Bobby Bonilla Day, celebrated every July 1, is an unofficial baseball holiday commemorating an infamous 2000 contract buyout. The New York Mets agreed to pay former player Bobby Bonilla roughly $1.2 million annually from 2011 to 2035.
Despite not playing for the team since 1999, he receives a check for exactly $1,193,248.20 every year.The story behind this bizarre annual payout involves a buyout, a negotiated interest rate, and Bernie Madoff:
The Buyout: In 1999, the Mets decided to release the aging and struggling Bonilla, who was owed $5.9 million for the upcoming season.
The Deferral: Instead of paying him the $5.9 million in a lump sum, the Mets and Bonilla's agent agreed to delay the payments until 2011, with an 8% annual interest rate attached.
The Madoff Factor: Mets ownership at the time readily agreed to the high 8% interest rate because they were deeply invested with financier Bernie Madoff, who was promising them double-digit, seemingly fail-proof returns.
The Fallout: Madoff's investments famously collapsed in 2009 when it was revealed to be a massive Ponzi scheme. The Mets lost the money they were using to fund the agreement, while Bonilla's heavily-interest-bearing contract remained a binding legal obligation.
The Result: When the deferment period ended in 2011, the annual payouts began. Because of the compounding interest, Bonilla will ultimately collect a total of nearly $30 million over the 25-year span.Because of the sheer size and longevity of the deal, baseball fans and sports media eagerly mock the Mets' financial miscalculation every July 1.