“How do we avoid throwing good money after bad?”

The trick is simple, just learn to say "no", "no ####### way", "We regret to inform you that we have decided to decline the opportunity to participate in this investment" or something to the same effect.

It's a loaded question if you consider that the failure of 38 Studios would put the state's taxpayers on the hook for more than $112 million.

Why?

Also: Go figure, when it comes down to it, conservative ####### is actually a commie pinko socialist. Whodathunkit.

Remember, Curt: It's not welfare when the money goes to someone you like or someone like you.

What the hell?

Why?

Seems like there was bond issue for those $75M that RI are responsible for if 38 Studios goes under, it will cost $112M until 2020 to pay off.

I'm waiting for someone to post a Nigerian 419 scam letter signed by Curt Schilling.

Dear Sir,

Until the recent War of the Arborean Mages, my paternal uncle was the Minister of Treant Sap Harvesting for the entire Kingdom of Sylvandale. He has a sum of 9,300,000 (nine million three hundred thousand) gold pieces, but is unable to get them out of the late Kingdom due to bureaucratic red tape imposed by the gnomes.

If Rhode Island refuses to gift Curt a boost, maybe this petard can be of help?

http://www.weei.com/sports/boston/baseball/red-sox/kirk-minihane/2012/05/16/hypocrisy-curt-schilling

Money quote:

"There can be no question our country is in the worst economic crisis of our lifetimes. I also think there can be no question that it falls on us, the individuals, to find a way out of our own personal crisis." -- Curt Schilling, February 2011

I also think there can be no question that it falls on us, the individuals, to find a way out of our own personal crisis.

Well, yeah, its clear that the residents of Rhode Island need to find a way out of their personal crisis caused by the failure of 38 Studios.

I'm horrified at the attitude you parasites are taking towards one of our valuable job creators. Keep it up hippies, you'll force them to Go Galt and then you'll be sorry.

Rhode Island threw $112 million at Schilling.

Boston threw $140 million at Carl Crawford.

Advantage, Rhode Island.

Not on a per capita basis.

There has been a fair amount of speculation on this site about what Curt Schilling's post baseball life would look like. Who would have guessed Lenny Dykstra?

I don't know anything about either end of this deal - the computer gaming world or the public finance world - but this thing confounds me. Why would they need that much money to create a single game? Why would a state give that much money to a unproven gaming company?

There has been a fair amount of speculation on this site about what Curt Schilling's post baseball life would look like. Who would have guessed Lenny Dykstra?

Schilling is an opportunistic hypocrite, not a criminal nor a liar. The dummies in Rhode Island begged for the opportunity to throw money at his speculative startup, and got what they deserved.

Why would a state give that much money to a unproven gaming company

This is my question as well. Given who Schilling is, the state in question, how govt is, etc, I can see 10 million or so. But according to the guy who wrote the article Darren linked:

(the $75 million represented more than half of Rhode Island's new job creation program).

Emphasis mine.

I don't know anything about either end of this deal - the computer gaming world or the public finance world - but this thing confounds me. Why would they need that much money to create a single game? Why would a state give that much money to a unproven gaming company?

Because, for their first game, they decided to make a AAA title and hired lots of "name" people to make it. They also started off making an MMO then switched it half-way through development to a single player game. The end result was a painfully average and eminently forgettable game.

They also started off making an MMO then switched it half-way through development to a single player game.

The MMO is still in development, although the stage its at isn't known.

As far as the money, as noted in the other thread on this, $75 Million isn't out of line with the budget for a major MMO.

So I guess Schilling IS Lenny Dykstra's teammate afterall...

They also acquired another gaming company. I don't know the details -- whether they paid cash or stock, whether the target was cash flow positive, etc. But they would not be the first company to be done in by a bad acquisition.

although the stage its at isn't known.

Unless "overdue" is a stage.

Why would a state give that much money to a unproven gaming company?

Probably because it's Curt Schilling and they didn't want to say no.

There's probably not many companies willing to relocate to Rhode Island--they have the second highest unemployment rate of any state in the country, 11.1%. But $75 million to bring 288 jobs to the state is a lot of money ($260k per job). The idea is that you're only guaranteeing the loan, the company pays you guarantee fees, and you don't expect to ever have to actually pay out on that guarantee. Plus the jobs are supposed to stick around even after the loan is paid off. However, a start-up, let alone a start-up video game maker owned by someone with no experience running a company or working in the industry, is a terrible place for the state to use those dollars given the high risk of default (and probably low recovery rate in the event of default, although that part I'm less sure of).

Yeah, as stated in the other thread, $75m isn't totally outrageous for a top-flight MMO, but to hand to a startup with no real assets, experience or IP, it's a bit out of hand.

I don't feel all that sorry for Rhode Island, because (IMO) this isn't the sort of thing government ought to be doing (providing capital to private enterprise), but I realize there are all kinds of ways governments can do this with tax waivers/credits, zoning changes, and the like, and I realize the reality is this will continue to go on, so I'm not a total hardliner with my sympathy.

Schilling's hypocrisy makes it more amusing, no doubt. But taxpayers are funny. For example, I live in a very conservative/Republican area (suburban middle class+). My neighbors routinely put signs for Republican candidates in their yards, and love to go on about tax-and-spend Democrats. (Disclaimer: I am neither.) But then the local government floated a proposition to build a water park with pools, big water slides, and the like. All funded by the taxpayer. Residents would get a discount on admission, of course. I opposed this because I don't think tax dollars should build theme parks, particularly when we have a very large commercial theme park in our town, complete with its own water park. My neighbors could not understand why I did not support the proposition. "But don't you want a water park to take your kids to?" I was asked. "Sure," I replied, "but shouldn't a private company build one if it's commercially viable? I thought you opposed tax-and-spend government." He couldn't even make the connection.

It was weird.

And I don't tell this story to single out Republicans, as Democrats have been known to do similar stuff. People are complicated.

I had a point, but I'll be damned if I can remember what it is now. :D

And I don't tell this story to single out Republicans, as Democrats have been known to do similar stuff. People are complicated.

Not really. People are just self-interested. Now bees, those ####### are complicated. They can make honey with their butts and can tell other bees precise directional coordinates as well as other information through subtle dance moves and they only live a couple of weeks at a time. I'm telling you, bees kick our asses!

I'm telling you, bees kick our asses!

Instead of turning this into a soapbox for apiary supremacists, we could make it the Donna Summer thread. Disco > Punk!

I second the bee thing and extend it to ants.

But I thought $100M was how much it cost to make an MMO. Major console and MMO releases are essentially movies in terms of budget. In 20 years there probably won't be a real distinction. Not sure if that is after Order Hymenoptera becomes our overlords or is simply the trigger that causes it.

Are you gonna release the hounds, or the bees, or the hounds with bees in their mouths so everytime they bark at you they shoot bees at you?

Yeah, as stated in the other thread, $75m isn't totally outrageous for a top-flight MMO, but to hand to a startup with no real assets, experience or IP, it's a bit out of hand.

Not to mention the fact that it was half their stimulus budget. It feels like they put a naive optimist ("What can go wrong? Of course they'll succeeed") and a vindictive small government guy ("Let's show the evils of spending by crippling the state!") in the same room and made this happen.

a vindictive small government guy ("Let's show the evils of spending by crippling the state!")

Maybe it's that boss guy from Parks and Rec.

Schilling's not a hypocrite for taking the deal. States compete for businesses, and Rhode Island got exactly what it bargained for. Blame Rhode Island for offering a sweetheart deal to a startup company.

Schilling's not a hypocrite for taking the deal. States compete for businesses, and Rhode Island got exactly what it bargained for. Blame Rhode Island for offering a sweetheart deal to a startup company.

I'm not willing to let an incompetent businessman given taxpayer money off the hook that easy.

Schilling's not a hypocrite for taking the deal. States compete for businesses, and Rhode Island got exactly what it bargained for. Blame Rhode Island for offering a sweetheart deal to a startup company.

I do blame them, but you don't see even a tiny bit of hypocrisy here? Schilling quotes the small-government line until it comes to tax dollars coming his way.

I dunno, seems clear to me.

I guarantee that Schilling doesn't see any hypocrisy. He's a JOB CREATOR.

but you don't see even a tiny bit of hypocrisy here?

Not really, unless he urged that people should voluntarily abstain from available government programs, I don't see anything hypocritical in taking advantage of services he doesn't believe should exist, that's just self-interest, a thing very much in tune with capitalism.

Of course he's a hypocrite, but he's also doing what pretty much everyone else would have done.

chris h sounds dead on to me.

people want to spend money on themselves/their kids not on someone else and OTHER kids.

I am not getting why anyone thought that curt schilling could run a multi-million dollar company.

Which reminds me, I wonder how many ML players or their wife actually runs/administrates, like a genuine executive, the charity that each one is supposed to have.

I do blame them, but you don't see even a tiny bit of hypocrisy here? Schilling quotes the small-government line until it comes to tax dollars coming his way.

You should hear farmers/business owners that receive government money talk about "welfare queens" or states that vote nearly 80% Republican that receive more federal dollars than they pay into the federal treaury. Funny how New York can afford welfare queens AND still have some left over for shotgun toting welfare states.

How's that for a ############# troll!

BEHOLD!!!!!

Shooty Randal - applying to be Top Troll!!!!!

I'm rootrootrooting for you!!!!!

or am I the biggest idiot evah?

The fact that some greedy sleazeballs also want small government doesn't stop it from being right. Plenty of sleazeballs on both sides.

Again, I don't support programs like this. I think Rhode Island wasted their money, and probably wasted the other $75 million, too. But the deal was that 38 studios would relocate their headquarters, complete with several hundred jobs and the prospect of more in the future, in return for the guarantees. That's exactly what Rhode Island allocated this money for, before 38 Studios ever got involved. It wasn't an earmark or a one-off deal.

Going to the government for a bailout after the company is in trouble would be problematic. Relocating your headquarters in return for a loan guarantee is a transaction.

Maybe it's that boss guy from Parks and Rec.

Ron F'n Swanson deserves a little more respect than being called 'that boss guy'

:)

Plenty of sleazeballs on both sides.

I feel like no one here denies this. But they have good reason to want to deny Schilling the ability to be on both sides simultaneously.

or am I the biggest idiot evah?

I don't see how you can be. I hold many, many titles of distinction.

But they have good reason to want to deny Schilling the ability to be on both sides simultaneously.

Government spends what, 40% of GDP? Small government conservatism is a belief about the way things should be. It's not a boycott or a vow of poverty.

zach

don't know if you are or are not one of those small govt conservatives but in case you are:

would you explain - listing is fine - what you think people should be taxed for that govt should pay for, i mean, and if you want to get rid of something that is paid for with taxes, like, say, public schools, what are your plans for the umpty millions who will no longer go to school.

stuff like that

p.s. (i don't belong to one particular political party or another because it seems to me like every one is run by the very rich who want to continue to get as much as they can for themselves while giving out enough of a dribble to the worker bees that we don't go on some sort of massive revolt and kill them all)

That's an awfully large question, so I'll be intentionally vague.

The government should pay for public goods -- things which benefit as large a fraction of the public as possible. The smaller a fraction of the public which benefits from a particular program, the more suspect it is. In general, the government should strive not to duplicate or compete with private industry -- partly because it's not very good at it, partly because there's a lot of potential for abuse and corruption. Finally, government should represent the interests of its citizens -- which may or may not end up blurring some of the previous categories.

As a practical matter, I think that giving loan guarantees to private companies is a terrible idea. There are lots and lots of private companies which specialize in taking financial risks in hopes of getting big returns, and the potential for corruption in giving $100 million loan guarantees is off the charts. But the fact is, people want to attract jobs to their region. They clamor for programs like this, and vote for politicians who implement them. If the government is buying, it's perfectly moral to sell to them -- we're not talking Pol Pot here, just a foolish government program.

p.s. (i don't belong to one particular political party or another because it seems to me like every one is run by the very rich who want to continue to get as much as they can for themselves while giving out enough of a dribble to the worker bees that we don't go on some sort of massive revolt and kill them all)

Oh, bbc, they don't even care about giving the worker bees that much.

Going to the government for a bailout after the company is in trouble would be problematic. Relocating your headquarters in return for a loan guarantee is a transaction.

It sounds like Schilling is doing the former right now. His company has already missed a $1.1 million loan guarantee fee payment to the state...

I don't see anything hypocritical in taking advantage of services he doesn't believe should exist,

No, but I strongly doubt Schilling has any qualms about this kind of welfare.

I second the bee thing and extend it to ants.

That is what I was thinking, it's a real toss up as to who is the master of the Earth, humans or ants.

Yawn. The ideological/hypocrisy arguments are pretty boring to me. More interesting question is what the actual financial status of the company is and what the state will do. Is missing the payment just a negotiating tactic by Schilling & Co. to try to get more state funding? I would think he has plenty of more money that he could put into the business to help it make its payments, and if I'm the state that's the first thing I ask him to do. This is a guy who made $114 million before taxes in baseball salary alone, so let's say conservatively $65 million after tax...he's reportedly put $20 million into the company, but he should have a fair amount saved away.

As I said in the other thread, I think putting your own money into a startup company is concentrating your risk too much. You're already putting time, effort, reputation, etc into the company. Putting your own money in after the initial stages is blurring the role between founder and investor.

As a practical matter, I think that giving loan guarantees to private companies is a terrible idea. There are lots and lots of private companies which specialize in taking financial risks in hopes of getting big returns, and the potential for corruption in giving $100 million loan guarantees is off the charts.

Add me to the group who doesn't understand this. It's unfathomable to me that a state would act as a venture capitalist. If they want to attract business, they can give tax breaks to companies that make money. What am I missing?

38 Studios made their payment today, but they're not going to make payroll this week. Link.

Chong did not offer details except to say 38 Studios advised the EDC about its inability to pay its workers. The company has not responded to repeated requests for comment from WPRI.com. 38 Studios employed 379 full-time employees as of March 15, including 288 in Rhode Island, bond documents show.

As I said in the other thread, I think putting your own money into a startup company is concentrating your risk too much. You're already putting time, effort, reputation, etc into the company. Putting your own money in after the initial stages is blurring the role between founder and investor.

The government shouldn't be guaranteeing the debt of startups either, but both those ships have sailed. My point is that the state shouldn't put in more money, and should only grant a forebearance on what they're owed if Schilling (or someone) puts more equity into the business.

Besides, Schilling isn't actually running the company day-to-day; he's hired a management team to do that. I'm sure he's involved in the operations to an extent, but his main role here is being the checkbook (and a name that people have heard of).

I have heard this argument before numerous times - Government program X is wrong, but as long as it's there, there's nothing wrong with me using it. The problem with this argument is that it reduces everything to gamesmanship. Why should I get upset about a welfare queen/king? They're just doing what's best for themselves. Maybe I should admire them for their astute analysis of the system.

I have heard this argument before numerous times - Government program X is wrong, but as long as it's there, there's nothing wrong with me using it. The problem with this argument is that it reduces everything to gamesmanship. Why should I get upset about a welfare queen/king? They're just doing what's best for themselves. Maybe I should admire them for their astute analysis of the system.

When rich white people do it, it's laudable. When poor minorities do it, it's destroying America.

Chong did not offer details except to say 38 Studios advised the EDC about its inability to pay its workers. The company has not responded to repeated requests for comment from WPRI.com. 38 Studios employed 379 full-time employees as of March 15, including 288 in Rhode Island, bond documents show.

379 employees? Valve only has 293 full-timers and they're, uh, Valve.

379 employees? Valve only has 293 full-timers and they're, uh, Valve.

This is what happens when you have dreams bigger than your ideas.

379 employees? Valve only has 293 full-timers and they're, uh, Valve

If they add a few more employees, Half-Life 3 might be released in our lifetimes.

38 Studios passes bad check to RI, can't make payroll.

The end is nigh.

Why should I get upset about a welfare queen/king? They're just doing what's best for themselves. Maybe I should admire them for their astute analysis of the system.

But you shouldn't. Hate the game, not the players. If the system is open for abuse, you can't really criticize somebody for helping themselves to perfectly legal free money.

The end is completely nigh. This is one type of deal where a hippie liberal like me can find common cause with the ValueArbitrageurs of the world, even if we disagree on WHY this sort of deal is a bad idea.

As for Schilling, he wasn't doing anything wrong. I don't find it hypocritical of him to move to a place offering him huge tax incentives and a bigass loan guarantee in order to help his business. He certainly didn't intend to #### over the state of RI, and he put no small amount of his own money into his business, according to upthread $20m dollars. I just hope that this whole episode makes him reconsider some of his prior stated opinions on how he thinks things work.

379 employees? Valve only has 293 full-timers and they're, uh, Valve.

MMOs need gigantic payrolls. Given that 38 Studios was aiming to create a AAA MMO, that staff number isn't that shocking. I think Turbine has around 400 employees now, and their primary product is a second tier MMO. Whereas Valve mainly runs Steam, which doesn't require a huge team to administer, and has a very slow development cycle which has been reusing the same graphical engine and assets for over half a decade.

Hate the game, not the players. If the system is open for abuse, you can't really criticize somebody for helping themselves to perfectly legal free money.

Nonsense. "Perfectly legal" does not equate ethical, nor does it equate self-respecting.

Nonsense. "Perfectly legal" does not equate ethical, nor does it equate self-respecting.

I've noticed that we in general have a weird dichotomy where we're cool with any non-family run small business to act as amoral constructs but are repulsed by actual people who do the same. It's not that we don't want or even expect corporations to act morally, it's just that the revulsion we feel is orders of magnitude less than if a person did the exact same thing.

MMOs need a high headcount to make and maintain because of the shear infrastructure and amount of content needed. Didn't help 38 that Amalur went head to head with Skyrim and was at very best an "average" game in that it did some things well, some things badly but ultimately wasn't that engaging because of a broken difficulty curve and uninspired MMO style grind in a single player game.

Rhode Island would get the rights to Copernicus if the company defaults. What would the next step be? Would they contact a developer and sell or license the property to get whatever money back they can? What company might be interested? The game has been in some kind of development for around 5 years. I know some projects just never make it, but how often would a game be this far in and just disappear?

Marvel had a MMO with I think Cryptic that ended (I kind of wonder if there is any thought to resurrecting that with the success of the Avengers, but realize there isn't a strong enough overlap of audiences to make that a guarantee).

MMOs need a high headcount to make and maintain because of the shear infrastructure and amount of content needed. Didn't help 38 that Amalur went head to head with Skyrim and was at very best an "average" game in that it did some things well, some things badly but ultimately wasn't that engaging because of a broken difficulty curve and uninspired MMO style grind in a single player game.

Yeah, I think Skyrim killed any chance Amalur had. When you compare them head to head, it's kind of sad:

- Well-known property (sequel to former game of the year) vs. unknown property
- Well-developed world with easy hook (dragons! Rar!) vs. generic fantasy world
- Photorealistic graphics engine vs. cartoony graphics engine
- Cool name vs. stupid name

As soon as I heard Amalur was switching from MMO to a single player version, I figured it was dead in the water. That's just not a design decision that successful companies make unless it's very, very early in the design process.

Marvel had a MMO with I think Cryptic that ended (I kind of wonder if there is any thought to resurrecting that with the success of the Avengers, but realize there isn't a strong enough overlap of audiences to make that a guarantee).

That eventually more or less morphed into Champions Online, which is still running.

Marvel has a new MMO in development, but it's (ugh) browser-based.