R.i. may provide schilling’s company with more cash – Lazy River Water Park

By Todd Wallack, Globe Staff Rhode Island Governor Lincoln Chafee said the state is consideringgiving former Red Sox pitcher Curt Shilling s troubled 38 Studiosgame maker millions of dollars in additional subsidies to keep thecompany afloat. The company is in financial turmoil as it struggles to bring itsmajor video game code-named Copernicus to market; earlier this weekthe state revealed 38 Studios missed a $1.1 million payment it owedRhode Island, and then tried to deliver a check Thursday night forthe amount but officials refused to take it after learning thecompany did not have sufficient funds. It has also not been able topay its employees this week. Chafee said 38 Studios did make the $1.1 million payment on Friday, potentially clearing the way for the firm to receive millions ofdollars in additional aid under the state s film tax creditprogram, which is open to video game companies. Under the program, video game companies can seek reimbursement fora portion of their expenses from the state in the form of taxcredits, which companies can then sell to other firms for cash.Chafee indicated the company appears to be eligible for $2.1million in tax credits for 2011. Amusement Park Water Slides

On Friday the company applied foranother $6.5 million in tax credits for the same year, which thestate is now reviewing. But Chafee said he was struggling with trying to help 38 Studios,while avoiding exposing taxpayers to further losses, particularlyin light of the revelations that the company is in seriousfinancial trouble. My energies are devoted entirely to the conflict of making surethat 38 Studios are solvent and protecting the hard earned taxpayerdollars, Chafee said. We re in deep. Chafee said he would prefer that the company raise outside capitalto funding the company, but noted it has been having trouble doingso. Lazy River Water Park

He said the company doesn t plan to release copernicus, alarge online fantasy game, until June 2013. Such games are veryexpensive to make, often delayed and it s difficult to tell howthey will fare in the marketplace, making it hard to court outsideinvestors. Their excuse is no private capital has materialized, Chafeesaid. Rhode Island originally offered the company the loan in 2010 tohelp lure the company from Maynard to Providence in 2010 andeventually create 450 jobs in the state. It now has more than 400full-time employees in Rhode Island and Maryland. Water Playground Equipment Manufacturer

Chafee, who opposed the deal when it was made by the priorgovernor, said he would never approve a similar deal as long as heis in office. Never, never – not under my watch Chafee said. I said fromthe beginning it was a risky enterprise. Meanwhile, Schilling, the company s founder and chairman, took toFacebook Friday morning to deny reports that suggested he usedstate funds to repay money he had poured into the company. Thatis not true, he wrote on his Facebook page Friday.

Late Thursday, Schilling wrote on Facebook, To all the prayersand well wishes to the team and families at 38, God Bless and thankyou! We will find a way, and the strength, to endure. Previously, Schilling has said he invested roughly $30 million in38 Studios, a significant portion of his personal fortune.Separately, the company told investors it used the state-backedfunds to help pay off a $2.5 million credit line that the companyhad taken out and Schilling had personally guaranteed. Schilling referred further questions to a public relations firmthat could not be immediately reached Friday. Todd Wallack can be reached at twallack@globe.com. Follow him onTwitter @twallack.


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