What is Bobby Bonilla day and why is it celebrated on July 1?
Bobby Bonilla Day is celebrated on 1 July, but it does not pay tribute to the New York Mets slugger’s playing ability. It’s a nod to his business savvy.
The first day of July is Bobby Bonilla Day, a mock holiday named after a former third baseman of the New York Mets. This day is not his birthday, nor does it mark a historical home run or some other feat of baseball.
It is when he receives his annual salary of $1.19 million from the Mets, a paycheck he will continue to receive until 2035, when he will be 72 years old. This is not the usual retirement scheme of the team - Bonilla just happened to make the right deal at the right time.
Bonilla’s sound financial decision
In 1999, the Mets released the six-time All-Star with $5.9 million remaining on his contract. Instead of getting the balance in full, Bonilla agreed to a deferred payment plan proposed by the team. He would defer the money for ten years, and in return he would earn eight percent interest and receive annual payments for 25 years.
The Wilpons, who owned the Mets at the time, were anticipating huge profits from their investments with fraudster Bernie Madoff. They also assumed they would get a windfall if they invested the money owed to Bonilla instead of paying out the rest of his contract in one lump sum, and so they suggested the protracted payment scheme.
The proposal was thought to be mutually beneficial, but the team owners eventually lost a lot of money to Madoff’s Ponzi scheme, and had to give the outfielder the bigger payout to boot.
The power of compounded interest
In 2011, Bonilla started receiving his payments after the initial $5.9 million ballooned to $29.8 million. This amount spread over 25 years comes to $1.19 million per annum.
Last year, the Mets embraced the “holiday” instead of lamenting the hole that it burned in their pocket. The team decided to commemorate the day by holding a special overnight stay for fans, with one guest even getting the chance to throw the ceremonial first pitch.