Every July 1 since 2011, the New York Mets have paid Bobby Bonilla $1,193,248.20. That seems like a pretty reasonable annual payment for a six-time All-Star.
Except, here’s the thing. Mr. Bonilla is 59 years old and hasn’t played for the Mets in over 20 years.
Over the years, many baseball players have negotiated deferred payouts. But Mr. Bonilla’s may be savviest of all.
In 1991, the New York Mets signed Mr. Bonilla to a five-year, $29 million contract, making him not just the highest-paid baseball player in history but the highest-paid athlete in the world.
Mr. Bonilla eventually left the Mets to play for a few other teams. Eventually, he returned to the Mets in 1999. That year he hit just .160 with four home runs and 18 RBIs.
So, according to ESPN.com, the Mets agreed to buy out Mr. Bonilla’s contract in 2000, when it had about $5.9 million remaining. Rather than pay him $5.9 million then, the Mets agreed to pay him 1,193,248.20 for 25 years starting July 1, 2011, at 8% interest.
So, what exactly were the Mets thinking? Two words: Bernie Madoff. Mr. Madoff is the former chairman of the NASDAQ who used a massive Ponzi scheme to dupe investors, like the NY Mets, out of their money.
ESPN.com notes that “[a]t the time, Mets ownership was involved with a Bernie Madoff account that promised double-digit returns over the course of the deal, and the Mets were poised to make a significant profit — if the Madoff account delivered. It did not.”
Instead, the New York Mets will pay Mr. Bonilla seven figs every July 1 (affectionately known in baseball circles as “Bobby Bonilla Day”) until 2035. By then, the Mets will pay a total of $29.8 million. Counting today’s payment, the Mets are just about halfway there, having shelled out $14,318,978.40 already.
Only 13 more payments to go.