I know this has very little to do with the Orioles or our blog topics in general. But this is one of my favorite sports stories ever, so bear with me. July 1st is Bobby Bonilla Day and it will be Bobby Bonilla Day until 2035. Bonilla was a 6 time All Star, a 3 time Silver Slugger award winner, and finished top 3 in MVP voting twice. The Mets paid him approximately $1.2 million yesterday. He hasn’t played since 2001. There are many twists and turns through his story that make him and his agent look like geniuses. But did the Mets really screw up as badly as everyone thinks? The implications go well beyond Bonilla himself. This is how Bobby Bonilla, a Ponzi scheme, and the Colorado Rockies made way for one of the greatest Mets of all time.
The New York Mets signed Bobby Bonilla to the richest contract in Major League history in 1991 at 5 years $29 million. So yeah, he was a pretty good ball player. Except when he put on a Mets jersey. After a few underwhelming seasons, they moved him to the Baltimore Orioles at the end of that contract and he was an important piece in the 1996 ALCS run (damn you Jeffrey Maier). Bonilla hit .297 with 28 home runs and 116 RBI and had reestablished himself as a desired player in free agency. In 1997, he signed with Florida Marlins which is the root cause of some of one of the oddest turn of events in recent sports history. The Marlins won the World Series his first season with the team. His production dropped off the table after that and he bounced from the Marlins, to the Dodgers, and eventually back to the Mets. Bonilla was so bad in 1999 that the Mets didn’t want him back in 2000 and they negotiated a buyout. The buyout deal was constructed so that the Mets would save the $5.9 million they owed Bonilla in 2000, would wait 10 years, and then pay him approximately $1.2 million at 8% interest every July 1st for 25 years. In total, it is a 25 year, $29 million contract. From the earlier trade, the Orioles reportedly owed $12.5 million of that total. Luckily for the Mets, there was already a very similar deferred salary contract out there with pitcher Brett Saberhagen. Oddly enough, that deal is also with the Mets. The $1.2 million Bonilla earns is higher than 17 of the active Mets this season, and more than stud pitchers Matt Harvey and Jacob DeGrom combined. He was 48 when he received his first payment in 2011, and will be handsomely paid until he’s 73. So he definitely won this deal, right? Yes he did, but in an indirect way the Mets struck gold as well.
There are a few interesting details surrounding that $5.9 million the Mets didn’t pay Bobby Bonilla in 2000. The Mets owner, Fred Wilpon, was unknowingly part of a grand Ponzi scheme run by none other than the infamous Bernie Madoff. Madoff was giving Wilpon such good returns that Wilpon felt the $5.9 million he saved could be invested to grow to a sum far larger than anything he would ever owe Bonilla. With the information he had, this was a prudent financial move as the interest rate he was “earning” with Madoff was greater than the interest rate he owed Bonilla. Somehow, he was going to turn a profit on this deal. Thanks to some nerdy financial calculations (shout out to the Smith School of Business #TerpNation), the present value of the contract was about $5.4 million dollars. That means that at the time of the deal, all of the payments and interest included was equivalent to an immediate, one-time payment of $5.4 million. Again, with the information that he had, Wilpon was at the very least saving money on this deal. So there was some (a lot of) financial thought that went into this buyout. When Madoff’s Ponzi scheme was revealed, it was a whole different scenario as some sources initially reported Wilpon lost over $700 million. The Mets’ financial stability was in serious question around 2008, but has evened out since then.
As for the baseball side, the Bonilla deal actually worked out quite well for the Mets. With the money they saved, the Mets were able to pull off a trade to acquire pitcher Mike Hampton for the 2000 season. Remember the pitcher that always hit a bunch of home runs? That’s Mike Hampton. Coming off a 22 win season and just 1 year left on his deal, he was a hot commodity. In 2000, Hampton helped lead the Mets to the World Series, the Subway Series, which they lost to the Yankees. That offseason, Hampton signed a mega deal with the Rockies, which turned out to be one of the worst contracts of the century. For their loss, the Mets were awarded a 1st round compensatory pick. That pick turned out to be David Wright. Wright is in the top 5, if not the all-time leader, of almost every offensive category in franchise history. I’d consider that a win.
So looking back, $29 million dollars is a lot of money. But let’s not pretend the Mets got the short end of the stick. They got a slight financial success (take that with a grain of salt), a World Series appearance, and an all-time great from buying out Bobby Bonilla. Obviously, Bobby is basking in his glory after collecting his big check. Light up a cigar big fella. While Wilpon may be brooding over his lost fortune, the Mets and their fans should celebrate this bizarre contract to a certain extent. Meanwhile, I’ll try to negotiate my own $29 million buyout. I’ll let you know how it goes.
TK.DubC
The Win Column 