Curt Schilling, former pitcher for the Boston Red Sox and head of the bankrupt 38 Studios said this morning that the failure of the company had left him “tapped out” financially, and had effectively wiped out the money he had earned during his nineteen year Major League Baseball career.
In case you’re not familiar with the situation, here’s the short version: upon his retirement from the Red Sox in 2007 Schilling, an avid gamer, founded 38 Studios (originally called Green Monster Games, after Fenway’s famed left field wall). In 2010 Schilling struck a deal with the government of Rhode Island to move the company there. Part of the deal included a $75 million loan from the state government.
Despite the success of 38 Studios’s first game, Kingdoms of Amalur: Reckoning, the company informed the state on May 1st that it would not be able to make it’s first loan repayment of $1.125 million. Just before the end of May, 38 Studios employees – all 300 of them – received an email saying that the company would not be able to meet payroll, and they were being laid off. The aftermath of the fiasco has included an acrimonious blame game between the governor of Rhode Island governor Lincoln Chafee and Schilling, and rumblings about investigations into 38 Studios and Schilling personally.
Schilling made an appearance on WEEI radio Boston’s Dennis & Callahan show this morning. In the interview, his first since this ordeal began, Schilling acted fairly humble and contrite over the situation, no small feat for the normally outspoken former pitcher. Schilling repeatedly expressed regret at the way the employees were treated during the ordeal, saying that they were “blindsided,” and that “they didn’t deserve it.”
Schilling also continued a bit of the blame game between himself and Governor Lincoln. When asked what happened to the company business-wise to cause it to fail, he cited a failure to raise capital. Despite the unexpected success of the studio’s first game, negotiations for a $35 million distribution deal fell apart overnight following public remarks by Governor Lincoln expressing concern over keeping the company solvent. The deal’s collapse left the company strapped for cash and unable to meet its obligations.
What’s more, it turns out that 38 Studios wasn’t the only party strapped for cash. Schilling himself had made a $50 million investment in the company. With 38 Studios’s failure, that investment is now gone. Though he did not know for certain how much he had lost, Schilling told the show that “I’m tapped out. I put everything in my name in this company.” He went on to say that he’d been forced to tell his family, “the money I saved and earned playing baseball was probably all gone… Life is going to be different.”
With Rhode Island taxpayers on the hook for $75 million and most of 38 Studios’s employees still looking for work, the company’s collapse remains a huge mess that, the effects of which will likely be felt by those involved for a long time yet.