Today is “Bobby Bonilla Day”, when the Mets issue a $1.19 million check to their former slugger, even though he hasn’t played for them in 26 years. Bonilla will receive this annual payment through 2035 because he agreed to defer the remainder of the $5.9 million owed to him in 2000 at an interest rate of 8 percent. At the time, the Mets wanted to free up money to pay other big-salaried players like Mike Hampton and Derek Bell, who helped them win the pennant that year. Mets owner Fred Wilpon also figured to make the annual payments using a double-digit return he was getting from an amazing investment through a guy named Bernie Madoff. Oops.
Some criticize Bonilla for getting money for doing nothing, but the fact is that was money owed to him, and no one forced the Mets to offer him this deal. Freeing up that money did allow the Mets to make a serious run at a pennant. And it was hardly the worst deferred deal from that era. The Braves are still paying Hall of Fame reliever Bruce Sutter - who retired in 1988, Bonilla’s third year in the league - $1.12 million each year through 2022, when he receives a $9 million balloon payment. Former Royals reliever Al Hrabosky signed a free agent deal with the Braves in 1980, collected just seven saves with them, and was given an annual payment of $180,000 through 2010.
The Royals also got in the business of deferred deals when they looked to lock up their core in the 1980s. Owner Ewing Kauffman brought on Memphis real-estate tycoon Avron Fogelman as a minority owner in 1983 with the expectation that Fogelman would eventually own a controlling interest. The addition of Fogelman brought added capital and allowed the team to sign superstar George Brett to a “lifetime contract” in 1984 that would pay him $1.5 million per year through 1991 with two options at the end of the deal, and some other financial incentives including some real estate deals on properties Fogelman owned.
The following spring, the Royals looked to commit to speedster Willie Wilson, who was eligible for free agency after the season, and closer Dan Quisenberry, who could depart after the 1986 season. Wilson was on the verge of turning 30, and Quiz was already 32, perhaps not the best age to commit to a multi-year deal. But the Royals went above and beyond committing to the pair.
In April of 1985, Quisenberry signed a deal that would pay him $6 million over the next five seasons, and permit him to invest $2.6 million of his salary in Fogelman’s real estate holdings, with a guarantee of $45.85 million over 41 years. Wilson signed a deal that would pay him $5.45 million over four seasons, with the right to invest $1 million of it for a guarantee of $21.56 million over 41 years. So under the terms of the deal, both players would have received payments up to this day, through the year 2026.
“I think this is the wave of the future,” said Royals General Manager John Schuerholz. “What we're doing will stabilize costs, maybe reduce them. We are a lot more fiscally responsible than owners who take chances year by year and, thus, leave themselves vulnerable.”
The deals, including Brett’s contract, were tied to a 700-unit apartment complex in Nashville called “Stewart’s Ferry.” The trio could stand to make up to $93 million, but only $25 million would go against the Royals’ payroll, and the players would get the benefit of having their investments in a tax shelter.
The lifetime contract the Royals signed were almost immediately criticized as overly lavish. Fogelman himself expressed regret less than two years later.
‘My main problem is the length of the commitments; that shouldn’t have been done,’’ Fogelman lamented. Have his fellow owners criticized him for the contracts? ‘’No other owner has followed my course of action so I assume it wasn’t accepted as a proper course of action by others. It might have been overkill.’’
Fogelman began having liquidity problems in the late 80s - not enough revenue was coming in to pay off debts. The real estate value had not materialized, Quisenberry’s 24.7 percent share was worth $4.9 million by 1990 and Wilson’s 9.5 percent share was worth less than $2 million by 1990, far less than the guaranteed amount. Both players were at the end of their careers and had been let go by the Royals, and ended up settling with the Royals on the amount owed to them.
“I’d prefer not to announce any figures because they’re ridiculous,” said Kauffman.
Eventually, Fogelman defaulted on a $34 million loan from Kauffman and was bought out of the ownership group. Kauffman looked to sell the team again in the early 90s, but no bids met his threshold. He died in 1993, and his wife Muriel died a year later, leaving the team in the hands of a non-profit directed with finding an owner in Kansas City.
Deferred contracts are a way for teams to spread financial pain off into the future, and Bobby Bonilla is not the first, or last player to enjoy getting a check well past retirement.