Bobby Bonilla, who retired from baseball in 2001, is paid $1.19 million by the New York Mets every year on July 1 as part of a deal the former slugger signed before the 2000 season. The Mets wanted to get the aging Bonilla off their roster and did not want to pay the $5.9 million he was owned for the upcoming season, so they struck an unusual deal that called for million-dollar payouts every year for 25 years.
Bobby Bonilla’s contract has become a social media sensation, with fans celebrating, “Bobby Bonilla Day,” every year on July 1 when the Mets make the payout. So how many more years will Bobby Bonilla Day be celebrated?
As of 2018, the Mets have 17 payments left to make to Bonilla, who turned 55 in February, with the deal expiring in 2035. At that point, New York will have paid Bonilla total of $29.8 million for the 2000 season, which he ended up spending with the Atlanta Braves.
According to ABC News, “Bonilla’s agent, Dennis Gilbert, was an insurance agent at the same time he developed into a superagent (Gilbert’s clients included Bonilla, Barry Bonds, Jose Canseco and Danny Tartabull), so he was more uniquely prepared to understand annuity-type payouts than other agents.”
ESPN laid out the strange financial deal in a “30 for 30” short, which you can watch below:
Bonilla, a Bronx, New York native, began his professional baseball career in the Pittsburgh Pirates organization and spent six seasons in the big leagues with Pittsburgh. He was four-time All-Star in Pittsburgh before becoming a free agent in 1991. In 1991, he signed a 5-year, $29 million contract with the Mets. That deal, which is unrelated to the contract that the Mets are still paying him on, made him the highest player in baseball at that time, according to the New York Times. He was traded by the Mets to Baltimore in 1995.
After playing with the Orioles, the Florida Marlins and Los Angeles Dodgers, Bonilla returned to the Mets after a trade with Los Angeles. According to Baseball Reference, Bonilla’s contract at the time was one he had signed with the Marlins before the 1997 season. Bonilla was 36 and still owed $5.9 million heading into the 2000 season. The Mets decided to negotiate the unusual 25-year deal with his agent and released him in order to sign other players. Bonilla signed with the Braves for $200,000, and then spent one more season in baseball, with the Cardinals, earning $900,000 before retiring.
During his 16-season MLB career, Bonilla hit .279 with 287 home runs and 1,173 RBI, according to Baseball Reference.
While many have mocked the Mets for the lengthy deal, it has actually worked out well for the team, according to Business Insider’s Cork Gaines.
“If Bonilla had accepted the $5.9 million in 2000 and invested the entire amount at 8% interest, the original investment would have grown to $104.1 million by 2035* (blue line in chart below). If, instead, Bonilla took his annual payment and invested it with an 8% annual return, he would have $95.2 million by 2035,” Gaines wrote in July 2015. “In other words, Bonilla lost nearly $10 million in potential earnings by taking the payments instead of the lump sum.”
Meanwhile, Gaines wrote, “if (the Mets) invested the $5.9 million at 8% interest in 2000, that money would have grown to more than $14 million before they had to make a single payment to Bonilla. That money would continue to draw interest even while they are making payments. By 2035, the Mets would still have $8.9 million left over.”
But as Gaines points out, that assumes both Bonilla and the Mets would have wisely invested the money. The Mets famously lost millions as victims of Bernie Madoff’s Ponzi scheme, so that assumption might not be a good one.
According to ABC News, the Mets are also still paying another former player. Pitcher Bret Saberhagen, who was represented by the same agent as Bonilla, will be paid $250,000 per year until 2029.
Source: Heavy Sports