{"id":18411,"date":"2013-01-03T11:14:38","date_gmt":"2013-01-03T16:14:38","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=18411"},"modified":"2013-01-03T11:14:38","modified_gmt":"2013-01-03T16:14:38","slug":"rhode-islands-38-studios-the-new-poster-child-for-crony-capitalism","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2013\/01\/03\/rhode-islands-38-studios-the-new-poster-child-for-crony-capitalism\/","title":{"rendered":"Rhode Island&#8217;s 38 Studios the new poster child for crony capitalism"},"content":{"rendered":"<p align=\"center\"><iframe loading=\"lazy\" width=\"853\" height=\"480\" src=\"http:\/\/www.youtube.com\/embed\/TBphK_v8H0I\" frameborder=\"0\" allowfullscreen><\/iframe><\/p>\n<blockquote><p>The 2012 bankruptcy of Rhode Island-based video-game developer 38 Studios isn&#8217;t just a sad tale of a start-up tech company falling victim to the vagaries of a rough economy. It is a completely predictable story of crony capitalism, featuring star-struck legislators and the hubris of a larger-than-life athlete completely unprepared to compete in business.<\/p>\n<p>Former Boston Red Sox pitcher Curt Schilling, an iconic figure in New England after anchoring a historic playoff comeback which ended a legendary 86-year title drought, founded 38 Studios near the end of his baseball career in the hopes of becoming a big shot in the intensely competitive multi-player gaming world.<\/p>\n<p>Since 2006, Schilling invested millions of his own fortune into 38 Studios, and with the self-assured bravado he exhibited as a major league baseball player, set out to find investors to infuse his company with the roughly $50 million needed to complete 38 Studios&#8217; first game. Although Schilling is the kind of local legend who could get a meeting with every venture capitalist in New England, Massachussets VCs passed on 38 Studios. WPRI-TV&#8217;s Ted Nesi reported that one such potential investor said &#8220;it would have taken a lot of babysitting to do a deal with Schilling because he was inexperienced and the management was inexperienced.&#8221;<\/p>\n<p>Enter Gov. Donald Carcieri (R-R.I.), term-limited and searching for a legacy after presiding over one of the worst state economies in the U.S., featuring long spells of double-digit employment and frequent last-place finishes in rankings of business friendliness. In a classic spasm of &#8220;do something, anything&#8221; government desperation, Carcieri made it his mission to lure 38 Studios from its headquarters in Maynard, Massachusetts to Rhode Island.<\/p>\n<p>Using his bully pulpit as both governor and chairman of the Rhode Island Economic Devlopment Corporation (RIEDC), a quasi-public agency whose mission is to promote business in the state, Carcieri pushed hard for 38 Studios to receive a $75 million taxpayer-guaranteed loan.<\/p>\n<p>Each loan guarantee must be approved by the Rhode Island legislature, and when the votes were cast in 2010, only one lawmaker voted against it. Rep. Bob Watson (R-Greenwich) noted &#8220;a lot of red flags&#8221; in a &#8220;very risky&#8221; deal that was &#8220;too fast, too loose, and frankly, a scandal waiting to happen.&#8221; Watson added &#8220;more often than not, politicians are very poor when it comes to making business decisions.&#8221; <\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>The 2012 bankruptcy of Rhode Island-based video-game developer 38 Studios isn&#8217;t just a sad tale of a start-up tech company falling victim to the vagaries of a rough economy. It is a completely predictable story of crony capitalism, featuring star-struck legislators and the hubris of a larger-than-life athlete completely unprepared to compete in business. Former [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[831,14,84,28,15],"tags":[727,863],"class_list":["post-18411","post","type-post","status-publish","format-standard","hentry","category-business","category-gaming","category-government","category-media","category-technology","tag-cronycapitalism","tag-rhodeisland"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-4MX","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/18411","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=18411"}],"version-history":[{"count":2,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/18411\/revisions"}],"predecessor-version":[{"id":18413,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/18411\/revisions\/18413"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=18411"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=18411"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=18411"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}