On July 1 every year, a lot of baseball enthusiasts commemorate something hilarious called Bobby Bonilla Day. This is an unusual day since Bobby Bonilla is a former baseball player who retired in 2001 but receives an almost $1.2 million check annually each year by the New York Mets. He will continue receiving this money up to the year 2035. By this time, Bobby will be 72 years old!

It is unbelievable to people. And how is a person without playing even a single game of baseball in the last 20 years earning money? So how did it become so popular and why? Let us see how.

How the Deal Happened

In 1999, the New York Mets no longer preferred Bobby Bonilla in their team. However, they owed him a functional 6 million dollars since he had a contract which was not complete. Instead of paying Bobby the $6 million all at once, the Mets decided to pay him later.

Bobby’s agent, Dennis Gilbert, helped make a very smart deal for Bobby. They agreed that Bobby would start getting his money in 2011. From 2011 until 2035, the Mets would pay him $1,193,248.20 every year on July 1. That means Bobby will get almost $30 million in total! That is five times more than the $6 million he was originally owed.

Why Did the Mets Agree to This Deal?

The Mets’ owner at that time, Fred Wilpon, thought he was making a lot of money with a man named Bernie Madoff. Madoff told people he could invest their money and give them very big profits. But Madoff was lying. It was a scam that was known as a Ponzi scheme; when money paid to old investors is transferred using the money of new investors, rather than genuine profits.

Fred Wilpon believed he would earn more money with Madoff than what they had to pay Bobby. So he thought it was smart to pay Bobby later and invest the $6 million with Madoff. But in 2008, Madoff’s scam was discovered. Fred Wilpon and many other people lost lots of money. But the deal with Bobby was already signed, so the Mets still had to pay Bobby every July 1, no matter what.

What Is a Ponzi Scheme?

A Ponzi scheme is a trick where someone promises you big profits. But instead of investing your money, they use money from new investors to pay old investors. It looks like everyone is making money, but there is no real business or investment. It only works as long as new people keep giving money. When the scam is found out, everyone loses their money.

Bernie Madoff stole billions of dollars in the largest Ponzi scam ever. He was imprisoned for his crime and passed away in 2021.

Why Deferred Payments Are Used

What happened with Bobby Bonilla is called a deferred payment. This means paying someone over a long time instead of giving them all the money at once. Teams do this because it helps them save money today, and players like it because it gives them money later in life.

Other Players Who Have Deferred Payments

Bobby is not the only one with a deal like this. In 2023, the Los Angeles Dodgers signed Shohei Ohtani, one of the finest baseball players, to a 10-year, $700 million contract. Ohtani chose to take only $2 million a year while he was playing. The other $68 million a year will be paid to him starting in 2034. From that point until 2043, Ohtani will get $68 million each year. That’s a tremendous sum of cash!

The Dodgers have done similar deals with other players like Blake Snell and Tommy Edman to make their payroll work better.

Where This Idea Came From

The idea of paying athletes over many years started in the 1960s. An accountant named Ralph Dolgoff helped the American Basketball Association (ABA) do this. The ABA wanted to compete with the NBA to get good players. But they did not have as much money. So they offered to pay players over a long time. This helped the ABA sign good players by promising long-term money instead of big payments right away.

Why Bobby Bonilla’s Deal Is So Famous

Bobby Bonilla’s contract is the most famous deferred payment deal ever. Individuals cherish talking about it since he ceased playing baseball more than 20 a long time back, but he still makes more than a million dollars each year. Each year on July 1, fans, columnists, and websites post almost Bobby Bonilla Day. It’s like a clever occasion in baseball!

What Can We Learn?

Bobby Bonilla’s story teaches us a few things:

• Smart deals can help players make money long after they stop playing.
• Teams need to be careful about the deals they make. If they don’t plan well, they can end up paying players for many years.
• It’s important to invest money wisely. The Mets lost a lot because they trusted someone who was lying to them.

So on July 1, remember Bobby Bonilla Day, the day a retired player still gets paid like a star, and a reminder that sometimes a smart contract can make you a winner long after the game is over.