What We Know About Curt Schilling One Year After the Demise of 38 Studios

Curt Schilling, it turns out, had a heart attack two years ago. It was just seven months before the demise of his video game company, 38 Studios, and he believes partially brought on by the stress of the company’s bleak finances. That’s what he told the Globe’s Stan Grossfeld in a piece that ran in Sunday’s paper. The story, which catches up with Schilling a year after the crash, is sympathetic to the former Red Sox star and has its fair share of interesting tidbits and insights.

These days, it’s easy to watch Schilling appear as an analyst on ESPN and assume that his life has simply returned to normal, but Grossfeld makes it clear that the pitcher is still recovering from what happened. “It’s still raw for me,” he told Grossfeld. “It’s a tough thing to talk about.” (Of course, Schilling is lucky to have his baseball celebrity and ESPN work to fall back on—his nearly 400 employees who suddenly lost their jobs last year weren’t all so lucky.)

But, I have to admit, the story’s portrayal of the 38 Studios’ implosion stuck in my craw. Grossfeld writes:

According to Schilling, Rhode Island Governor Lincoln Chafee did “absolutely nothing” to prevent 38 Studios from closing.

“We had a local investor who was going to pony up the money — he wanted us to do some things — and Chafee just waited us out,” says Schilling.

Chafee has said that he did not want to put good money after bad. But Schilling says the state, as the second-largest investor after himself, had a responsibility to help the venture succeed.

“Name one thing he actually did,” he says. “Ask him that.”

Faye Zuckerman, Chafee’s deputy press secretary, said in a telephone interview, “Due to the pending litigation, Governor Chafee is unable to provide comment.”

Can we please do away with the fiction that 38 Studios failed because Lincoln Chafee didn’t do enough to save it at the end? It is simply not true. This is not a matter of he said, she said. It’s a matter of what actually happened. We’ve covered this at length before, but, in many ways, 38 Studios was doomed from the start. Its business model was incredibly risky and ambitious, and likely well outside the scope of what any first-time video game executive—let alone Schilling, who had never even worked in an office—would have been capable of. From day one, Schilling admitted to me, the company was chasing investment money. Nobody, save the state of Rhode Island, would give the studio any. And let’s be clear: as recent litigation has shed additional light on, Rhode Island’s decision to lure 38 Studios to Providence with $75 million in guaranteed loans was positively moronic. As far as I can tell, most people do more due diligence when they’re buying a new TV than Rhode Island did on 38 Studios.

Chafee, who became governor after 38 Studios had already moved to Rhode Island and actually campaigned against the loan deal, had nothing to do with any of that. That is apparently why Schilling thinks Chafee wanted the company to fail—to score political points. Now, could Chafee have been more active in monitoring 38 Studios from the beginning and protecting his state’s investment? Absolutely. Is it his fault that Schilling ran his company into the ground? Absolutely not. The notion that Schilling had found some local white hat investor to save the company until Chafee got in the way has never been born out. Schilling told me that the mystery investor’s commitment depended on receiving additional tax credits from the state, which, at that point, would have been a huge risk for Rhode Island, the basic definition of throwing good money after bad. And besides, as became clear in my reporting last year, Schilling has a propensity for significantly overrating the likeliness of getting deals done. There’s no reason to think that this local investor was nearly as slam-dunk as Schilling makes it sound.

For instance, Schilling thought that, in May 2012, he was close to a deal with a company called Take-Two Interactive to publish a sequel to the console game his studio had already produced, providing a much needed infusion of cash. That is, until Chafee spoke openly about 38 Studios’ financial troubles, scaring Take-Two away. From my piece last year:

Schilling says the deal with Take-Two was ready for “final sign-off” the next day, May 15, but fell apart when the publisher got spooked by Chafee’s comments. Take-Two seems to have had a different impression, however. “I am not aware that there were any negotiations,” spokesman Alan Lewis says. “We do not comment on rumors and speculation.”

That’s a hell of a disconnect. Look, Schilling is entitled to his opinion that Lincoln Chafee screwed him over. But the rest of us don’t need to act like there’s any merit to it.