Globe Editorial

Despite loss of Schilling’s firm, Mass. was right to hesitate

July 30, 2010

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IF OFFERING Curt Schilling $75 million in loan guarantees was the only way to keep his fledgling video game company in Massachusetts, the Commonwealth chose wisely in letting him leave. The former Red Sox ace announced plans to move 38 Studios from Maynard after Rhode Island agreed to guarantee $75 million in loans. In the modern economic-development game, states must at times be willing to lay down bets on individual companies. But the supply of public money isn’t bottomless, and — bloody sock or not — getting into a bidding war over Schilling’s firm would have been a mistake.

Video game development grew into big business long ago, and Eastern Massachusetts, with its tech-savvy workforce, already plays host to Harmonix, Irrational Games, and other well-regarded firms. If the state is going to cultivate this industry further, officials should do so in a systematic way — perhaps by offering training initiatives, infrastructure improvements, and other lures.

But it’s hard to justify so large an incentive plan for 38 Studios, because the firm has yet to release a game, and state officials are ill positioned to assess its potential. Schilling’s company did agree to pay penalties if it fails to create a certain number of jobs in Rhode Island, and that state would get dibs on the company’s property if it can’t pay back its private loans. But states are bad at holding recipients of economic-development aid to their job-creation promises. And in a scenario in which 38 Studios can’t pay its loans, its intellectual property may be of limited value.

Especially since Governor Patrick’s multimillion-dollar efforts on behalf of Evergreen Solar failed to prevent the company from relocating some of its manufacturing to China, his administration’s hesitation now is hardly surprising. Nevertheless, Republican challenger Charlie Baker’s camp charges that the departure of 38 Studios is a sign of a “toxic business climate’’ under Patrick. But nothing about that climate explains Schilling’s decision, which appears quite simple: He sought help in nurturing his company, and Rhode Island made an offer that Massachusetts couldn’t reasonably match.

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