We should all enjoy something like Bobby Bonilla Day. But we don’t. Only one 61-year-old former baseball player will receive a $1,193,248.20 payment from the New York Mets from July 1 through 2035.
Why? Delayed is the right word.
It’s not Shohei Ohtani money, but it’s something. The payments to Bonilla began in 2011, 10 years after he retired. He was a solid hitter, with 2,010 hits, 287 home runs and 30.2 wins above replacement during a 16-year career in which he played for seven teams, including a 72-game stint with the Dodgers in 1998.
But it was the Mets, for whom Bonilla played from 1992 to 1995 and again in 1999, who reached an agreement with him to defer his $5.9 million salary in 2000 and instead receive the annual payments from 2011 through 2035.
Read more: How much Shohei Ohtani’s contract will cost the Dodgers over the next 10 years
Again, why? Why would the Mets agree to pay Bonilla more than four times what they owed him, albeit far in the future?
At the time, Mets owner Fred Wilpon had invested heavily with Bernie Madoff, making annual profits of up to 15%. It turns out Madoff ran off with $65 billion from nearly 5,000 investors and was sentenced to 150 years in prison. Wilpon, who would have made $49 million in profit in 2035 on the $5.9 Bonilla owed in 2000 if he had made just 10% a year, lost a fortune.
From a baseball perspective, the move was smart, as the money saved was used to sign Mike Hampton, Derek Bell and Todd Zeile, who helped the Mets win the National League title in 2000.
Roster construction considerations also led the Dodgers and Ohtani to agree to defer all but $2 million of his annual salary until his 10-year, $700 million deal is complete. Ohtani will receive $68 million in annual payments from 2034 through 2043, with no interest.
Read more: Shohei Ohtani Could Avoid Tens of Millions in California Taxes. Not So Fast, State Says
The structure was Ohtani’s idea, allowing the Dodgers to free up payroll to sign more star players over the next decade. Shortly after Ohtani signed, the Dodgers reached agreements with free agent pitcher Yoshinobu Yamamoto (12 years, $325 million), free agent outfielder Teoscar Hernandez (one year, $23.5 million) and trade acquisition Tyler Glasnow (five-year, $136.5 million contract extension).
The Dodgers have essentially made Bonilla’s annual deferred income look like pocket change. Mookie Betts has deferred $115 million of $365 million, Freddie Freeman has deferred $57 million of $162 million and Hernández has deferred $8.5 million of $23.5 million.
Deferring salary is generally not a sound financial strategy for a player because of inflation, according to the Major League Baseball Players Assn. The “net present value” of a contract — how much a deferred deal would be worth if it were paid out today — is significantly less than the guaranteed total. The net present value of Ohtani’s $700 million contract is just $437.5 million, and only $46 million of that currently counts toward the Dodgers’ luxury tax threshold.
Players’ union president Tony Clark told The Times during spring training that he had no problem with players agreeing to salary deferrals.
Read more: Tony Clark says MLBPA will protect right to deferred contracts like Shohei Ohtani’s
“We give them perspective. We give them history,” Clark said. “We give them all the information to help them make the best decision they can make for themselves.”
Bonilla’s deferred money and annual payments from the Mets — which continue until his 72nd birthday — are part of that history.
A lesser-known fact: A separate deferred contract with the Baltimore Orioles that began in 2004 pays Bonilla $500,000 per year through 2029, increasing his annual income from deferred salary to $1,693,248.20.
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This story originally appeared in the Los Angeles Times.
