Today is July 1. That’s Canada Day, so happy Canada Day! I hope, like me, you’ll be blasting Rush and eating Timbits all day long!
It’s also the day that the Mets have to pay Bobby Bonilla $1.2 million, as they have since 2011 and will have to until 2036. People will laugh at that last one like crazy. It’s become an annual “LOL Mets!” joke. But it’s about the hackiest and easiest “LOL Mets!” joke around. And as many have noted, it’s not even in the top 10 of things to laugh at the Mets over. The quick version:
- Essentially this is deferred compensation. While it wasn’t super common for teams to do it back when Bonilla agreed to that deal, it is far more common now. Let’s see what Max Scherzer’s payouts look like when he’s still accepting huge checks from the Nats seven years after he retired
- One thing that makes Bonilla’s deal stick out is the interest he’s getting: 8%. That’s high, but as The Bad Economist pointed out a few years back, the prime rate when he signed the deal was 8.5%. The Mets probably should’ve made his interest a floating figure rather than fixing it at 8% — Bonilla is getting a windfall as a result — but that’s down to the Mets’ owners’ well-documented bad financial instincts and their misguided belief that they’d make 15% on any investments in perpetuity, not the silliness of the structure.
- The Mets got use of the $5.9 million Bonilla deferred for years. And hey, for a lot of that time they probably DID get 15% on it because they were early investors in a ponzi scheme! But even if they put that in a non-criminal investment, they made money on it. They got something for that money. Even conservatively invested, a good half of the $30 million or so Bonilla is getting after interest will have been paid for.
- And they got more than just the investment. As Dan Lewis pointed out five years ago, the $5.9 that was freed up for 2000 was used to bite off a huge chunk of the salaries owed to Mike Hampton and Derek Bell, for whom they traded and who helped them reach the World Series. When Hampton walked to take advantage of the good schools in the Denver area, they used the compensation pick to draft a kid named David Wright. None of that happens without deferring Bonilla’s salary given their payroll crunch at the time.
So mock the Mets all you want. Mock them for trading for Bonilla in the first place (though they only gave up Mel Rojas for him, and he was clinically dead by then). Mock them for their choice of interest rate. But don’t mock them for deferring Bonilla’s salary, because it was a good move for them at the time that allowed them to make moves they wouldn’t have otherwise made, including a move that helped them win a pennant.
Besides, there are things far more recent to mock them for anyway. And why not dwell on those?