Word started buzzing
around the State House just prior to Gov. Chafee making his historic executive
order recognizing same sex marriages from other states – but the rumors weren’t
about marriage equality, they were about 38 Studios.
the end of the day,Bill Rappleye of Channel
10 brokewhat very
well could become the biggest story to date of 2012: the state is working with
38 Studios to help keep it solvent.
former Red Sox Curt Schilling’s company, was given a $75 million guaranteed
loan to move from Massachusetts to Rhode Island by former
Gov. Don Carcieri.
The former CEO governor, who always touted his business
experience as reason to trust him as a public official, pushed through the
highly controversial loan to his friend and political ally as a way to shore up
his otherwise poor economic development record while in office.
whatever happens to 38 Studios, Carcieri owns it.
needn’t to be a business expert to know that investing in 38 Studios was a
risky proposition. In fact, our ownSam Howard detailed why
it was in a post earlier this year. 38 Studios has made some money
on its new single player game Kingdoms of Amular. But the project Rhode Island is vested
in is a huge multiplayer game called Copernicus. Howard points out here why the
former is a much safer investment than the latter:
“…one of the
things that [Amular] had going for it was that it’s single-player.
Single-player games are like novels, in a lot of ways. People are more willing
to get into a new one. But [multiplayer games] are in a lot of ways like a
bowling league. Once you’re part of one, why join another?”
business experts knew this was a risky investment as well.Ted Nesi reports:
“Last June, PricewaterhouseCoopers audited 38 Studios and issued a “going
concern” opinion that expressed “substantial doubt” about whether the company
would be able to stay solvent, the disclosure filing said.”
Carcieri, who was lauded for his business acumen, see this?
Why didn’t Keith
Stokes, Carcieri’s economic development chief who lauded the loan and was then
kept on by Chafee, even though the current governor vociferously argued against
granting 38 Studios the risky loan? Why didn’t taxpayers? Where was the Tea Party
on this one?
Why might not
matter now. What matters most is how to protect the state’s investment, and its
In the meantime,
as the local media has been looking for the “next Central Falls,” Rappleye might just have
stumbled onto it … but this time there will be no way to argue that pensions or
union contracts are the problem. This time the issue seems squarely to be that
the public servants simply placed too much faith in private sector.
was supposed to be the state’s ultimate job creator. It’s high time Rhode Island realizes
that, whether it’s tax cuts or tax giveaways, such an economic strategy is far
too risky keep placing so much blind faith in.
BobPlain is the
editor/publisher of Rhode Island's
Future. Previously, he's worked as a reporter for several different news
organizations both in Rhode Island
and across the country.