Curt Shilling "Tapped Out" Financially

[easysurfer]

According to article, he spent/lost what he earned playing baseball. Too late now, but I wonder if he had a sit down and thought about risk vs reward before his business venture.


"Former Boston Red Sox pitcher Curt Schilling says he's "tapped out" financially after personally investing "north of $50 million" into his failed 38 Studios video game company."



Curt Schilling says he is


http://www.washingtonpost.com/blogs/...rss=rss_sports

[Dawg52]

Unbelievable. How can anyone take on that kind of risk when you already have it made?

[easysurfer]

Quote:

Originally Posted by Dawg52 Unbelievable. How can anyone take on that kind of risk when you already have it made?

I think perhaps in sports he came through many times in the clutch. Unfortunately, that risk doesn't always translate in a whole different area.

I wonder at a point (maybe only after he knew the venture would fail) did he go "OMG...that's what I earned while playing!"

[Texas Proud]

At least they had my first thought in the article.

I feel that he will get some kind of job making more money than I could and I would bet that he has a baseball pension that also would be more money than I earn a year....

Also, a good number of former athletes do not make good businessmen or businesswomen...

From the article:

"His gift for gab probably ensures that he'll always be able to draw a paycheck in the baseball analysis world, but it'll be a mere drop in the bucket to the money he just lost by severely overestimating his worth as a businessman and video game maker."

[Retch The Grate]

From my friends at 38 Studios, he was apparently a nice boss, enthusiastic and supportive, and they built an amazing game that was getting really close to release. Sadly a big MMO is super expensive, and while he managed to line up additional funding a number of times, the last big infusion failed to materialize.

That definitely sounds like the kind of thing that somebody who is wealthy not through business efforts would be particularly likely to fall to, especially after his earlier risks where the studio was running out of money but he lined up more investors succeeded. After you raise tens of millions of funding multiple times, you presumably start believing you can keep doing it, especially when the product is looking as good as theirs was. Knowing that that was just survivor bias, a lot harder than thinking it is due to your own awesome skills...

[Notmuchlonger]

I followed his gaming avatar in another forum. Needless to say not surprising. That mmorpg was not at all close to release. Look at his Rhode Island disaster.

[FreeAtLast]

Quote:

Originally Posted by Dawg52 Unbelievable. How can anyone take on that kind of risk when you already have it made?

+1

[growing_older]

I think I must completely misunderstand this business model. They spent 75 million from RI and 50 million from Kurt, that's 125 million just there. Their first game was pretty successful with 330,000 copies sold, but that would require revenue of $400 per copy just to break even, not counting whatever extra investment was made in the other financing rounds they mention but don't detail. I cannot see this level of spending resulting in a profitable business unless there were a lot more products that weren't mentioned.

[zinger1457]

Just another in a long list of pro athletes that have lost/spent most if not all of what they earned.

Quote:

Recession or no recession, many NFL, NBA and Major League Athletes Go Broke- SI Vault • By the time they have been retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce. • Within five years of retirement, an estimated 60% of former NBA players are broke.

[growing_older]

Article describes numerous examples of athletes investing in dubious ventures, or in ventures instead of investments. They suggest only 1 in 30 pay off. The article closes with the guy who has supposedly been counseled and now understands this deciding to invest in a custom mouthguard company invented by a friend. He's hopeful, even optimistic, that this will be the 1 in 30 ventures that make it. His "invention" is a new mouthguard in a market where there are already many competitors, including many fully customized versions, for about the same cost or less. A few competitors are more expensive, many are much less expensive. So, it's a big bet on a longshot - that even if it pays off has very limited upside potential.

Even the example athlete chosen to illustrate a better way and who has supposedly learned what not to do, goes for another dubious private equity deal instead of actually investing in stocks and bonds. It's hard to feel sorry for them making their own misfortune after having had such a great opportunity to be quite wealthy, but squandering it.

[haha]

Quote:

Originally Posted by Dawg52 Unbelievable. How can anyone take on that kind of risk when you already have it made?

I would say that bigtime athletes are really cut from a different cloth than govt or corp cube rats. If they were very risk sensitive, would they ever play NFL football?

Ha

[eytonxav]

I'm not sure how old he is, but I'll bet he could still pitch. Maybe a comeback is in the cards, what a story that would make

[mickeyd]

If only Curt had stashed that cash in a combo of TSM and TBM, at say 50/50, he would be sleeping better tonight, but he would have missed a hell of a ride. So there's that...

[easysurfer]

Quote:

Originally Posted by DFW_M5 I'm not sure how old he is, but I'll bet he could still pitch. Maybe a comeback is in the cards, what a story that would make

He's still a baseball analyst for ESPN. He had to take a break and try to deal with his financial mess. Don't know how much ESPN analysts are paid. But say if he got a cool $1Million/year. He'd still be $50Million in the whole from where he once was. So like he said to his family, times will be tough .

[ziggy29]

When one had his kind of stash, you can easily take risks with a considerable portion of your wealth while making sure you "firewalled" enough of it as off-limits to risky ventures to keep you solvent for life.

[growing_older]

Quote:

When one had his kind of stash, you can easily take risks with a considerable portion of your wealth while making sure you "firewalled" enough of it as off-limits to risky ventures to keep you solvent for life.

Seems logical, but unless the venture takes off immediately, it will burn through the funds allocated to it and then people try to keep it going just long enough to let it develop the way they had hoped. Good money after bad, until it's all gone. Not sure if that's what happened here, but even with good intentions of firewalling risk capital from safe capital, people seem to get impoverished by trying to prop up a failing or not-yet-successful business all the time.