[ByeShea]

That's nuts what clown thought up this contract.

Bernie Madoff.

And I wish I could tell you that I'm joking but I'm not.

[ex50warrior]

Here's an article on lump sum vs. annuity: http://finance.zacks.com/lottery-ann...-sum-2136.html

For example, if you won a $12 million jackpot in the multistate Mega Millions lottery game, you could take $461,538 a year for 26 years and get the entire $12 million, or accept a lump sum of $7,042,000, equal to 58 percent of $12 million.

So the lottery choice is 58% of the full amount or equal over 26 years.

Bonilla's choice was only 20% of the full amount or equal over 25 years.

58% is a good deal; 20% is not.

Granted, the prevailing interest rate was higher in 2000, but not that much.

Interest rates were higher in the fall of 1999 like you mentioned. But also this comparison is for an immediate annuity; Bonilla's deal had a 12 year deferral.

[HeeluvaGuy]

The way to evaluate the deal is to determine what the deferred comp is worth in 1999 dollars. By my rough math, it's somewhere in the $6.5 million range (using discount rates of 5-8%). Not a terrible deal on either side. I'm sure it freed up some cash for the Mets at the time, and they paid a slight premium for that. The 11-year gap before payments started was huge for the Mets as pointed out already.

[CTOWNsCAPPIN]

Iverson has 50 M in trust fund that he can't touch till he's 50. Fact. AI is just chillin for 9 more years, he's got a gig with the Sixers paying him a few bucks to hang around.

Not so fast my friend.

[CTOWNsCAPPIN]

Looks like $16 million at age 55 for Iverson....


Allen Iverson Broke?
On February 14th, 2012 a judge in Georgia ordered the seizure of all of Allen Iverson's bank accounts in the wake of the former superstars claims that he was flat broke. This is a shocking revelation considering that during his playing years Iverson earned nearly $155 million in salary. And that figure does not even include the amount of money Allen brought home through endorsement and merchandising deals which is estimated to be an additional $30 – $40 million. Iverson's financial troubles are an unfortunately familiar story for many professional athletes. He allegedly traveled with an entourage of as many as 50 people at times. He showered friends and family, especially his mother, with cars, jewelry, houses and expensive vacations. Allen's most recent financial troubles occurred after a judge ordered him to pay $900,000 to a Georgia jeweler but apparently the former super star does not have the funds to cut the check.
In a December 2012 court filing, Iverson told a judge in Georgia that his monthly income is $62,500 but his expenses are $360,000! Of that $360k, $125k goes to paying back various creditors and another a large chunk goes to mortgages. Iverson also admitted to the judge that he is still spending $10,000 a month on clothes, $10,000 a month on restaurants/entertainment and an additional $10,000 on groceries. What is that guy eating??!!
Reebok Trust Fund
In 2001, Allen signed a very unique endorsement deal with Reebok. In addition to paying $800,000 a year for life, Reebok set aside $32 million in a trust fund that Allen will not be able to access until he turns 55 in the year 2030. This deal came to light when Allen's ex-wife filed for divorce. As a result of the divorce, Allen will inherit half the trust fund in 2030.

[CTOWNsCAPPIN]

You make $200 million and currently in debt?! Absolutely crazy and I know it happens to a lot of them.

[CTOWNsCAPPIN]

Bobby Bonilla's Contract – The Bernie Madoff Connection:
You may be surprised to learn that even though Bonilla hasn't played professionally since 1999, The NY Mets will be paying him nearly $1.2 million per year for the next 25 years, starting July 2011 and ending 2035. How is that possible? In 2001 Bonilla was an aging veteran with $5.9 million left on his contract who could be easily cut loose to free up a roster spot. Bonilla was worried that $5.9 million after taxes and fees wouldn't be enough for his family to live off forever so he went to The Mets Management with a proposition. Bonilla and his agent proposed that instead of paying him $5.9 million in 2001, they instead pay $29.8 million over 28 years starting in 2011. That equates to $1.2 million per year for 25 years starting when Bonilla was 47 years old and long gone from baseball. Why would The Mets agree to pay so much more than $5.9 million? At the time The Mets' money, at the direction of owner Fred Wilpon, was heavily invested with Bernie Madoff and earning double digit returns each year. The Mets did the math and calculated that at even an 8% return, they would make a $60 million profit on the deferment. Unfortunately, as we all know now, Bernie Madoff's double digit profits were a giant ponzi scheme which would eventually cost Wilpon $700 million personally. But they are still on the hook for Bonilla's deal until 2035. Talk about smart retirem

[actiondan]

Social security is worse than Bernie Madoff.

Bernie sanders also worse.

[vividjohn45]

You make $200 million and currently in debt?! Absolutely crazy and I know it happens to a lot of them.

Escort pussy is expensive. Ask lamar odom. All the hookers/escorts wanted lamar to penetrate them. Proly like 5-10 in total. That weekend. So lamar needed viagra cuz he ran out of gas on the third escort/hooker. You know the rest of the story.

[FlyinAir]

Notable Mets Salaries This Year

PLAYER	SALARY
Bobby Bonilla	$1.2M
Matt Harvey	$614,125
Jacob deGrom	$556,875
Zack Wheeler	$546,250
Jeurys Familia	$523,925

Jeez!

[reigle9]

Hahahaha, no way this is still going on.

[daneblazer]

Today's the day

[DiggityDaggityDo]

Keep stacking those checks, Bobby.

Play on playa.

[BrickJames]

Following the 1999 season, the Mets wanted to buy out the final year of Bonilla's contract. But instead of paying him the $5.9 million he was owed, the two sides agreed to a deferred compensation deal with the Mets paying Bonilla 25 annual payments of $1.2 million starting on July 1, 2011.


On the surface the deal looks laughable for the Mets as the payments will total $29.8 million. However, it is not nearly that simple and the deal was actually a good one for the Mets.


If Bonilla had accepted the $5.9 million in 2000 and invested the entire amount at 8% interest, the original investment would have grown to $104.1 million by 2035* (blue line in chart below). If, instead, Bonilla took his annual payment and invested it with an 8% annual return, he would have $95.2 million by 2035 (orange line in chart below).


In other words, Bonilla lost nearly $10 million in potential earnings by taking the payments instead of the lump sum.

8%? Lol? Who is getting a legal 8% return on their money? If you could get yearly 8% returns year in and year out you would literally be the highest paid guy on Wall Street people would pay you whatever you wanted to work for them and invest money with you where are you getting 8%?

[pattymayo]

He gets paid through 2035, lol.

[The Kraken]

8%? Lol? Who is getting a legal 8% return on their money? If you could get yearly 8% returns year in and year out you would literally be the highest paid guy on Wall Street people would pay you whatever you wanted to work for them and invest money with you where are you getting 8%?

wow

[nyplayer33]

Why didn't they just pay him..instead of this 1 million every year for 90 years..lol. Mets didn't pay him..FANS DID..that's why not paying for a seat ever

[nyplayer33]

Problem with that math...who says he would.of invested it..maybe he just spends it..gambles it.

[BrickJames]

wow

Yeah Kraken I'm sure you're getting 8% on your money the best anyone can do these days is 2% and that will be capped. You obviously have no idea what you're talking about big guy go back to your safe space.

[teaserpleaser]

and every year on this date until 2035 retired 2001

Smart as hell man ...I'm sure people laughed at him at the time this deal was made.

[teaserpleaser]

Problem with that math...who says he would.of invested it..maybe he just spends it..gambles it.

All I know is a lot of players from his era aren't doing so hot ...he's doing fine. Doubt you see Bobby on the next edition of ESPN "broke" .

[Cuse0323]

All I know is a lot of players from his era aren't doing so hot ...he's doing fine. Doubt you see Bobby on the next edition of ESPN "broke" .

Yep. He will be 72 when 2035 paycheck hits. Who knows if he will be around. Hope so. If he is, I think that he probably has been smart enough to have setup a nice retirement fund. Screw the math. He made one of the greatest deals ever. $1.2 mil a year to do nothing. Obviously taxes, and all that, but he can live a nice carefree life. Good for him.

[teaserpleaser]

Yep. He will be 72 when 2035 paycheck hits. Who knows if he will be around. Hope so. If he is, I think that he probably has been smart enough to have setup a nice retirement fund. Screw the math. He made one of the greatest deals ever. $1.2 mil a year to do nothing. Obviously taxes, and all that, but he can live a nice carefree life. Good for him.

Hes straight you can buy a really nice house in Arizona or Nevada for 500k dude is on easy street for the rest of his life.

[Cuse0323]

Hes straight you can buy a really nice house in Arizona or Nevada for 500k dude is on easy street for the rest of his life.

Hardest thing would be what to do with all that free time. For me, that's no issue. I'm good at doing nothing. As long as he doesn't have a serious drug addiction, throws money around to girls, and buys up houses and cars, then he's good. Never hear much about him, so he seems like a chill guy who probably has a nice family with a few friends. Making that deal shows he knew what laid ahead of him in the future.

[Mac4Lyfe]

This was a good deal for both parties at the time. The Met's had use of that money to do whatever they wanted up front. Bonilla deferred money that he could cash at a later date when he was in a lower tax bracket. Now, who knows what he could have done with the money up front back in 1999 when interest rates were sky high. Mortgage rates were +10%, so he should have been able to find investments paying more. Maybe some tax deferred or even tax free. Bottom line, if he could have found an investment vehicle paying more than ~5.6% he would have been better off taking the money up front.

But, we all know that most people, not just athletes are not good stewards of money, especially those who invested in Madoff. For that reason alone it was a great deal. More athletes should force themselves to do the same.

[daneblazer]

Happy Bobby Bonilla day

[Sam Odom]

July 1, 2018


NEW YORK (WABC) -- For most of us, it is simply July 1st, but New York Mets fans know it by a different name - Bobby Bonilla Pay Day.

Each year on the first of July, the former Met collects a paycheck of just under $1.2 Million $1,193,248.20 to be exact - all the way until 2035. Why? Because the Mets deferred the $5.9 Million he was supposed to make in 2000, when he was released in January and never even played - stretching it out 24 years with eight percent interest.

That $5.9 Million will actually be $29.8 Million.

[Mac4Lyfe]

I don't know why people make such a big deal about this? This wasn't some huge slick move by Bonilla. Both parties got what they wanted and the terms were fair. He probably could have gotten a better deal with the cash upfront but perhaps he wanted a way to curb his own spending. He could have found similar investing instruments that would have paid him the same deferred compensation. This deal does not mean that the Mets were dumb financially. This deal helped them for many years before Bonilla saw a dime.

The lottery example is a good one. Who ever takes deferred payments??? No one. Why? Because the lump sum is always better, IF YOU KNOW WHAT TO DO WITH THE MONEY. Most people do not know but it's better to have money NOW than LATER. There's a huge risk in waiting for your money. 1 - you could be dead years before you see all the payments 2 - the company/entity could go broke before paying you.

Most athletes should setup an annuity with their first big payday. It sounds simple but many never do until it's too late. Kinda like 90% of America who can't save for shit.

[ROFLcopter]

I don't know why people make such a big deal about this? This wasn't some huge slick move by Bonilla. Both parties got what they wanted and the terms were fair. He probably could have gotten a better deal with the cash upfront but perhaps he wanted a way to curb his own spending. He could have found similar investing instruments that would have paid him the same deferred compensation. This deal does not mean that the Mets were dumb financially. This deal helped them for many years before Bonilla saw a dime.

The lottery example is a good one. Who ever takes deferred payments??? No one. Why? Because the lump sum is always better, IF YOU KNOW WHAT TO DO WITH THE MONEY. Most people do not know but it's better to have money NOW than LATER. There's a huge risk in waiting for your money. 1 - you could be dead years before you see all the payments 2 - the company/entity could go broke before paying you.

Most athletes should setup an annuity with their first big payday. It sounds simple but many never do until it's too late. Kinda like 90% of America who can't save for shit.

This. People are stupid. The Mets also used the saved money to acquire Mike Hampton who pitched them to the World Series

[TheSchafe]

As others have said, structuring the deal this way saved the Mets a good deal of money as opposed to a lump sum.

[ikid2groove415]

This. People are stupid. The Mets also used the saved money to acquire Mike Hampton who pitched them to the World Series

Did they win? Nope - failure

[jtoler]

mets were smart in doing it this way, works out well for both, bonilla got to see money well into retirement. 1.2 mil to a billionaire is arse wiping money, probably spend that on lawn maintenance.

[Bluehorseshoe]

Guess Who’s Still Getting Paid

Thanks to Paul via @BravesStats for this tip.

You’ve heard of ‘bad contracts’. The Braves have had some. Then there’s the deferred-payment contract. The most famous of these is Bobby Bonilla‘s deal with the Mets. He just got his 2015 check for $1.19 million, which he will continue to receive for the next 20 years (through 2035).

But it’s actually not that bad.

The worst has got to be the one the Atlanta Braves have going with Bruce Sutter. Allow me to quote from a lengthy LA Times article from 1985 – the year that this monstrosity was set up:

Sutter will receive a $750,000 salary for each of the next six years and a minimum of $1.12 million a year for the remaining 30 years of the contract. In addition, he will get the $9.1 million in so-called “principal” at the end.

Let’s spell that out:

1985-1991: $750,000 each year (6 years)
1992-2021: $1.12 million every year (30 years)
2021: $9.1 million, which represents the ‘principal’ dollars that were supposedly placed in a 12.3% interest-bearing annuity back in 1985.

By those numbers, that adds up to $45 million over the 36 year life of the deal. Bonilla’s deferment arrangement totals only $29.8 million.

The LA Times piece is written all about the ‘risk’ to the player, but frankly, most of the risk seems to have been on the club. The interest rates in that era were crazy-high, and could have escalated within the contract’s terms. At this point, of course, the minimum 12.3% figure looks like a steal for Sutter.

The contract more-or-less assumes that the Braves were going to take $9.1 million (other reports suggest $4.8 million) and throw it into an annuity fund somewhere, drawing $1.12 million payments out annually to send to Sutter. Nobody actually knows whether this was done or not, or if the Braves are simply writing checks every year… which I expect is probably the case (which would be to their significant detriment).

Further, if the Braves didn’t set up an annuity, that means 2022 will require a balloon payment of $10.22 million to complete the terms of the contract for the then 68-year-old. Ouch.

The contract was established with the expectation that Sutter would be a Brave for six years: 1985-1991. However, he developed shoulder trouble shortly after arriving in Atlanta, and never was able to pitch effectively. He missed most of the 1986 season, all of 1987, part of 1988, then all of 1989. The Braves released him at the end of that season.

Nice money, if you can get it.

[ROFLcopter]

Did they win? Nope - failure

Can you understand basic math? Nope - failure