This article originally appeared on Market overview†
“Bobby Bonilla Day” was trending on Twitter on Friday, like July 1 every year. That’s because it’s the annual date when the former New York Mets player receives $1.2 million from the team, despite being retired for more than a decade.
Bonilla’s agent, Dennis Gilbert, arranged a contract payout for the third baseman that will pay him $1.2 million each year from 2011 to 2035. Bonilla was originally owed $5.9 million from the Mets in 2000, but the new deal will pay him more than $1 million a year, plus an additional 8% interest, according to ESPN†
Owner of the then Mets Fred Wilpon was invested in a Bernie Madoff account at the time and reportedly believed he would earn significant returns in the future. Obviously, that didn’t happen, as Madoff’s hedge fund was eventually dissolved after it was revealed to be a Ponzi scheme.
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 also receive large deferred payments from teams they no longer play for:
- Manny Ramirez currently has a 16-year $32 million contract deferred 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 be paid until 2024.
- Todd Helton will receive $1.3 million annually from Colorado Rockies in the MLB through 2023. Helton is in the midst of a 10-year, $13 million deferred contract deal from the Rockies, a team he last played for in 2013. He will also receive 3% interest.
And some currently active players have such deals as well. For example, Max Scherzer will receive a total of $105 million in deferred payments from the 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 of the reasons some teams offer players deferred payments, even if the franchise ends up paying the player more than they originally owed, is because money becomes available at that point to spend on draft picks or free agent players they think that they can help the team compete.
All of the deferred payment agreement examples listed above are for professional baseball players.
There are also some examples of long-drawn-out 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 to save money on the salary of the player. short-term competition.
Steve Cohen, a hedge fund manager and current owner of New York Mets, appears to be joining the hype for Bobby Bonilla Day, as he tweeted about the annual tradition earlier this morning.
Bonilla’s payment currently exceeds the salary for 11 of the 34 players currently on the New York Mets roster, according to contract monitoring site spotrac—Bonilla last played for the Mets in 1999.
Some people have described Bonilla’s payout as: a good example of compound interestbecause he chose to defer $5.9 million in 2000 to 24 years of payments with an 8% annual interest. Compounding is when you receive interest on your earned interest, which can have a powerful impact over time. The net payment for Bonilla will be approximately $30 million when he turns 72.
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