Has anyone ever made a more savvy deal than Bonilla?

[horshack.sixpack]

He retired in 2001. This happens every year but it still amazes me that he elected to defer his compensation and it's paying him for this long. Bonilla is set to collect another $1.193 million from the New York Mets today, as he will each July 1st through the year 2035.

 

[GloryDawg]

I read somewhere that Aaron Hernandez still receives 5K a year for his two episodes on Seinfeld.

 

[POTUS]

I read somewhere that Aaron Hernandez still receives 5K a year for his two episodes on Seinfeld.

 

[dorndawg]

I'm not saying he shouldn't have taken the deal, but it wasn't particularly savy and the Mets likely aren't mad about it. If I were Bobby Bo, I wouldn't want my financial future tied up with an organization such as the New York Mets.

• $5.9 million in 2000.
• $29.83 million between 2011 and 2035.

When the Mets and Bonilla's people sat down to figure out a fair compensation, they landed on a deferred payment schedule that gave Bonilla an annual compound interest of 8%. That's a decent gain over time, acceptable for many retirement accounts. However, that is a rate of return roughly equivalent to what you historically get just by parking your money in the U.S. stock market.

Let's take that $5.9 million payment in January 2000 and put it in the most basic place you can put it: the S&P 500. Using a calculator based on historical data, investing that $5.9 million with dividends reinvested and not adjusting for inflation or taxes, you get a current value of … $49 million.

Let's say you don't want the full volatility of the U.S. stock market and instead invest 60% into stocks and 40% into bonds. Using a different calculator, that strategy works out to $35.2 million.

Even taking stock market gains and bonds out of the equation, the inflation alone is significant, with $5.9 million in 2000 being worth $11.7 million in 2026.

We're not saying Bonilla shouldn't have taken that deal. It just really needs to be said: No one with a legitimate financial background thinks such a return is that wild.

https://sports.yahoo.com/mlb/article/bobby-bonilla-day-mlbs-most-misunderstood-holiday-arrives-with-another-12-million-payment-from-mets-120308528.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAN6OdLXuVCJBl26OnK0E_W-q3P5wgqfk6lbHOaiqPcyseL8cxlkKelsEMc9yhHYn1n5B5lU_f6Hd1KqedA6Jlm2RBa7MflrW3NSiqW6xsACHdlK7fEv9YxxNn_owHrfwsTdQ2bw7ElxG2tIe0yZoh9MLCOSBO6JKwO4ef13F2KJP

 

[SteelCurtain74]

Chris Davis from the Orioles has a similar deal. Bonilla was most likely his inspiration.

 

[johnson86-1]

I'm not saying he shouldn't have taken the deal, but it wasn't particularly savy and the Mets likely aren't mad about it. If I were Bobby Bo, I wouldn't want my financial future tied up with an organization such as the New York Mets.

• $5.9 million in 2000.
• $29.83 million between 2011 and 2035.

When the Mets and Bonilla's people sat down to figure out a fair compensation, they landed on a deferred payment schedule that gave Bonilla an annual compound interest of 8%. That's a decent gain over time, acceptable for many retirement accounts. However, that is a rate of return roughly equivalent to what you historically get just by parking your money in the U.S. stock market.

Let's take that $5.9 million payment in January 2000 and put it in the most basic place you can put it: the S&P 500. Using a calculator based on historical data, investing that $5.9 million with dividends reinvested and not adjusting for inflation or taxes, you get a current value of … $49 million.

Let's say you don't want the full volatility of the U.S. stock market and instead invest 60% into stocks and 40% into bonds. Using a different calculator, that strategy works out to $35.2 million.

Even taking stock market gains and bonds out of the equation, the inflation alone is significant, with $5.9 million in 2000 being worth $11.7 million in 2026.

We're not saying Bonilla shouldn't have taken that deal. It just really needs to be said: No one with a legitimate financial background thinks such a return is that wild.

https://sports.yahoo.com/mlb/article/bobby-bonilla-day-mlbs-most-misunderstood-holiday-arrives-with-another-12-million-payment-from-mets-120308528.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAN6OdLXuVCJBl26OnK0E_W-q3P5wgqfk6lbHOaiqPcyseL8cxlkKelsEMc9yhHYn1n5B5lU_f6Hd1KqedA6Jlm2RBa7MflrW3NSiqW6xsACHdlK7fEv9YxxNn_owHrfwsTdQ2bw7ElxG2tIe0yZoh9MLCOSBO6JKwO4ef13F2KJP

A guaranteed 8% return with your credit risk being the New York Mets is pretty solid. Agreed not wild, but particularly when he made the deal and interest and inflation was low, that was a good rate. Covid made that look a lot worse.

I think what made it a bad deal for the Mets is that my understanding is they were investing with Madoff, and viewed it basically as borrowing at 8% from Bonilla and making 15% or whatever it was with Madoff.

 

[patdog]

I'm not saying he shouldn't have taken the deal, but it wasn't particularly savy and the Mets likely aren't mad about it. If I were Bobby Bo, I wouldn't want my financial future tied up with an organization such as the New York Mets.

• $5.9 million in 2000.
• $29.83 million between 2011 and 2035.

When the Mets and Bonilla's people sat down to figure out a fair compensation, they landed on a deferred payment schedule that gave Bonilla an annual compound interest of 8%. That's a decent gain over time, acceptable for many retirement accounts. However, that is a rate of return roughly equivalent to what you historically get just by parking your money in the U.S. stock market.

Let's take that $5.9 million payment in January 2000 and put it in the most basic place you can put it: the S&P 500. Using a calculator based on historical data, investing that $5.9 million with dividends reinvested and not adjusting for inflation or taxes, you get a current value of … $49 million.

Let's say you don't want the full volatility of the U.S. stock market and instead invest 60% into stocks and 40% into bonds. Using a different calculator, that strategy works out to $35.2 million.

Even taking stock market gains and bonds out of the equation, the inflation alone is significant, with $5.9 million in 2000 being worth $11.7 million in 2026.

We're not saying Bonilla shouldn't have taken that deal. It just really needs to be said: No one with a legitimate financial background thinks such a return is that wild.

https://sports.yahoo.com/mlb/article/bobby-bonilla-day-mlbs-most-misunderstood-holiday-arrives-with-another-12-million-payment-from-mets-120308528.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAN6OdLXuVCJBl26OnK0E_W-q3P5wgqfk6lbHOaiqPcyseL8cxlkKelsEMc9yhHYn1n5B5lU_f6Hd1KqedA6Jlm2RBa7MflrW3NSiqW6xsACHdlK7fEv9YxxNn_owHrfwsTdQ2bw7ElxG2tIe0yZoh9MLCOSBO6JKwO4ef13F2KJP

Here’s the real return. It kept him from just blowing all the money in 5 years & winding up a bankrupt former ball player. Not necessarily that he would have done that but a lot of them do.

 

[vhdawg]

I read somewhere that Aaron Hernandez still receives 5K a year for his two episodes on Seinfeld.

You mean Keith?

 

[ZombieKissinger]

Here’s the real return. It kept him from just blowing all the money in 5 years & winding up a bankrupt former ball player. Not necessarily that he would have done that but a lot of them do.

This. If every deal were set up this way, 95% of the players would be better off

 

[GloryDawg]

You mean Keith?

Yes. Excuse my racism.

 

[JackReacherDawg]

I'm not saying he shouldn't have taken the deal, but it wasn't particularly savy and the Mets likely aren't mad about it. If I were Bobby Bo, I wouldn't want my financial future tied up with an organization such as the New York Mets.

• $5.9 million in 2000.
• $29.83 million between 2011 and 2035.

When the Mets and Bonilla's people sat down to figure out a fair compensation, they landed on a deferred payment schedule that gave Bonilla an annual compound interest of 8%. That's a decent gain over time, acceptable for many retirement accounts. However, that is a rate of return roughly equivalent to what you historically get just by parking your money in the U.S. stock market.

Let's take that $5.9 million payment in January 2000 and put it in the most basic place you can put it: the S&P 500. Using a calculator based on historical data, investing that $5.9 million with dividends reinvested and not adjusting for inflation or taxes, you get a current value of … $49 million.

Let's say you don't want the full volatility of the U.S. stock market and instead invest 60% into stocks and 40% into bonds. Using a different calculator, that strategy works out to $35.2 million.

Even taking stock market gains and bonds out of the equation, the inflation alone is significant, with $5.9 million in 2000 being worth $11.7 million in 2026.

We're not saying Bonilla shouldn't have taken that deal. It just really needs to be said: No one with a legitimate financial background thinks such a return is that wild.

https://sports.yahoo.com/mlb/article/bobby-bonilla-day-mlbs-most-misunderstood-holiday-arrives-with-another-12-million-payment-from-mets-120308528.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAN6OdLXuVCJBl26OnK0E_W-q3P5wgqfk6lbHOaiqPcyseL8cxlkKelsEMc9yhHYn1n5B5lU_f6Hd1KqedA6Jlm2RBa7MflrW3NSiqW6xsACHdlK7fEv9YxxNn_owHrfwsTdQ2bw7ElxG2tIe0yZoh9MLCOSBO6JKwO4ef13F2KJP

This doesnt account to gains from the money in 2011-2035.

I put that into chapgpt, and it concluded the lump sum payment would be worth $107M in 2035, while the yearly payments would be worth 171.5M.

This is primarily due to timing. A 2000 payment (exact date unknown) would be before the dot Com crash, and would experience very little growth up through 2010. Once growth kicks in, the yearly payments have started.

 

[johnson86-1]

This. If every deal were set up this way, 95% of the players would be better off

Allen Iverson got an annuity from Reebok with a big payout into trust in his 50's. Apparently either his agent or business manager knew it would be bad for him if he had access to all his money up front, so they made sure to backload his compensation.

 

[horshack.sixpack]

A guaranteed 8% return with your credit risk being the New York Mets is pretty solid. Agreed not wild, but particularly when he made the deal and interest and inflation was low, that was a good rate. Covid made that look a lot worse.

I think what made it a bad deal for the Mets is that my understanding is they were investing with Madoff, and viewed it basically as borrowing at 8% from Bonilla and making 15% or whatever it was with Madoff.

He also ensured 7 figure salary for quite a while ensuring he didn’t become someone who ended up broke like a lot of them have.

 

[Seinfeld]

Clearly you don’t remember the lost episodes