From the “Having Little To Do With Anything” file:

Got an email from a friend who knows me to be a lover of you-can’t-make-this-stuff-up stories and a newbie investor (I don’t care how young you are or what you think you know about the stock market: if you’re working, put aside $50 to $100 a month, that you’d otherwise spend on whiskey or DVDs, and open up an IRA; do it nowtodayrightawayyoufool!).

Email read thusly-wise:

“Remember Bobby Bonilla?  The Mets have to pay him $30 million over something like twenty years, instead of just paying him the $6 mil he was owed back in 2000.  Wilpon must be kicking himself now!”

Yes, I remember Bobby Bonilla

I remember him quite well, as a matter of fact.

I’m skipping the card-playing incident with Rickey Henderson.  Rickey’s in the Hall.  Rickey doesn’t need some nobody makin’ him look bad.  Come to think of it, Rickey doesn’t need that nobody assuming he’ll drop his “g”s while using the progressive tense.  Rickey’s a fan of progress, and professionalism.  Rickey will not be cast in a negative or unflattering light.

I had chance to speak with this person over the phone yesterday, and let him know the score.  But seeing as how I’m sure this is kicking around–or will, as the payments will begin after next year–I did about three minutes of research.

Let’s work from a common frame.  This, from ESPN’s “Page 2” Archive:

“The Mets are still paying for the mistake of signing Bobby Bonilla in 1992 … and they will be for a long time. Bonilla struck a deal with the team in 2000 in which it purchased an annuity rather than pay him the remaining $5.9 million of deferred money that he was owed. So every July 1 from 2011 to 2035, Bonilla will receive $1.19 million, with the total payments adding up to nearly $30 million.”

So what’s an annuity?  We could get technical and describe it as a terminating series of fixed payments over time, but having “purchased an annuity” means the Mets bought something like life insurance; Bonilla will get his yearly payments out of that kitty, built up after years of that nearly $6 million working in the market, and continuing to work as it’s drawn down.

You can buy an annuity; I can buy an annuity.  In every case I’ve discussed annuities, they’re tax-deferred.  But I don’t know what arrangement the Mets made on behalf of Bonilla, and whether a company can own a tax-free annuity for a man.  I’m sure there’s a way to make it happen.

I know he’s forty-six, presently, and will be forty-eight in 2011, and seventy-two in 2035.  Letting $5.9 million dollars grow over time, tax-free, seems like a nice way to build a nest egg for Bonilla and get a little extra scratch out of the deal for the Mets.  Provided that money was invested aggressively but not poorly (… ::cough:: …), there should be plenty to keep Bobby in Bicycle decks and the Mets in orange-and-blue.

At the very least, if the money was invested safely (… ::COUGH:: …), they should certainly earn their $5.9 million back over the life of the annuity.  At least.  Again, if invested safely.

Robot cats may take over the world by 2035, enslaving humanity in their pitiless litter mines, so who’s to say what’ll happen to the New York Mets before then.  As long as the main thrust of the annuity is honored (Bobby Bo gettin’ his), they could sell it to an another company, essentially giving that company the right to earn the interest.  I mean, that company could hypothetically get Bonilla to amend the annuity, earning him magic beans instead of the roughly $28.5 million he would earn over its life.  Sterling Mets, LP, is a private company, so it’d be up to them to even say anything about what they’ve done with the arrangement.

I’ll say this: $1.19 million won’t buy much in 2035.  This little nugget from Money magazine back in 1986 details home prices in various cities.  A three-bedroom home in New York cost an “astonishing $189,000” back then.  Try buying a three-bedroom for $189,000 now, and make sure it’s not in East New York, or the industrial wastes of Bushwick, or some other sort of demilitarized zone.

Also, Fred Wilpon co-owned the team back in 2000, with Nelson Doubleday.

Also, just because reporting on the matter is misleading, if accurate (the impression that snippet, and others, gives is that the move was beyond boneheaded) doesn’t let the reader off the hook for taking it in as same.  Diss the signing; don’t diss how they cut ties–there’s scant information there.

Also, shut up.

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