Here is the story of a spectacular disaster in progress, being funded by my state tax dollars.
Former Major League Baseball pitcher Curt Schilling owns a video game studio called 38 Studios. They recently moved from Massachusetts to Rhode Island, lured by a $75 million dollar loan from the state. This $75 million dollars is more than half of the money Rhode Island allocated for job creation.
Mistake #1: Spending our limited budget on a risky venture like creating a video game.
Mistake #2: Overpaying for the jobs this venture created: The math works out to $260,417 per job actually created. They could have created four or five times as many jobs simply by hiring people directly. Our roads are terrible here; if the goal is to create jobs, why not just hire a thousand people to work on our roads?
So people were already pretty upset about it, but they were working on their new MMO (code named Project Copernicus) and all seemed to be going well.
Then about a week ago the news broke that not only could 38 Studios not make payment on their loan, but they also couldn’t make their payroll. So the local news here has been talking about how the governor and his staff were in meetings to try to keep the company alive so they could keep paying their loan. (As the old saying goes, if you owe the bank $75 dollars, you have a problem, but if you owe the bank $75 million dollars, the bank has a problem.)
Things were obviously not going well, but hopes were high. 38 Studios released a video showing off the work done so far on Project Copernicus, which looked pretty impressive.
Then two days ago, 38 Studios laid off their entire staff.
Oh, but it gets worse.
38 Studios also had a employee relocation program. Employees were told that they could move to RI and the company would sell their old houses. They didn’t. So some of these freshly unemployeed people also have surprise second mortgages!
All of that to say: Rhode Island is about own an MMO. Which could be kind of cool.
If you’re interested in reading more about this train wreck, Metafilter user ericb has been posting several excellent links about the story over the past few days.