“Bobby Bonilla Day” was trending on Twitter on Friday, like every year on July 1st. That’s because it’s the annual date the former New York Mets player receives $1.2 million from the team despite being retired for over a decade.
Bonilla’s agent Dennis Gilbert orchestrated a contract payout for the third baseman that will pay him $1.2 million each year from 2011 through 2035. Bonilla was originally owed $5.9 million by the Mets in 2000, but the new deal pays him over $1 million annually. plus a further 8% interest acc ESPN.
Then-Mets owner Fred Wilpon was invested in an account owned by Bernie Madoff at the time and reportedly believed he would see significant returns going forward. Apparently, that didn’t happen, as Madoff’s hedge fund eventually wound up after it turned out to be a Ponzi scheme.
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Bonilla, now 58, isn’t the only retired baseball player to have a lucrative deferred payment deal with a sports franchise. Here are some other athletes who are also receiving large deferred payments from teams they no longer play for:
- Manny Ramirez currently has a 16-year, $32 million deferral contract from MLB’s Boston Red Sox. Ramirez last played for the Red Sox in 2008 and will be paid until 2025.
- Ken Griffey Jr. receives $3.59 annually from MLB’s Cincinnati Reds. Griffey last played for the Reds in 2008 and will continue to be paid until 2024.
- Todd Helton will receive $1.3 million annually from MLB’s Colorado Rockies through 2023. Helton is in the midst of a 10-year, $13 million deal from the Rockies, a team he last played for in 2013. He also gets 3% interest.
And some currently active players have such deals as well. For example, Max Scherzer to receive a total of $105 million in deferred payments from MLB’s Washington Nationals through 2028. Scherzer, who now plays for the Mets, will receive $15 million annually from the Nationals for seven years.
One reason some teams offer players deferred payments, even if the franchise ends up paying the player more than they were originally owed, is so that it frees up money for draft picks or free-agent players at that point, from who they believe can help the team compete.
All of the examples of deferred payment agreements listed above apply to professional baseball players.
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There are also some examples of extended payment deals in the NBA, such as with Kevin Garnett and Joakim Noah, but these are rare and often involve teams releasing a player from the roster as part of the deal in exchange for league salary money save short-term cover.
Steve Cohen, a hedge fund manager and current owner of the New York Mets, appeared to be part of the Bobby Bonilla Day hype as he tweeted about the annual tradition this morning.
According to the contract monitoring site, Bonilla’s payment is currently more than the salaries of 11 of the 34 players currently on the New York Mets roster Spotrac — Bonilla last played for the Mets in 1999.
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Some people have called Bonilla’s payout a great example of compound interest because he chose to defer $5.9 million in 2000 over 24 years at an 8% annual interest rate. With compounding, you earn interest on your earned interest, which can add up significantly over time. The net pay for Bonilla will be around $30 million when he turns 72.
https://www.marketwatch.com/story/on-bobby-bonilla-day-here-are-some-other-baseball-players-who-receive-huge-deferred-payments-annually-11656700120?rss=1&siteid=rss Bobby Bonilla Day: Here are other retired players receiving huge annual payments