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savafan
04-25-2010, 11:14 AM
http://www.cnn.com/2010/LIVING/worklife/04/24/weird.baseball.contracts/index.html?hpt=C2

wolfboy
04-25-2010, 11:32 AM
http://www.cnn.com/2010/LIVING/worklife/04/24/weird.baseball.contracts/index.html?hpt=C2

Interesting article. Thanks for posting.

Did I read this part right?


The problem was that the team still owed Bonilla $5.9 million in guaranteed salary.

Bonilla's agents worked out a deal with the Mets where he would defer the salary if the team would pay him $1,193,248.20 every July 1 from 2011 to 2035. Not a bad deal for someone who was so bad the team basically paid him to go away.

So the team owed Bonilla $5.9 million, but agreed to pay him roughly $28.6 million over 24 years instead?

Has anyone else ever heard of this? There has to be more to the story.

oneupper
04-25-2010, 11:35 AM
Interesting article. Thanks for posting.

Did I read this part right?



So the team owed Bonilla $5.9 million, but agreed to pay him roughly $28.6 million over 24 years instead?

Has anyone else ever heard of this? There has to be more to the story.

Methinks typo. 2035 should be 2015.

VR
04-25-2010, 11:44 AM
It's accurate. Not sure what the 'deferred value' of the original 5.9M is....certainly would make it a bit more palatable.

wolfboy
04-25-2010, 11:49 AM
Methinks typo. 2035 should be 2015.

I think it's correct. A quick Google search shows multiple sites listing it as 2011-2035. Who knew the Mets issued annuities?

oneupper
04-25-2010, 12:00 PM
I think it's correct. A quick Google search shows multiple sites listing it as 2011-2035. Who knew the Mets issued annuities?

Yes. It is correct. And the math is also. The Present value (as of July 1, 2000) of Bobby Bonilla's payment stream is exactly...$5.9 million, when discounted at 8%.

Mr. Bonilla got himself one fine annuity.

kaldaniels
04-25-2010, 12:12 PM
Yes. It is correct. And the math is also. The Present value (as of July 1, 2000) of Bobby Bonilla's payment stream is exactly...$5.9 million, when discounted at 8%.

Mr. Bonilla got himself one fine annuity.

Off the track we go...

Can the common folk buy such a product on the open market. I'd love to plunk down 1000 dollars today in exchange for receiving ~180 dollars a year from the year 2020 to 2045. Or do you come out ahead investing that 1000 in a bond fund starting today? Maybe I'm an idiot though.

GAC
04-25-2010, 12:47 PM
Rolen gets a suite for all away games.

jojo
04-25-2010, 12:56 PM
Rolen gets a suite for all away games.

Thats sweet...

oneupper
04-25-2010, 01:28 PM
Off the track we go...

Can the common folk buy such a product on the open market. I'd love to plunk down 1000 dollars today in exchange for receiving ~180 dollars a year from the year 2020 to 2045. Or do you come out ahead investing that 1000 in a bond fund starting today? Maybe I'm an idiot though.

You could never get an implicit 8% rate at a financial institution today. Not a legit one, at least. You can get any bank or insurance company to sell you an annuity, but it won't look this good in terms of payout to principal.

As for Bond Funds or individual bonds, there are some options still available.
(i.e. AIG 2058 yielding about 9,2%, one of many high-yield funds). There are, as always, risks involved. Please consult your financial advisor before investing (or not).

Mr. Bonilla's financial advisor should be commended for this. Nice yield, good risk (the Mets). Sets up his retirement well.
Nice to see someone looking after the ballplayer, its not normally the case.