In an online post to Newsday, Steven Marcus reminds us that the Mets will begin paying roughly $2 million to Bobby Bonilla, each of the next 24 seasons.
As he explains, “The Mets owed Bonilla $5.9 million for the final year of his contract, but deferred that amount (with an interest rate of 8 percent) until this year. The result? Bonilla is now owed $29,831,205 until the year 2035.”
When judging this, there will inevitably be fans and media who ignore the team’s opportunity to earn more money on that money over the last 10 years, as opposed to only seeing it as though he was just signed to a 24-year, $30 million deal to sit on his sofa.
For instance, last summer, in a post to Amazin Avenue, Dan Lewis broke down the deal, explaining:
“They freed up enough money to improve the rotation and win an NL pennant (in 2000). They lucked into David Wright as a compensatory pick. They even structured the deal in such a way to minimize the long-term effects, even if it means that a 72 year old gets a July, 2035 payday of $1.2 million. So, good job Fred, Jeff, and Steve (Phillips). Even if it makes me sick to say it: you deserve credit, not blame.”
I wouldn’t go so far as to praise any one, when the topic of Bonilla 2.0 comes up. However, I also know it’s way too easy to only read the headline and assume this payout strategy is foolish, especially when some fans and media jump at the chance to always assume Ownership is foolish. In reality, the team claims to have already made money off the structure, and that can make sense considering investments and inflation and what Lewis writes about above.
I can’t know if that is true or not. I have a difficult-enough time managing my own personal debt, balancing a checkbook and I didn’t major in finance, so albeit for me to accurately judge this financial decision. And so, while it seems crazy to me that the team will pay Bonilla more than any free-agent signing this winter, at the very least, I’d like to keep an open mind and figure nothing is as simple as it seems. Right?
Updated at 9:22 am:
In the comment section here, Old Backstop added:
I did the math out a while back and this works out well for the Mets (minus the negative social impact of the deal since talk show hosts and journalists will always use it as ammunition to nail the Mets to a wall). Obviously the best option would have been to avoid Bonilla entirely in the first place, but given they did not, they structured a decent deal. The irony would be when the Mets win a World Series with Bonilla on the payroll.