The Real Tragedy of 38 Studios

Let’s get this out of the way up front.  Curt Schilling is an unbelievable asshole.  Schilling is a fiscal conservative who decries government spending, but who went against his deeply held beliefs by taking a $75 million loan from the state of Rhode Island to relocate his video game company, 38 Studios, to the state.  38 Studios has since defaulted on loan payments, laid off all its employees (in violation of further conditions of the loan the company took on), and been accused of defrauding said employees.  And still, Curt Schilling is criticizing Governor Lincoln Chafee for not publicly backing the insolvent company and deferring the loan payments, “The governor is not operating in the best interest of the company by any stretch, or the taxpayers, or the state.  We’re trying to save this company and we’re working 24/7.  The public commentary has been as big a piece of what’s happening to us as anything out there.”

Sure, it’s ridiculous to watch Schilling complain about the government, when that government helped his company to expand and simply wants Schilling and his company to abide by the agreement he made with it (an agreement Schilling applied for and made of his own free will; nobody forced him to take it).  But you know what?  Curt Schilling is probably right.  Schilling is a big cultural deal in New England, and he’s a central figure in sports history.  So when Curt Schilling’s video game company defaults on a payment for a government loan, it’s a far bigger deal than if some anonymous video game company run by actual business people and techies defaults on a payment.  It garners far more attention, and that attention puts political pressure on the governor and the regulatory agencies in Rhode Island to make sure that Schilling’s company either succeeds wildly or becomes an example for other companies not to fuck with Rhode Island (a more ridiculous phrase has never been written) and for taxpayers that their politicians are watching over their money responsibly (if somewhat belatedly).

And maybe that seems a little unfair.  Some anonymous company might be granted a deferral.  They wouldn’t have their name dragged into the press.  And they wouldn’t lose partners who fear their insolvency.  But Schilling also brings a lot of that attention on himself.  Schilling’s an endless self-promoter, who will bloviate on any topic you want as long as you put a microphone in front of his face or give him a phone line to call in on.  So he cultivates the media and a fan-base, who become invested in him.  So, while he might want us to sympathize with him, given that he may stand to lose $50 million (his figure), he’s done this to himself (and to his employees).

And you need to keep in mind that, while Schilling’s stature helped contribute to the downfall of 38 Studios, it also contributed to the growth of it.  Would 38 Studios have gotten a $75 million loan if it wasn’t Curt Schilling’s company?  Would it have attracted investors?  Would it have gotten any exposure at all if it wasn’t an official part of Curt Schilling’s bio, and was discussed in every profile of him and mentioned in every interview?  Would it have survived as long as it did without the cult of Curt Schilling?  The Common Man doubts it.

The hell of it is, even though Curt Schilling is an idiot and a blowhard and a horse’s ass, The Common Man really wishes he wasn’t facing this problem.  Because the failure of 38 Studios isn’t just about what happens to douchebag Curt Schilling. It’s about what happens to 300 employees and their families who are now, very suddenly, out of work, who don’t have health insurance and who apparently have second houses (and mortgages) they were told the company had sold for them.  It’s about the millions of dollars the state and the taxpayers of Rhode Island are owed that they probably will never recoup.  It’s about how government spending, which can spur private industry growth, can be denigrated again by a high-profile failure, instead of the many, many low-profile successes that help industries gain a foothold to climb the economic mountain.  So TCM isn’t going to celebrate the downfall of the company.  Nor is he glad Curt Schilling got his comeupance.  The Common Man would trade any one of those to let Curt Schilling keep his money and keep talking.  Because money is just money, and eventually, if Curt Schilling was allowed to talk for long enough, everybody would have known what a colossal douche he really is.