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Potential Loan For 38 Studios Draws Criticism From Candidates

Potential Loan For 38 Studios Draws Criticism From Candidates

August 10, 2010 | By Colette Bennett

August 10, 2010 | By Colette Bennett
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Rhode Island's decision to provide a $75 million loan to former Boston Red Sox pitcher Curt Schilling's first video game venture 38 Studios is drawing negative reactions from several political figures, including former senator Lincoln Chafee and state Treasurer Frank T. Caprio.

The Providence Business Journal reports that Chafee had made a request to the Rhode Island Economic Development Corporation to reconsider and suspend their support of Schilling's project until the board has properly investigated public proposals from other companies in the area, citing "high risk" as one of his key reasons for the appeal.

38 Studios has shown off its RPG Kingdoms of Amalur: Reckoning at Comic-Con this year and announced it is working on an MMOG code-named Copernicus, but it has yet to formally release any titles. Schilling has been forthright about investing the majority of his total earnings into 38 Studios.

The $75 million loan has not been approved yet, but if it goes through it will use up 60 percent of a $125 million budget specially designated for use on "knowledge-based" business in Rhode Island.

State Treasurer Frank T. Caprio, who is also the Democratic candidate for governor, also challenged the loan independently of Chafee by sending a letter to the EDC board requesting that the state be allowed to attend 38 Studios board meetings and hold equity in the company. He also prepared a list of recommendations for the deal that includes a penalty if the company eliminates jobs too rapidly.

Democratic general treasurer candidate Gina M. Raimondo also voiced strong feelings against the loan and the high risks involved, specifically because 38 Studios have yet to release a title. She also noted that there are a large number of venture capital firms in the area and that she felt it was worth noting that Schilling's project did not attract backing from any of them.

The EDC voted on the loan as of July 26th, but per EDC director Keith Stokes in a comment to Lincoln Chafee, the transaction is not yet a "done deal".


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