Was Bobby Bonilla’s Contract Financially Brilliant Or Horrendously Stupid?

As you’ve probably read in the news, online, and here on CelebrityNetWorth, the Mets will send Bobby Bonilla a check for a total of $1,193,248.20 today.

Through the year 2035, Bobby will keep making this deposit on the first of July. After the organization purchased Bonilla’s contract in 1999, which had one year and $5.9 million left on it, a 25-year payment plan was established. As a result, Bonilla earned more money in 2016 than Matt Harvey, the standout player for the Mets.

Matthew Stockman /Allsport
Matthew Stockman /Allsport

Allsport Matthew Stockman

Many people criticize the Mets for making a poor business choice, yet it’s plausible to argue that both parties missed out on money.

People who work in finance frequently discuss the time worth of money. Is it better to accept the cash now or to wait and get payments? Take the money when you can and let compound interest work its magic if you believe you can invest it sensibly.

    None of this takes inflation into account, and a major change in markets could make all of these numbers moot. It also makes the problematic assumption that there will be an annual return of 10%.

    The point is, there was some financial reasoning behind waiting to pay Bonilla, especially since they had been making way more than 10% per year investing with Bernie Madoff. Unfortunately, Madoff was a scam, as we all know, and the calculations that had made the Bonilla deal work quickly fell apart.

    Bernie Madoff’s investment fund was essentially a massive Ponzi fraud, as we all now regrettably know. Wilpon, who was under the false impression that he had made $300 million investing with Madoff, had potentially lost as much as $700 million, therefore completely wiping out the perceived gains on Bobby’s money.

    So it appears like the Mets suffered a significant loss today. And while Bobby Bonilla is probably having a huge party knowing that there’s something called Bobby Bonilla Day trending on social media, he may have lost as well!

    FYI: Had Bobby Bonilla taken $5.9 million in 2001 when Amazon was trading at $10 a share, and dumped it ALL into that stockā€¦ He would be a multibillionaire right now.

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