Schilling has Invested ‘Majority of Money I’ve Earned in My Life’ in 38 Studios
Wednesday, May 23, 2012
Former Red Sox star Curt Schilling made more than $114 million in salary pitching in the Major Leagues, but by 2009 he had had invested “the majority of money I’ve earned in my life” in his video game company.
Harvard Business School case study that was published in March 2010, just a few months before he reached an agreement with the state to move the company to Rhode Island in exchange for $75 million loan guarantee.
"I have put the majority of the money I've earned in my life on the table," Schilling said. "If I make another investment, I will have crossed the point of no return from a personal investment and company standpoint."
Last week, Schilling’s company was unable to make payroll and attempted to pass a bad check to the Rhode Island Economic Development Corporation (EDC) for an overdue $1.125 million payment. The company made that payment a day later, but could not afford to pay its employees.
Now Schilling and other executives have been in talks with state officials in hopes that a deal can be reached to keep the company solvent. But while Governor Chafee has said the state is considering offering the company at least $8 million in tax credits, he remains opposed to bailing out 38 Studios with more cash.
During a radio interview with a local radio host Tuesday, Chafee blamed the failure of the company’s recent release, “Kingdoms of Amalur: Reckoning,” for its cash flow struggles..
Chafee has encouraged Schilling’s company to seek out private investors and has said the state would be willing to help with the search, but the case study suggests Schilling has long struggled to find investors for his company.
While venture capitalists were interested in the company, the report states that Schilling wanted too much money and was unwilling to give up much of his stake in the company. As late as 2009, the report suggests Schilling had struggled to raise capital.
“This last six months feels like the four days between a loss and my next start,” Schilling said in the spring of 2009. “Sitting across from people at investor meetings, I wonder, ‘How can you not understand this? How do you not see what we are doing? And if you do see it, why aren’t you writing a check?’”
It is unclear exactly how much Schilling has poured into the company. According to a Reuters story from last summer, the number was $30 million to $35 million.
In the case study, Schilling suggested he has no intentions of letting the company fail.
“I totally understand that the path there is ridiculously bumpy, and that there are wins and losses all along the way,” he said. “I have no doubt I am on the cusp of creating a multimillion-dollar company, and the only failure scenario is a quit. Quitting is not an option.”
Dan McGowan can be reached at [email protected]
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