21–30 of 57 posts
The article doesn't mention that team owner Fred Wilpon thought deferring Bonilla's contract was a great idea because he could use the savings at the time to invest in Bernie Madoff's fund. https://www.nytimes.com/2012/02/21/sports/baseball/mets-saw-...
Fun fact -> They offered this because they were getting such good returns (greater than 8%) through Bernie Madoff, and figured they could just pay off the contract interest through that
https://www.marketwatch.com/story/the-mets-are-paying-bobby-...
Einstein something, something, compound interest. Amazing what saving money at an 8% interest rate will do for your future self! The S&P has only returned 4.8% CAGR [1] from 2000-2018 so that was a pretty tremendous ROI for Bonilla. [1] - http://www.moneychimp.com/features/market_cagr.htm
fwiw Mets Payroll in 1999 - 71,506,427 5,900,000/71,506,427 = 8.25% of payroll --------- Mets Payroll 2011 120,147,310 1,193,248/120,147,310 = 0.99% of payroll ---------- Mets Payroll 2018 $154.61M 1,193,248/154,610,000 = 0.77% of payroll ------- also fwiw, not sure we can trace exactly how efficiently the Mets spent the $5.9 million they saved in 1999, but the Mets won 97 games that year, the next year they won 94 a…
It was the worst negotiation in sports history, yes. But far worse contracts have been signed. A bad NBA contract (some that obviously bad at the moment of signing) can easily pay $30M in 2 years to a player who essentially doesn't play at all. Which the teams then pay to dump on other teams (the NBA salary cap creates a fascinating market).
My favorite is the NBA agreeing to pay a percentage of TV revenue in perpetuity to the owners of the ABA team Spirits of St. Louis when the leagues merged. The NBA gave the other ABA teams that they weren't taking $3M but the Spirits held out. The NBA paid out $300M before finally buying them out for $500M in 2014. https://www.forbes.com/sites/monteburke/2014/01/07/the-nba-f...
Does anyone know what happens to the yearly payouts if Bobby dies between now and the last scheduled payment? Does it go to his beneficiaries until the 25 years runs its course or does the contract terminate on the year he dies?
Einstein something, something, compound interest. Amazing what saving money at an 8% interest rate will do for your future self! The S&P has only returned 4.8% CAGR [1] from 2000-2018 so that was a pretty tremendous ROI for Bonilla. [1] - http://www.moneychimp.com/features/market_cagr.htm
Anytime I read about this contract (and it comes up every year or so, somewhere) I wonder if Bonilla sold off his interest in the contract in return for a lump payment.
That's a very common arrangement and I never hear whether or not he did that ...
fwiw Mets Payroll in 1999 - 71,506,427 5,900,000/71,506,427 = 8.25% of payroll --------- Mets Payroll 2011 120,147,310 1,193,248/120,147,310 = 0.99% of payroll ---------- Mets Payroll 2018 $154.61M 1,193,248/154,610,000 = 0.77% of payroll ------- also fwiw, not sure we can trace exactly how efficiently the Mets spent the $5.9 million they saved in 1999, but the Mets won 97 games that year, the next year they won 94 a…
At one point in time (2013), Bobby Bonilla and Jason Bay were the two highest paid outfielders for the Mets, and neither of them were on the team. This occurred in the middle of a six-year sub-0.500 stretch. They probably could have used the $1.2M better than that.
It was the worst negotiation in sports history, yes. But far worse contracts have been signed. A bad NBA contract (some that obviously bad at the moment of signing) can easily pay $30M in 2 years to a player who essentially doesn't play at all. Which the teams then pay to dump on other teams (the NBA salary cap creates a fascinating market).
Borrowing money at 8% is a pretty reasonable commercial lending rate for the time (30-year fixed mortgages were only a couple points lower).
So, they took out a $5.9MM loan from Bonilla to pay Bonilla, accrued interest for 11 years without making any payments, and then started paying it off on a 25 year amortization schedule, all at 8% interest.
https://docs.google.com/spreadsheets/d/1wWMBl9YsLfjC3A6A_ZI6...