$187,500 per temporary job. Taxpayer money well spent?
Courtesy of Dr. Paul Price, at RealMoneyPro.TheStreet.com
Former major league pitching star Curt Schilling loves video games. He had a dream of creating the ultimate player experience. To that end he started 38 Studios in 2006 to develop the best video game ever made.
The company was located in Maynard Massachusetts. By 2010 money was tight and products were behind schedule and over budget. The all-star ‘pitched’ his last game when he got the state of Rhode Island to give his company a $75 million loan guarantee in return for their relocation to Providence in 2010 with the promise of 450 jobs by year-end 2012.
Rhode Island taxpayers got only 160 jobs as of the move-in date of August 8, 2011. The job number grew to about 400 earlier this year. Even at that higher number the loan guarantee came out to $187,500 per employee.
Mr. Schilling and 38 Studios burned through all their own money as well as the loan amount quick quickly. Employees were not paid on May 15th but were encouraged to keep on working as new financing was imminent. Schilling went hat in hand to ask for even more from Rhode Island last week. This time around the Governor wasn’t swinging at his delivery. RI decided not to throw good money after bad and turned down his request.
Last Friday 38 Studios shut its doors and terminated all its employees.
How many of these failed private enterprises do Americans need to experience before getting state and federal officials out of the Angel Investing game?
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