Happy Bobby Bonilla Day!

Celebrate the holiday that keeps on giving to a one-time New York Mets outfielder courtesy of his agent.

If you’re a baseball fan, you’ve probably heard about Bobby Bonilla Day. But, do you actually know what it means? Do you know when the day is? Why is it a thing? 

Bobby Bonilla Day is July 1. That’s because, every July 1 through 2035, the New York Mets pay $1,193,248.20 to former player Bobby Bonilla because of a deal that is paid based on deferred money. Here are the details.

Why is July 1 Bobby Bonilla Day?

In 1999, then 36-year-old Bobby Bonilla signed as a free agent to a deferred-money contract for $5.9 million. Bonilla’s agent, Dennis Gilbert (who also represented Barry Bonds), was familiar with annuity-type payouts, so he negotiated for the Mets to attach an 8% annual interest rate to the money. Technically, the life of the contract started in 2000 when Bonilla signed the contract, so a $5.9 million contract was worth $29.8 million with the annual interest.

But Gilbert constructed the contract to start the first installment of the payout on July 1, 2011. So, from 2011 through 2035 (at which time Bobby Bonilla will be 72 years old), the New York Mets pay Bobby Bonilla $1,193,248.20. That’s $29.8 million divided by the 25 years. This is the best contract in all of sports.

Who is Bobby Bonilla?

A 6-time All-Star, Bobby Bonilla was a talented outfielder over a 16-year career. He was best known for his time with the Pittsburgh Pirates, where he occupied an early 1990’s outfield with Barry Bonds. He finished second in NL MVP voting in 1990, and his worst stats–coincidentally–were during his half-season with the Mets in 1999.

Other facts about the Bobby Bonilla contract:

  • While the Mets are ridiculed for the 2000 deferred money deal, Dennis Gilbert actually has another deferred money deal with the Mets for Bonilla. That’s because Bonilla’s first deal with the team during his 1992-1996 contract had a deferred deal attached to — this one pays him $12.5M through 2023. Though, to be fair, the Baltimore Orioles split that with the Mets due to a mid-season trade.
  • The Mets did more deferred money deals with players than most clubs, including Darryl Strawberry (paid $1.64 million every year through 2033 based on an original 1985 contract) and Bret Saberhagen (paid $250,000 per year through 2029).
  • Speculation is that the Mets agreed to so many deferred money deals because their owners’ investor was the notorious Bernie Madoff.
  • The deferred money deal allowed the Mets to also sign free agent pitcher Mike Hampton, who helped lead the Mets to the 2000 World Series. When Hampton signed with another team in 2001 the Mets received the 38th pick in the 2001 MLB draft. They drafted David Wright.

Rising Dough

Rising Dough - the question(s) that we need to think about from the reading.What do you think of Bobby Bonilla Day? Is this the best player contract ever signed? Did the Mets really benefit from this contract?

Listen to this Podcast, Bobby Bonilla Day, on NPR Planet Money to understand more of the most important concepts in finance by going to Bobby Bonilla Day: Celebrating compound interest and a New York Mets mistake. : Planet Money: NPR

*Click on the link above to Bobby Bonilla Day to listen to the Podcast! After you listened come back and tell us your thoughts.

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