On development? For a game not even ready for preview at E3? Oh dear God! …
People in government don’t even know how to run a government. Why do they think they are qualified to be investors?
Via The Boston Herald:
As bad as Solyndra was for the U.S., it’s far worse for a small state like Rhode Island.