Back in 2000, the Mets’s plan to buy out the remaining year in Bobby Bonilla’s contract seemed like a good one. But as The Journal’s Mike Sielski reports, next year they’ll start paying for it. And suddenly–like so many public pension plans–the idea doesn’t look like so savvy.
Here’s what happened. Fresh off a loss in the National League Championship Series, the New York Mets were trying to build a team capable of advancing to the World Series. But standing in the team’s way was aging, disgruntled star Bobby Bonilla and his lucrative $5.9 million contract.
Eager to rid themselves of Bonilla and free up enough money to bring in fresh blood, the Mets bought out his contract and postponed payment for 11 years. They also agreed to pay him interest and found common ground on a fair rate.
“The idea wasn’t completely unilateral,” said Dennis Gilbert, who represented Bonilla earlier in the star’s career. “Both sides thought it was a good idea.”
In the short-term, the plan seemed to work. The Mets signed several key players with the money they saved from deferring payments to Bonilla and the team advanced to the World Series for the first time since 1986. (They lost to the Yankees.)
From a long-term perspective, the team’s decision on Bonilla doesn’t look so smart. Starting one year from today, the Mets will begin paying for the Bonilla buyout. And they’ll pay a lot. Having agreed to an interest rate of 8%, from 2011 to 2035, the Mets owe the retired player an annual salary of close to $1.2 million, or close to $30 million in total.
As Sielski explains, it also means that several key current Mets players such as infielder Fernando Tatis will earn less guaranteed money this season than Bonilla will make in 2011.
And though the Mets did get to the Series in 2000, since then, the ballclub has appeared in the postseason just once.
-This is from the Wall Street Journal
Basically I read this and all I can hear is Bobby Bonilla is a genius. He basically turned 5.9 million dollars for one year into 1.2 million for 24 years? I mean in this day and age when athletes are always losing their fortunes in under 3 years(see Antoine Walker) after their retirement. This guys must be smiling all the way to the bank. In a year he will get a 1.2 million check and just laugh when he opens it.