by Structured Settlement Watchdog
Ex-Met Bobby Bonilla offered to strike a deal with the New York Mets. He wanted guaranteed yearly payments of $1,193,248.20 every year until his 70s and for that he wouldn’t be the Mets’ problem anymore. The deal resembled the choice lottery winners are are faced with: taking a smaller lump sum or taking payments in the form of an annuity. Even the Wall Street Journal thought it was a smart baseball move says Byerly: “By postponing their payments to Mr. Bonilla for 11 years, the Mets freed enough money to trade for starting pitcher Mike Hampton and outfielder Derek Bell and sign first baseman Todd Zeile. Those three players earned a combined $15.1 million in 2000, and the Mets reached the World Series that year for the first time since 1986.”
After entering the spaghetti junction of the non-sequitur, to barf explosive content about Bernie Madoff which has nothing to with annuities, Byerly settles down by doing what she does (make no sense attempting to drive home a point) "If Bonilla had taken the lump sum of $5.9 million in 2000 and then invested it in an S&P index fund at the time it would be worth around $8.8 million by 2015" says Byerly. Why is 2015 relevant, when the Byerly article is published June 17, 2020? The fact is that the JP Morgan Asset Management 2020 Retirement study shows that the an investment in the S&P 500 from the first trading day in January 2000 and held until December 31, 2019, would not have beaten a fixed structured settlement annuity purchased on the same day. Read my write up Structured Settlements Compared to the Alternatives, published on the 4structures.com website.
Bobby Bonilla was Smart and He had a Smart Agent Who Had a Background in Insurance
From 1992 to 1994 Bonilla was the highest paid player in the league – and today he’s still earning a big paycheck due to some wise planning. That's all that matters.
An excellent article by Boston.com staff writer Hayden Bird, published July 1, 2019 reveals that deferred money is not uncommon in sports. Bird reports:
"Going back to 1975, deferred money played a role in the case successfully made by pitcher Catfish Hunter to become a free agent. His subsequent deal with the Yankees also included more deferred money.
And more recently, star players like Ken Griffey Jr. and Ichiro Suzuki still both enjoy annual salaries despite being retired. Gary Sheffield, who stopped playing in 2009, is getting his final payment in 2019 from the Tigers.
Even the Celtics reportedly agreed to pay Kevin Garnett $5 million annually for seven years after his retirement.
Two members of the 2004 Red Sox are still collecting a Major League paycheck. One is pitcher Bronson Arroyo, who last played in 2017. The Reds will pay Arroyo $1.36 million through 2021.
The other former Red Sox World Series winner with a deferred salary is Manny Ramirez. In 2011, Nick Cafardo reported that Ramirez and the Red Sox had agreed to pay a remaining $32 million in his contract over a 16-year period. The payout in 2019 is $2,008,397. The money is the last of Ramirez’s original deal with the Red Sox in 2000, when he signed an eight year contract worth $160 million.
In 2026, when Ramirez finally gets his last Red Sox paycheck, he will be 54 years old. That said, Red Sox fans are probably happier with the arrangement than Mets fans, considering Ramirez’s central contribution on multiple championship teams"
Full disclosure: This author is a New York Yankee fan, just like the judge who oversaw the Madoff profits case.