Canada Day....Yes... The first day of of the 2nd half of the year....Yes...It's also Bobby Bonilla Day
What day is it today?
If you are Adam, you know the day as Canada Day. Canada Day commemorates the joining of Canada's original three provinces (Nova Scotia, New Brunswick and the Canada province, which is now Ontario and Quebec) as one nation in 1867.
Today is also the 1st day of the 2nd half of the year.
However, for one former major league baseball player, July 1 represents a lump-sum payday of $1.2 million a year. That is despite not playing major league baseball nearly 2 decades.
Bobby Bonilla has not picked up a baseball glove or bat in 19 years. Nevertheless the New York Mets will pay the ex-player $1.2 million today and will continue to do so until 2035. The Mets started those payments in 2011 - 12 years after the the ex Met played his last game for the team. Disgusted Met fans call the day Bobby Bonilla Day.
How could this be? You can blame Bernie Madoff.
Back in 1999, the Mets wanted to part ways with Bonilla, but had $6 million left on his contract.
The Mets owner Fred Wilpon believed he was getting a huge return on his investments through disgraced financier Bernie Madoff. However, unbeknownst to the Mets owner he was a 1 of the largest victims of Madoff's Ponzi scheme.
Thinking that the $6 million invested with Madoff would be worth much more than the future value of payments to Bonilla, instead of paying Bonilla the 6M and cutting his losses, Wilpon and Bonilla's agent negotiated the deferred payment plan to Bonilla. In return, Wilpon was happy to invest the $6 million in Madoff's Ponzi scheme and benefit from the oversize compounded returns from Madoff's fund.
More specifically, Bonilla's agent negotiated with the team to defer payments until 2011 with an 8% annual interest rate from 1999 on the balance (and remaining balance) until the 2035 end date..
With compounding and the future value spread out from 2011 until 2035, the total payment to Bonilla will reach $29.8 million when all is said and done. Meanwhile, Madoff is serving 150 years in prison for the multi billion dollar Ponzi scheme that suckered in the Met's owner.
Not a bad deal for Bobby Bonilla.
