If Curt Shilling did not like the terms of the loan, THEN DON'T TAKE OUT THE LOAN.

It's the same attitude (to cross the streams) that the players who took steroids justified it: I'm working as or more hard than the 'other guy', so what I'm doing is ok.

Schilling doesn't view it as welfare because he and his company ARE (or were, I suppose) working hard every day. Welfare is for lazy people who sit around and get paid to watch Jerry Spring all day -- or so he'd say. Just as Bonds probably justified whatever he was taking as being ok because whatever he was likely on allowed him to work out harder and more efficiently than a random player.

It's their extra effort that allows them to justify these decisions in whatever worldview they have.

Lenny Dykstra feels your pain.

If you're wondering how this all ends, the answer is: on your TV, with Curt Schilling sitting in a boardroom being lectured by Donald Trump.

If you're wondering how this all ends, the answer is: on your TV, with Curt Schilling sitting in a boardroom being lectured by Donald Trump.

My opinion on drone strikes has suddenly changed.

I really want to like Curt Schilling. He was a tremendously smart pitcher with impeccable control, which always made his starts fun to watch. He won some of the most important games in Boston Red Sox history. He was good at playfully taunting other clubs and other clubs' fans, he has some intelligent things to say about pitching, and he's a huge nerd who loves video games.

I'll be nice here, and just say that if I lost millions of dollars and saw my dreams die in front of my eyes, I'd also probably whine and complain in a manner that doesn't stand up to logical scrutiny.

Shilling also is now claiming he spent $50 million of his own money. He'll spend $70 million of his own money at this rate by next Monday.

Edit: Since I'm tired of talking about Shilling, lets talk about noted Yankee homer, Athony Bourdain. He's leaving the Travel channel for cnn, and taking his production crew with him.

If he has lost it all (or most of it), wow. I love risk takers, but it's not a bad idea to salt away something for a rainy day.

At least he could make a decent living in media as a color commentator, NESN needs to figure out a way to make him stop talking every now and then though.

Shilling also is now claiming he spent $50 million of his own money. He'll spend $70 million of his own money at this rate by next Monday.

You're talking about the guy that spent $90 million of his own money!? COME ON!

It must be horrible, the way that Rhode Island forced him to relocate and take a huge loan.

I'm sorry things didn't work out for his company, and for his game, but I have a lot more concern for the welfare of the individual employees who now don't have a job and don't necessarily have all that much in the way of cash to fall back on, than I do for Schilling. Even if he lost a ton of money, he's not going to lose his house, and can easily make ends meet by just calling up whatever sports station is in the area and asking for a job as a high-priced talking head.

Setting aside his level of investment for the moment, I'd really wish they could have gotten a comment about the passing of 2nd mortgages to employees whose houses they claimed to have sold, and why the state was not notified in advance as required by Federal law of the layoffs

http://www.theverge.com/gaming/2012/5/25/3043282/38-studios-downfall-leads-to-second-mortgages-for-some-employees

http://www.necn.com/05/25/12/38-Studios-back-in-default/landing.html?blockID=714302&feedID=4753

From the second link, "Chafee also disputed repeated claims by Schilling - who earned $114 million as a professional ballplayer, including his 2004 World Series victory with the Boston Red Sox - that Schilling has put $30 million of his own funds into 38 Studios.

Chafee said that claim is "difficult to document" based on what auditors have been able to see so far, and "that's why it's so important to do that audit."

Anybody know how large a pension he gets from MLB?

From what I've read, it seems like the film tax credits Schilling says was promised to his company were not a part of the terms of the loan. The state claims that that while additional tax credits had been discussed, nothing was promised and, most importantly, there's nothing in writing about them.

You're talking about the guy that spent $90 million of his own money!? COME ON!

Nice work, Gob.

Why was he getting film tax credits for a video game, anyway? They're totally different products - it's not like he was remaking "Night Trap" here...

I'm just at a total loss why anyone, wherever they are on the political spectrum, thought subsidizing video games was a valid governmental function. What's next, a Pavement subsidy?

I suppose states and cities want to create the new Silicon Valley.

If it helps to steal jobs from Massachusetts, then of course it is a valid government function.

Why was he getting film tax credits for a video game, anyway? They're totally different products - it's not like he was remaking "Night Trap" here...

"Media"

Curt could have got a much sweeter deal in LA/TX and he wouldn't have had to pay jack-squat back.

I'm just at a total loss why anyone, wherever they are on the political spectrum, thought subsidizing video games was a valid governmental function. What's next, a Pavement subsidy?

Video games are big business. If you support the idea of government providing tax benefits to business in a job creation goal then I think 38 Studios probably made as much sense as any other business would.

I'm not of that particular political mindset (like many here) but the video game industry is legitimately a big money maker and belongs with other industries receiving benefits if you believe in that method of economic stimulus.

That, and a physical permament business in your state is probably more diserable over a film that only spends a month at most in your state.

True, but SSD is right about why "film" credits. The lines between film/tv and video games have blurred tremendously (just ask IMDB).

The lines between film/tv and video games have blurred tremendously (just ask IMDB).

Do you have an opportunity to make choices that affect the ongoing narrative?

No, wait, that doesn't work...

I really, really like Schilling and in fact I'm kind of hoping in the back of my mind (okay, I guess now it's moved to the front) that this incident moderates his political views. Not to get too down on conservatives but there is a certain segment of people who have never really faced adversity that they were not able to overcome. These people were able to overcome their situations through a combination of hard work and luck. I don't want to undervalue the importance of hard work in these cases - there have been plenty of people with the natural talents of Schilling who didn't work as hard as he did to nail them down - but sometimes all it takes for someone who has been in this situation all their lives to change their POV is to experience this kind of soul-crushing defeat for themselves.

But going further, I really think that politics are a small part of a person unless they want to make it a larger part, and that is sometimes a bigger deal with the person's character than the actual politics themselves. If Schilling emerges from this still defending the Free Market, I'll be disappointed but unless it turns him into some sort of bitter, ranting Paulite I'll just continue to focus more on the things #6 talked about.

For those catching up, CNN Money recaps the history of 38 Studios and the deal with Rhode Island. Notable excerpts:

The goal was noble: Rhode Island suffers from the second-highest unemployment rate in the nation -- 11.2% -- and has struggled to attract companies, which often prefer its northern neighbor Massachusetts. The pitch to politicians and taxpayers was that a big video game venture would help catalyze a local technology hub.

The loan was not popular with taxpayers. A poll done in September 2010 by CBS affiliate WPRI-TV found 54% of Rhode Islanders opposed the loan, versus 28% in favor. All candidates in the 2010 governor's election publicly opposed the deal, including current Governor Lincoln Chafee.

"The whole idea was flawed from the start," says Kevin Dent, a 14-year veteran of the industry who funds start-up video game companies.

"MMOs are the third rail of the industry. Even established publishers get into trouble with MMOs," he says. "The latest good product, Star Wars: The Old Republic, Electronic Arts spent $200 million to develop plus $80 million for post-launch content and support. Then they spent $50 million on marketing. You cannot make a MMO for $75 million. Rhode Island didn't do their due diligence."

Not noted in the article, but former Governor Donald Carcieri, who pushed the deal through, has thus far declined to make any statements regarding 38 Studios.

Video games are big business. If you support the idea of government providing tax benefits to business in a job creation goal then I think 38 Studios probably made as much sense as any other business would.

Is that true, though? I mean, video games are definitely big business, but I would guess they employ relatively few people, and many of those are likely to be highly mobile: a) not that many are likely to settle in your state permanently, because there aren't a lot of other game companies there AFAIK, and b) quite a few contributors to game development are ideal telecommuters. Plus, workforces tend to scale up and down depending on project lifecycle - you don't need many testers during the design phase - so if you're not careful, the least-employable end up unemployed again after a big project delivers.

Prestige-wise, I guess digging up the next Valve or Infinity Ward sounds great. In terms of number of jobs and amount of taxable income . . . not so sure.

Also, this:

38 Studios is a limited liability company organized under Delaware law, according to records at the secretary of state's office reviewed by WPRI.com. The company did register its business in Rhode Island in September 2010, but did so as an out-of-state LLC.

Rhode Island's tax credit law explicitly states that productions are only eligible to receive credits if the business in question is "formed under the laws of the state of Rhode Island."

38 Studios is registered as a Delaware-based entity.

Well, as we've seen up here in "Silicon Valley North" (the Seattle area), having a base of people who know how to code makes this a really nice place for tech companies to come and live. Granted, this has a *lot* more to do with years and years of money being pumped into our universities' technology departments (Senators Scoop Jackson and Warren Magnuson, as notorious as they were for "bringing home the bacon", did a hell of a job in transforming the University of Washington into a top-20 school, probably top 10 or top 5 in computer science) and the emergence of Microsoft than one single loan pushed out to an MMO developer. As part of a larger program to entice tech companies to go to Rhode Island, though, I don't think it's the worst idea in the world.

ETA: Actually, the U-dub is 9th by the latest rankings, ahead of Yale and 4 other Ivy League schools. And as noted, that's overall; its computer science school is one of the things driving it into that ranking.

http://www.4icu.org/top200/

Wow, that "the money I took from the government went back into the economy, so it's not welfare" is astoundingly idiotic even for a conservative.

Does he honestly believe that the people he would consider to be "actual" welfare recipients are hoarding the money they get? ########. It goes right back into the economy faster than Schilling could say "lucky ducky welfare queen".

The company did register its business in Rhode Island in September 2010, but did so as an out-of-state LLC.

Heh, awesome.

even if he did put in $50M, if that's all he saved out of $114M as a player (we're not even talking endorsements in that figure) he was nobody I'd trust to handle money responsibly.

What's next, a Pavement subsidy?

Can you treat it like an oil well. When it's underground, out of sight?

Can someone here explain why so many business incorporate in Delaware? I mean, I assume it's favorable liability laws or tax laws or somesuch, but I've always wondered why.

Surprise! RI can just stiff everybody that bought the bonds if they want to.

http://articles.boston.com/2012-05-26/opinion/31849817_1_moral-obligation-studios-loan-guarantee

Does he honestly believe that the people he would consider to be "actual" welfare recipients are hoarding the money they get?

This is exactly why raising the minimum wage is an excellent way of stimulating the economy - people earning minimum wage can't afford to save anything. They spend it all (on basic necessities), so all the money goes right back into the economy. Nothing boosts an economy like raising up the spending power of the lowest earners.

"MMOs are the third rail of the industry.

I had never seen this expression...I take it it means something along the lines of it's "too hot to touch," and not "provides the power that drives the entire train."

It means the third rail of the subway (not the two the wheels run on) is electrified and you will die instantly if you touch it.

"Social Security is often referred to as the third rail of American Politics" for example.

Can someone here explain why so many business incorporate in Delaware? I mean, I assume it's favorable liability laws or tax laws or somesuch, but I've always wondered why

Laws AND taxes. From Wiki:

Because of the extensive experience of the Delaware courts, Delaware has a more well-developed body of case law than other states, which serves to give corporations and their counsel greater guidance on matters of corporate governance and transaction liability issues. Disputes over the internal affairs of Delaware corporations are usually filed in the Delaware Court of Chancery, which is a separate court of equity[2] (as opposed to a court of law). Because it is a court of equity, there are no juries, and its cases are heard by the judges, called chancellors. Since 1989, the court has consisted of one Chancellor and four Vice Chancellors. The court is a trial court, with one chancellor hearing each case. Litigants may appeal final decisions of the Court of Chancery to the Delaware Supreme Court.

Delaware has also attracted some major credit card banks because of its relaxed rules regarding interest. Many U.S. states have usury laws limiting the amount of interest a lender can charge. Federal law allows a national bank to "import" these laws from the state in which its principal office is located.[3] Delaware (amongst others) has relatively relaxed interest laws, so several national banks have decided to locate their principal office in Delaware. National banks are, however, corporations formed under federal law, not Delaware law. A corporation formed under Delaware state law benefits from the relaxed interest rules to the extent it conducts business in Delaware, but is subject to restrictions of other states' laws if it conducts business in other states.

Pursuant to the "internal affairs doctrine", corporations which act in more than one state are subject only to the laws of their state of incorporation with regard to the regulation of the internal affairs of the corporation.[4] As a result, Delaware corporations are subject almost exclusively to Delaware law, even when they do business in other states. Among other reasons, this contributes to Delaware's attractiveness as a state of incorporation.[5]

While most states require a for-profit corporation to have at least one director and two officers, Delaware laws do not have this restriction. All offices may be held by a single person who also can be the sole shareholder. The person, who does not need to be US citizen or resident, may also operate anonymously.

Delaware charges no income tax on corporations not operating within the state, so taking advantage of Delaware's other benefits does not result in an income tax cost. That said, Delaware has a particularly aggressive tax on banks that locate in the state.[citation needed] However, in general, the state is viewed as a positive location for corporate tax purposes because favorable laws of incorporation allow companies to minimize the corporate expenditures (achieved through legal standardization of corporate legal processes), creating a nucleus in Delaware with operating companies often in other states.[5]

In addition, Delaware has used its position as the state of incorporation to generate revenue from its abandoned and unclaimed property laws. Under U.S. Supreme Court precedent, a state of incorporation gets to keep any abandoned and unclaimed property, such as uncashed checks and unredeemed gift certificates, if the corporation does not have information about the location of the owner of the property.[6] Delaware is becoming increasingly aggressive in auditing and assessing companies for unclaimed property. For example, it has deputized sister states to act as contingency fee auditors for unclaimed property.

A state may levy, however, a franchise tax on the corporations incorporated in it. Franchise taxes in Delaware are actually far higher than in most other states which typically charge little or nothing beyond corporate income taxes on the portion of the corporation's business done in that state. Delaware's franchise taxes supply about one-fifth of its state revenue.[7]

What's next, a Pavement subsidy?

I'm sick of the forms
I'm sick of being misread
By men in Dashikis
and their leftist weeklies

even if he did put in $50M, if that's all he saved out of $114M as a player (we're not even talking endorsements in that figure) he was nobody I'd trust to handle money responsibly.

Huh?

$114M - 40% plus of that gone to taxes.
More to an agent.

It's not crazy.

I remember reading in 38 Studios article that the main reason Shilling wanted the tax credits, so he can in turn sell them to another company. I don't think he even sees the irony there.

$114M - 40% plus of that gone to taxes.
More to an agent.

It's not crazy.

Not to mention that how one handles a sudden personal fortune may not match how someone would manage a business.

If I run a small business, I know how to manage expansion, expenditures, etc.

If I suddenly get a multi-million dollar chunk of money personally, I'm buying a big house, a boat, and a couple of nice cars, because I bloody well want them. If that means I only have a few tens of millions of dollars left over, I'm good with that.

Of course, I won't take the remainder and dump it into some crazy business venture, but there you are.

Shilling also is now claiming he spent $50 million of his own money. He'll spend $70 million of his own money at this rate by next Monday.

We don't know that anything about this is contradictory. Any reference to Schilling investing $20 or $30 Million could be from a year or two ago. Per the link in 25, 38 Studios was going through about $4 Million per month. $50 Million would cover just over a year. It's also important to note that while there was a loan guarantee of $75 Million, $25 Million of that had not yet been disbursed to the company.

and why the state was not notified in advance as required by Federal law of the layoffs

This is just my speculation, but my guess is they had no intent of laying off anybody. Schilling had a plan to get a $35 million investment, and it sounded like he was assuming he would get tax credits, which I believe could have amounted to up to $18 million. The credits and the investment would have paid for a years worth of expenses. That doesn't leave almost anything for promoting the game, and there is certainly reason to question whether the game would have been ready a year from now, as many MMOs seem to be delayed from initial projections. But it does sound like there was a plan to keep the company going for a year (it does seem like there were faults in that plan, as 27 seems to indicate the tax credits wouldn't be coming).

In terms of number of jobs and amount of taxable income . . . not so sure.

I believe that in order to get the full $75 million loan, 38 Studios had to have 450 employees in RI. As far as cycle with MMOs, I don't have full knowledge, but I don't know much decline of workforce there is. There will be bugs to fix, plus the company could start working on an expansion.

It's also important to note that while there was a loan guarantee of $75 Million, $25 Million of that had not yet been disbursed to the company.

I believe that in order to get the full $75 million loan, 38 Studios had to have 450 employees in RI.

Thank you for coming along and adding some critical details that, somehow, never seem to get mentioned in the press. :)

It certainly explains why they'd expand as much as they did, though that's kind of a troublesome way to secure financing IMO.

I am quite sure your speculation regarding the layoffs is accurate, certainly in in the larger sense. But Chafee said earlier the state probably could not turn down 38 Studios request for another 6m in tax credits once they paid the 1.1M due. Laying people off put them right back in technical default, which handed the state a reason to deny the credits.

//and as far as the very latest coverage in painstaking detail, this is the place to be - http://blogs.wpri.com/tag/38-studios/

And 50M was the max they were going to get from the 75 apparently. the state borrowed 75, gave Curt 50, and put 24 in an interest account to pay the bonds it issued, which will offset some of the taxpayer obligation.

http://blogs.wpri.com/2012/05/15/ri-taxpayers-actually-on-the-hook-for-112-6m-with-38-studios/

"It’s worth noting that about $23.4 million from the original $75 million loan was set aside as a reserve to pay the bonds back, so there’s some money available in addition to whatever taxpayers fork over.

Standard & Poor’s affirmed its A rating on the 38 Studios bonds, with a stable outlook, on April 20. Asked about this week’s developments, a spokesman for the rating agency told WPRI.com its analysts do not comment on rumors. The bonds are insured by Assured Guaranty Ltd.

Update: Just to clarify, Rhode Islanders are on the hook for $112.6 million in principal and interest payments on the 38 Studios bonds between now and 2020, but not every dime will need to come from taxpayers. As I mentioned above, $23.4 million was set aside in case something went wrong. Subtracting the $23.4 million from the $112.6 million total bill would put Rhode Island taxpayers’ direct tab at around $89.2 million."

Actually, the U-dub is 9th by the latest rankings, ahead of Yale and 4 other Ivy League schools. And as noted, that's overall; its computer science school is one of the things driving it into that ranking.

As a UW grad, I'd love to think that I'm an alum of the 9th-ranked university in the world, but what you're citing there is its rank in university website popularity.

ETA: Actually, the U-dub is 9th by the latest rankings, ahead of Yale and 4 other Ivy League schools. And as noted, that's overall; its computer science school is one of the things driving it into that ranking.

Dude, you linked to a ranking system that is based on google hits.

ARWU has UWash as the #22 CS department in the world: http://www.arwu.org/SubjectCS2010.jsp

coke to teddy F.

Wow, that "the money I took from the government went back into the economy, so it's not welfare" is astoundingly idiotic even for a conservative.

Does he honestly believe that the people he would consider to be "actual" welfare recipients are hoarding the money they get? ########. It goes right back into the economy faster than Schilling could say "lucky ducky welfare queen".

If he's like (some of) the conservatives I know he thinks they spend it on crack or pot or booze...

I know many many many people who *hate* what they believe "welfare" to be, and yet who have no trouble whatsoever with:

Unemployment compensation
Social Security

some have no issue with the following (but some do):
Disability
Workman's Comp
(Some people believe that fraud is so prevalent that any good that comes from such "programs" is outweighed by the good)

At a family gathering a few months ago, I mentioned feeling bad for the utterly ridiculous debt loads being taken out by students nowadays, especially grad students... I swear to god everyone over 50 and under 80 (except one whose daughter is in college), had the following reaction, "I don't care how much, they dam well better pay it back," some added stuff like, "It took me 7 years because I had to work dammit"- what really got me was the visceral anger some had at the very idea that I felt bad for debt loaded 20-30 somethings...

The people in my generation (born mid 60s), had trouble paying down student debts, we had more of it than the preceding generation, and our entry level job market was not as good as the preceding generation, now for the generation born around the mid 80s the debt load is much worse than my generation and the job market is also much worse, but the ####ing baby boomers seem utterly incapable of noticing such a change in economic/social conditions...