There is a scandal engulfing 38 Studios, the game studio founded by Red Sox great Curt Schilling. The short story: 38 Studios recently failed to make a scheduled loan fee to the State of Rhode Island, which generously gave loan guarantees totaling $75 million back in 2010. An interesting question is surfacing, now that the company can’t even pay its employees. Where was 38 Studios’ board of directors and CEO when the Rhode Island deal was negotiated, and more recently when it became clear that the cost/revenue structure was not sustainable?
It’s rare that a scandal simultaneously touches the New England tech, political, and sports scenes, and the local and national press has been all over it. The media has been playing up the sexiest angle — a sports hero at the helm of a struggling company. But Schilling isn’t alone. 38 Studios had a CEO, Jennifer MacLean (who just started maternity leave), an experienced CFO, Rick Wester, and an operations guru, Bill Thomas. And 38 Studios had a board of directors. At first I was unable to find a list of 38 Studios board members, because it had been taken offline, but I found a cached copy. Here it is:
Who was on the 38 Studios board of directors?
Schilling and 38 Studios had a solid board of directors. Besides MacLean and Thomas, these were people with decades of experience in finance, new ventures, and the games and technology industries. Here’s how their board bios described them:
Ms. Crowninshield is a general partner emerita of Boston Ventures, an internationally recognized private equity firm with more than $2.5 billion in raised capital spanning seven limited partnership funds. Since 1985, she was principally involved in investing in the entertainment and leisure markets. Her track record of success includes such recognized names as Motown Record Company, Six Flags Entertainment Corporation, Billboard Publications, Inc, and USA Cinemas (now Loews). She is a member of the Board of Fellows at Harvard Medical School and Founding Co-Chair of the Harvard NeuroDiscovery Center council. Her financial support and business advice are credited at Harvard Medical School as critical for the launch of the International MS Genetics Consortium where she serves on its Board of Directors. Ms. Crowninshield also has brought her business and leadership skill to her considerable efforts as a philanthropist. She was a driving force with the United Way in encouraging large individual donors to support targeted initiatives for programs including economic literacy and entrepreneurship for girls. As an overseer of the Boston Symphony Orchestra and the Huntington Theater Company in Boston, her work was focused on introducing the arts into the broader community with a special focus on education and participation for children. She also is involved in national and international initiatives to improve access to capital — both intellectual and financial — for women and people of color. A former member of the Executive Committee of the Simmons College Corporation and the Executive Committee of C200, she has received many local and national awards of recognition for her business and philanthropic leadership. Ms. Crowninshield received her MBA from Simmons College Graduate School of Business, and currently serves as Chair of Indaba Music.
Mr. Roche has 26 years of experience in investment banking, private equity and leveraged finance. From 2001 to 2006, Mr. Roche was Head of Investment Banking at Wachovia Corporation with responsibility for ten Corporate Finance industry coverage groups, Mergers and Acquisitions, Financial Sponsors Group, and Principal Investing. He held leadership responsibility for over $2.0 billion of revenue, a $40 billion loan portfolio and a $2.0 billion principal investing portfolio. During Mr. Roche’s five year tenure, Wachovia quadrupled its market share of investment banking fee-based revenue. Prior to being Head of Investment Banking, Mr. Roche was Co-Head of Leveraged Finance at Wachovia Corporation from 2000 to 2001 with responsibility for the Loan Syndications; High Yield Origination, Sales and Trading; Leveraged Capital; and Leveraged Finance Underwriting groups. From 1988 to 1999, Mr. Roche was a Managing Partner at Wachovia Capital Partners with a leadership role in founding this private equity investing business and in the successful growth and development of a $2 billion principal investing portfolio. Mr. Roche was previously a Vice President at Kidder, Peabody & Co. Incorporated, where he worked from 1980 to 1982 and 1984 to 1988. Mr. Roche holds a B.A. in Economics, magna cum laude, from Duke University and a M.B.A. from Harvard Business School.
Mr. Halpin is the President and owner of River Bend Inc., a private investment company. Prior to starting his own firm in 2000, Mr. Halpin served as President and CEO of CompUSA for seven years. During his tenure at CompUSA, he was named one of the “top 25 managers in the world” by Business Week in 1998. Mr. Halpin also served as President of HomeBase and BJ’s Wholesale Club. Mr. Halpin was also a director of Marvel Entertainment and Life Time Fitness. He was Chairman of the Compensation Committees at both Marvel and Life Time Fitness. In addition, he was a member of the Strategic Planning Committee at Marvel and the Finance Committee at Life Time Fitness. Mr. Halpin formerly served on the boards of Access and Posse, nonprofit organizations offering educational assistance to urban youth. Mr. Halpin has guest lectured at Harvard Business School, Massachusetts Institute of Technology, Babson, Columbia and Wharton.
Mr. Macrae began his career in videogames in 1981 when he founded General Computer in Cambridge, Massachusetts. Within a few years the company grew to over a hundred employees designing arcade and home games for Atari and Bally / Midway. Between original games and arcade conversion to home systems, General Computer was responsible for versions of Ms. Pac-Man, Centipede, Galaxians, Galaga, Asteroids, Joust, Robotron, Pole Position, Jungle Hunt, Xevious, Berserk, Desert Falcon, Dig Dug, Ballblazer, Jr. Pac-Man, Kangaroo, Moon Patrol, Food Fight, Phoenix, Quantum, Rubik’s Cube, Realsports Tennis, Track & Field, and Vanguard. In 1993, he founded a new company, VideoGuide, to design interactive program guides. In 1996, VideoGuide was merged into Gemstar; in 2000 Gemstar acquired TV Guide. Doug became President of TV Guide Consumer Electronics with offices in Boston, Los Angeles, London, Luxemburg, Hong Kong, and Tokyo. After retiring in 2005, Mr. Macrae became an avid World of Warcraft player, spending many hours of quality time with his sons. Desiring to get back into the videogame world, Doug, co-created the Azeroth Advisor, a personalized newsletter for players of Blizzard’s World of Warcraft game.
Mr. Subramaniam is Chairman of IBCC whose holdings include Cambridge Technology Enterprises (CTE.NS), Knome, where he is Chairman, MTPV, Cambridge Energy Resources and DNSstuff, where he serves as director, CEO of Sialix and General Partner at Higher Moment Capital. He previously served as Chairman of I-Cube, C-bridge, Open Environment Corporation, and OneWave – all of which completed IPO’s, WorldStreet Corporation, Integrated Computing Engines, and as Managing Partner of Cambridge Samsung Partners, a Venture Capital firm. Mr. Subramaniam graduated from Brandeis University with a major in Computer Science and Economics, has an MBA from MIT and an MS from HST (Harvard-MIT Health Science and Technology).
The bio for the other 38 Studios board member, Tom Zaccagnino, was removed from the site at the time of this posting, but his cached bio reads:
Mr. Zaccagnino is currently Co-Managing Director at Wellesley Advisors Corporation, an institutional private equity real estate investment company. He is also a director at 1921 Realty Incorporated, a Real Estate Investment Trust and at Indaba Music, an international digital media company. Prior to these positions, Mr. Zaccagnino was a high-tech entrepreneur at Cambridge Technology Enterprises, holding various executive positions and directorships with portfolio companies. He has transacted business in over 25 countries on 5 continents, and has extensive experience in private equity, M&A, and private and public offerings. Mr. Zaccagnino is also an active early-stage investor and is a member of the Urban Land Institute and the Boston Real Estate Finance Association. He also serves as Chairman of the Yale Alumni Real Estate Association of New England and is a member of the Yale Alumni Schools Committee. Mr. Zaccagnino earned a Bachelor of Arts from Yale College. In addition to being a 38 Studios director, he currently serves as the Chairman of the Finance Committee and is a member of the Audit Committee.
As I said before, there was a solid board at 38 Studios. These are qualified and experienced individuals who provided oversight to 38 Studios. They could not only advise Schilling and the senior management team, but had a fiduciary responsibility to help 38 Studios avoid financial crises. What happened? The story is still unfolding, but I think a lot more attention needs to be paid to the actions of the 38 Studios senior management team and board, not just Schilling.