If you are a baseball fan, you may have heard of Bobby Bonilla Day. It is the day when the New York Mets pay a retired player, Bobby Bonilla, $1.19 million every year until 2035. But why do they do that? And how did Bonilla manage to secure such a lucrative deal?
The story goes back to 1999, when the Mets wanted to get rid of Bonilla, who was past his prime and had a strained relationship with the team and the fans. Bonilla had two years and $5.9 million left on his contract, but the Mets did not want to pay him that amount. Instead, they agreed to defer his payment until 2011, with an 8% annual interest rate. That means that starting from 2011, the Mets would pay Bonilla $1.19 million every July 1 for 25 years, totaling $29.8 million.
But why would the Mets agree to such a deal? The answer lies in their owner at the time, Fred Wilpon, who was heavily invested in Bernie Madoff’s Ponzi scheme. Wilpon expected to make a huge profit from Madoff’s returns, which were around 10% to 12% annually. He thought that he could use that money to pay Bonilla and still have some left over. However, as we all know, Madoff’s scheme collapsed in 2008, and Wilpon lost millions of dollars. He also had to pay $162 million to settle a lawsuit from Madoff’s victims. As a result, the Mets became one of the most financially troubled teams in the league, and had to sell the team to a new owner in 2020.
Meanwhile, Bonilla has been enjoying his annual payday without lifting a finger. He is currently 58 years old and has not played in the majors since 2001. He is one of the few players who make more money than some of the current stars of the game. For example, he makes more than Fernando Tatis Jr., Juan Soto, and Ronald Acuña Jr., who are among the best players in baseball today. Bonilla also makes more than some of the Mets’ coaches and staff members.
Bobby Bonilla Day is a reminder of one of the most bizarre and brilliant contracts in sports history. It is also a lesson in financial planning and risk management. Bonilla chose to take a smaller amount of money upfront, but secured a steady income for decades. He also avoided the pitfalls of Madoff’s fraud, which ruined many people’s lives. The Mets, on the other hand, gambled on a risky investment that backfired spectacularly. They also created a public relations nightmare that haunts them every year.
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