Curt Schilling has confirmed that the reason why 38 Studios went bankrupt is because his company failed to raise more money from outside investors. Schilling went into heavy detail about his company in a radio interview on the Dennis & Callahan sports radio show on WEEI in Boston.
"One of the going concerns from Day One - and it was always something that we were cognizant of - is we needed to raise capital," said Schilling. "We tried for a long time to do that and it didn't come to fruition. The one thing we always listed as a going concern we couldn't execute on.
Schilling said he personally invested more than $50 million in the company and also received between $5 million to $10 million from other wealthy investors. There was also the infamous $75 million loan guarantee it received from the state of Rhode Island to entice it to move to Providence last year.
In 38 Studios' Chapter 7 bankruptcy filing, it reported that it owed more than $150 million, mostly to the state of Rhode Island, and that it had less than $22 million in assets.
While Schilling made tens of millions of dollars as a pitcher for the MLB, he said that he was "tapped out" and didn't have any more money to put into the company. "I put everything in my name in this company," said Schiling. "I believed in it. I believed in what we built. I never took a penny in salary. I never took a penny for anything."
Citizens Bank recently sued Schilling for $2.4 million in loans to 38 Studios that it says were personally guaranteed by Schilling. Schilling said last month he broke the news to his family last month that, "the money I saved and earned playing baseball was probably all gone…life is going to be different."
"The employees got blindsided," Schilling said. "They have every right to be upset. I always told everybody if something were going to happen, you're going to have a month or two of lead time, and I bombed on that one in epic fashion."
Schilling says that they nearly raised $35 million for a sequel to Kingdoms of Amalur: Reckoning, but that the deal fell through after Governor Lincoln Chafee said that the company was nearly insolvent. Sales from Kingdoms of Amalur: Reckoning did not immediately pay dividends because they had to pay back publisher Electronic Arts, which had provided the company with an advance.
An investor nearly wrote a check for $15 million to $20 million if the state of Rhode Island agreed to give the company $6 million in tax credits and also renegotiate the loan guarantee so the investor was first in line to be repaid. Schilling said this would have saved the company, but the state refused this deal.
Schilling also bit back at remarks that he was a hypocrite for seeking the loan guarantee and tax credits despite his political stance against bigger government. "I don't know how that correlates to this," said Schilling. "I don't have any problem with government helping entrepreneurs and businesses."