From MLB Millions to Bankruptcy: How Curt Schilling Lost $115 Million on a Failed Video Game Venture
Discover how former MLB star Curt Schilling earned $115 million during his baseball career only to lose it all on his failed video game company, 38 Studios. Learn valuable financial lessons from this cautionary tale of wealth mismanagement.
Introduction: The Spectacular Rise and Fall of Curt Schilling's Fortune 💰
Few stories in sports finance illustrate the fragility of wealth quite like Curt Schilling's. The three-time World Series champion and six-time All-Star pitcher accumulated approximately $115 million in career earnings throughout his illustrious 20-year Major League Baseball career. Yet, within a few years of his retirement, Schilling's fortune had vanished—consumed by a failed video game venture that stands as one of the most dramatic financial collapses in sports history.
This isn't merely a tale of a wealthy athlete making poor investments. It's a complex narrative involving ambition, inexperience, government loans, and the volatile nature of the video game industry. For anyone interested in wealth management, entrepreneurship, or the business of sports, Schilling's financial downfall offers valuable lessons about risk, diversification, and the dangers of venturing outside one's expertise.
The Baseball Years: Building a $115 Million Fortune ⚾
Rising Through the Ranks
Curt Schilling's path to financial prosperity began on the pitcher's mound. Drafted by the Boston Red Sox in 1986, Schilling was traded to the Baltimore Orioles before making his MLB debut in 1988. Though his early years showed promise, few could have predicted the dominant force he would become.
Finding Success with the Phillies
Schilling's career took a significant turn when he joined the Philadelphia Phillies in 1992. During his nine seasons with the team, he emerged as one of baseball's premier pitchers, helping lead the Phillies to the 1993 World Series (though they ultimately lost to the Toronto Blue Jays). His performances earned him substantial salary increases, setting the foundation for his wealth.
The Arizona Years and First World Series Win
In 2000, Schilling was traded to the Arizona Diamondbacks, where he formed one of the most formidable pitching duos in baseball history with Randy Johnson. Together, they led the Diamondbacks to a World Series victory in 2001, defeating the New York Yankees in a dramatic seven-game series. Schilling's postseason heroics significantly boosted his market value.
Boston Red Sox and Career Peak Earnings
The pinnacle of Schilling's career—both in terms of achievement and earnings—came with the Boston Red Sox. Signed to a substantial contract before the 2004 season, Schilling delivered one of baseball's most iconic performances in Game 6 of the 2004 American League Championship Series against the Yankees. Pitching with a visibly bleeding ankle (the famous "bloody sock" game), he helped the Red Sox complete an unprecedented comeback from a 3-0 series deficit.
The Red Sox would go on to win their first World Series since 1918, breaking the supposed "Curse of the Bambino." Schilling won another championship with Boston in 2007 before retiring in 2009. By the end of his career, he had accumulated approximately $115 million in salary alone, not counting endorsements and other income sources.
The Transition: From Baseball Star to Business Owner 🎮
Schilling's Gaming Passion
Unlike many athletes who invest in restaurants, car dealerships, or real estate after retirement, Schilling pursued his passion: video games. A self-professed avid gamer and fan of massively multiplayer online role-playing games (MMORPGs) like "EverQuest" and "World of Warcraft," Schilling decided to enter the gaming industry not as a celebrity endorser but as a company founder.
Birth of 38 Studios
In 2006, while still actively playing for the Red Sox, Schilling founded Green Monster Games in Massachusetts. The company was later renamed 38 Studios—after Schilling's jersey number. His vision was ambitious: to create a high-quality MMORPG that could compete with industry giants like "World of Warcraft."
Schilling didn't approach this venture halfheartedly. He invested a reported $50 million of his own money—nearly half of his career earnings—into the company. He also recruited talented professionals from the gaming industry, including acclaimed fantasy author R.A. Salvatore and artist Todd McFarlane, creator of the "Spawn" comic series.
Early Development and "Project Copernicus"
The company's main project, codenamed "Copernicus," was an ambitious MMORPG set in a fantasy world. The development costs for such games are notoriously high, often requiring $50-100 million and years of development before generating revenue. Even for established gaming companies, MMORPGs represent significant financial risks.
The Rhode Island Deal: A Controversial Partnership 📝
Seeking Financial Support
By 2010, despite Schilling's substantial personal investment, 38 Studios needed additional funding to complete "Project Copernicus." The company had been burning through cash with no product yet ready for market—a common situation in game development but particularly dangerous for a new studio without diversified revenue streams.
The $75 Million Loan Guarantee
In a controversial move, 38 Studios negotiated with the state of Rhode Island for financial support. The Rhode Island Economic Development Corporation (RIEDC) offered a $75 million loan guarantee to entice 38 Studios to relocate from Massachusetts to Rhode Island. The deal was part of a new job creation program designed to attract high-tech businesses to the state.
In exchange for the loan guarantee, 38 Studios promised to bring 450 jobs to Rhode Island by the end of 2012. The company moved its headquarters to Providence in April 2011, occupying a 38,000-square-foot office space in the city's downtown area.
Political Controversy
The loan deal was controversial from the start. Then-Governor Donald Carcieri supported it as an economic development initiative, but many Rhode Island residents and politicians questioned whether the state should risk so much on a single unproven company. The deal became a major political issue, with critics arguing that the state had no business investing in such a high-risk venture.
"Kingdoms of Amalur" and the Beginning of the End 📉
A First Product
In February 2012, 38 Studios released its first title, "Kingdoms of Amalur: Reckoning," a single-player action role-playing game. Developed in collaboration with Big Huge Games (which 38 Studios had acquired), the game received generally positive reviews from critics and reportedly sold about 1.2 million copies in its first 90 days.
However, EA Partners, who published the game, later revealed that "Kingdoms of Amalur" needed to sell 3 million copies just to break even, highlighting the financial challenges the company faced.
Financial Struggles Emerge
Despite the release of "Kingdoms of Amalur," 38 Studios' financial situation deteriorated rapidly in early 2012. The company had been using the Rhode Island loan to fund ongoing operations and development of "Project Copernicus," but expenses were outpacing revenues and available capital.
The Missed Payment
The beginning of the end came in May 2012 when 38 Studios missed a $1.125 million payment to the RIEDC. In a desperate move, the company eventually sent a check that bounced due to insufficient funds. This public failure triggered a rapid downward spiral.
The Collapse: 38 Studios' Bankruptcy 💸
Layoffs and Closure
By late May 2012, the situation had become dire. Unable to meet payroll, 38 Studios laid off its entire staff of approximately 400 employees. On June 7, 2012, the company filed for Chapter 7 bankruptcy, listing $150 million in debt and less than $22 million in assets.
Personal Financial Impact on Schilling
The collapse of 38 Studios devastated Schilling financially. He reported that he had lost his entire baseball fortune—the full $50 million he had personally invested in the company. In a 2013 interview with Boston sports radio station WEEI, Schilling revealed, "I'm tapped out... I've lost all my money. I've lost everything."
To cover mounting debts, Schilling was forced to sell many of his possessions, including the famous bloody sock from the 2004 ALCS, which fetched $92,613 at auction. He also sold his 26-acre estate in Medfield, Massachusetts, for significantly less than its original listing price.
The Aftermath: Legal Battles and Recriminations 👨⚖️
Rhode Island's Lawsuit
Following the bankruptcy, the state of Rhode Island filed lawsuits against Schilling, other 38 Studios executives, and various parties involved in the loan deal, alleging fraud, negligence, and breach of fiduciary duty. The state was left responsible for repaying the bonds issued for the loan, ultimately costing Rhode Island taxpayers approximately $115 million with interest.
Settlements and Resolution
After years of litigation, Rhode Island recovered approximately $61 million through various settlements with defendants. Schilling and other former 38 Studios executives agreed to a $2.5 million settlement in 2016, though the settlement was covered by the company's insurance policies and did not require additional personal payments from Schilling.
The Securities and Exchange Commission (SEC) also charged the RIEDC and Wells Fargo with securities fraud, alleging they had failed to disclose critical information to investors about the risks associated with the bonds. These cases were eventually settled as well.
Criminal Investigations
Federal and state authorities conducted criminal investigations into 38 Studios' collapse but ultimately filed no criminal charges. A four-year investigation by the Rhode Island State Police and FBI concluded in 2016 with no indictments, though controversy and public debate about potential wrongdoing continued.
Schilling's Life After Financial Ruin 🔄
Media Career
Following the 38 Studios debacle, Schilling focused on his broadcasting career. He had worked as a baseball analyst for ESPN since 2010, though his tenure there was marked by controversy due to his outspoken political views and social media posts. ESPN ultimately fired Schilling in April 2016 after he shared a controversial anti-transgender meme on Facebook.
Health Challenges
Amidst these professional and financial troubles, Schilling faced serious health issues. In February 2014, he announced that he had been diagnosed with cancer. Though he did not initially specify the type, he later revealed it was mouth cancer, which he attributed to his longtime use of chewing tobacco.
New Media Ventures
After leaving ESPN, Schilling launched a radio show called "Whatever It Takes" on the conservative Breitbart News Network in 2016. He later joined the conservative media outlet OutKick, continuing his career as a sports commentator with a political edge.
Financial Lessons from Schilling's Story 📊
1. Diversification is Essential
Perhaps the most obvious lesson from Schilling's financial collapse is the danger of concentration risk. By investing nearly half of his net worth in a single high-risk venture, Schilling violated one of the fundamental principles of wealth management: diversification.
Financial advisors typically recommend that even aggressive investors limit their exposure to any single investment, particularly one in a high-risk industry like video game development. Had Schilling diversified his portfolio across multiple asset classes and investments, he might have preserved a significant portion of his wealth even if 38 Studios failed.
2. Understand the Industry Before Investing
While Schilling was passionate about gaming, passion does not equal expertise or business acumen. The video game industry is notoriously difficult and competitive, with high failure rates even among experienced developers. MMORPGs are particularly risky, requiring massive upfront investments before generating any revenue.
Investors should thoroughly understand an industry's economics, competitive landscape, and specific challenges before making significant investments, especially when taking on an active management role.
3. Beware of Lifestyle Inflation
Like many professional athletes, Schilling had grown accustomed to a luxurious lifestyle during his playing days. Maintaining this lifestyle after retirement can rapidly deplete even substantial savings, particularly when combined with risky investments.
Adjusting spending habits when income decreases is crucial for long-term financial stability. Financial planners often advise former athletes and other high-income professionals to scale back expenses after their peak earning years to preserve capital.
4. Hire Qualified Advisors and Listen to Them
Reports suggest that financial advisors had cautioned Schilling about the risks of investing so heavily in 38 Studios. Professional athletes and other sudden wealth recipients benefit most from building a team of qualified, independent advisors—including financial planners, accountants, and attorneys—who can provide objective guidance and sometimes protect them from their own enthusiasm.
5. Government Partnerships Don't Guarantee Success
The Rhode Island loan gave 38 Studios a temporary lifeline but also created additional pressures and scrutiny. Government funding often comes with strings attached and can create a false sense of security. Entrepreneurs should recognize that government support does not validate a business model or guarantee commercial success.
The Video Game Industry: Why It's So Difficult 🎲
High Development Costs
Modern video game development, particularly for MMORPGs, requires enormous upfront investment. "Project Copernicus" was reportedly budgeted at over $75 million—comparable to a Hollywood blockbuster—with years of development time before any revenue generation.
Technical Challenges
Creating a technically complex game like an MMORPG requires sophisticated engineering talent and infrastructure. Even established studios frequently encounter technical difficulties, delays, and budget overruns. For a new studio like 38 Studios, these challenges were magnified.
Fierce Competition
The MMORPG market was particularly competitive when 38 Studios entered it. "World of Warcraft" dominated the subscription-based model, while free-to-play games were beginning to reshape the industry's economics. Breaking into this crowded market would have been difficult even with a completed, high-quality product.
Changing Business Models
During 38 Studios' existence (2006-2012), the video game industry was undergoing significant business model changes. Subscription-based MMORPGs were losing ground to free-to-play games with microtransactions. 38 Studios' business plan may have been based on assumptions that were becoming outdated even as the company developed its products.
Other Athletes Who Lost Fortunes: Schilling's Not Alone 🏆
Mike Tyson
Boxing legend Mike Tyson earned an estimated $400 million during his career but filed for bankruptcy in 2003, owing $23 million to creditors. His financial collapse resulted from lavish spending, mismanagement, and exploitative business relationships.
Allen Iverson
NBA star Allen Iverson earned over $200 million in salary and endorsements but reportedly faced serious financial difficulties after retirement. Excessive spending, a large entourage, and poor investments contributed to his financial troubles.
Vince Young
NFL quarterback Vince Young earned approximately $35 million but filed for bankruptcy in 2014, just a few years after leaving the league. Poor financial management, lavish spending, and questionable investments eroded his wealth.
Evander Holyfield
Boxing champion Evander Holyfield earned over $230 million during his career but lost most of it through a combination of poor investments, multiple divorces, child support obligations, and excessive spending, including on a 109-room mansion that was eventually foreclosed.
The State of 38 Studios' Intellectual Property Today 🔍
Kingdoms of Amalur: Re-Reckoning
In a surprising development, the intellectual property of "Kingdoms of Amalur" found new life years after 38 Studios' collapse. THQ Nordic acquired the rights to the game and released a remastered version called "Kingdoms of Amalur: Re-Reckoning" in September 2020, followed by new downloadable content in 2021.
Project Copernicus
The fate of "Project Copernicus," the MMORPG that consumed most of 38 Studios' resources, is less fortunate. The game never progressed beyond an alpha state and remains unreleased. Footage and artwork from the project occasionally surface online, giving glimpses of what might have been.
Schilling's Reflections on the Failure 💭
In various interviews since 38 Studios' collapse, Schilling has reflected on the experience with a mix of defiance and acknowledgment of mistakes. He has consistently maintained that he was honest and ethical in his business dealings, blaming the failure on a combination of factors including Rhode Island politics, the challenges of game development, and his own inexperience as a businessman.
In a 2016 interview with Outside the Lines, Schilling stated: "I think the biggest mistake was that this was always going to succeed or fail on me, and I failed at it... At the end of the day, you're responsible. I was the guy at the top."
Despite the financial devastation, Schilling has expressed few regrets about trying to build 38 Studios, saying he would "do it again tomorrow" because he believed in the vision and the team he had assembled.
Could 38 Studios Have Been Saved? 🤔
More Realistic Timelines
Industry experts have suggested that 38 Studios' ambitious scope and timeline were problematic from the start. Developing two major games simultaneously (Kingdoms of Amalur and Project Copernicus) stretched resources too thin. A more focused approach with realistic deadlines might have improved the company's chances.
Different Financing Structure
Rather than relying on a single large government loan, a more diversified financing approach involving multiple private investors might have provided more stability and business expertise. Traditional video game publishers or venture capital firms experienced in the industry might have offered valuable guidance along with capital.
Strategic Partnerships
Partnering with established game companies for distribution, technology, or co-development could have reduced risks. Many successful independent studios work with larger publishers who handle certain aspects of the business while the studio focuses on creative development.
Conclusion: A Cautionary Tale of Wealth, Risk, and Dreams 🎯
Curt Schilling's journey from MLB millionaire to bankrupt entrepreneur stands as one of the most dramatic financial reversals in sports history. His story transcends sports and gaming to become a broader cautionary tale about wealth management, risk assessment, and the challenges of entrepreneurship.
While easy to criticize in hindsight, Schilling's situation reminds us that financial security—even for the very wealthy—can be fragile. His $115 million baseball fortune, accumulated over decades of elite performance at baseball's highest level, vanished in just a few years through a combination of overconfidence, industry inexperience, and insufficient diversification.
Yet there's something undeniably human about Schilling's failed venture. Unlike athletes who lose fortunes through pure extravagance or fraud schemes, Schilling invested in something he genuinely believed in—a creative enterprise that, had it succeeded, might have employed hundreds and entertained millions. His failure was not one of character but of business judgment and risk management.
For sports fans, gamers, entrepreneurs, and anyone interested in financial literacy, the rise and fall of Curt Schilling and 38 Studios offers valuable lessons about the importance of financial planning, expert guidance, and the careful stewardship of wealth—no matter how vast it may seem.
Has Curt Schilling's financial cautionary tale made you think about your own investment strategies? Whether you're managing thousands or millions, the principles of diversification, industry knowledge, and careful planning apply to everyone. Share your thoughts in the comments below and let us know what other sports finance stories you'd like us to explore!
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