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  1. #16
    Join Date
    May 2020
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    407
    Quote Originally Posted by More-Than-Most View Post
    do you understand how money works?....
    You clearly responded without reading post #14

  2. #17
    Join Date
    Nov 2008
    Posts
    12,008
    Quote Originally Posted by zookman65 View Post
    Not really. The original deal was based on a much higher annualized rate of interest that wasn't based in anything that has happened on a macro scale in past 2 decades. That is why the total payout is so much more than the amount left on his contract when they bought him out. Inflation has averaged about 2 percent annualized rate over the past 15 years and the annuitized rate this deal was based on was about 9 percent. Mets fleeced themselves.
    Funny part is that madoff is part of the reason they fleeced themselves. He was basically guaranteeing a higher return than they gave Bonilla. If madoff was claiming 10-15% returns, anything under 10% to Bonilla was free money.

    So not only did they make a horrible investment in madoff, but they leveraged that horrible investment to make another horrible investment in the Bonilla contract. It's probably pretty safe to assume Bonilla wasn't the only bad decision they made based off madoff's returns.

  3. #18
    Join Date
    Nov 2008
    Posts
    12,008
    Quote Originally Posted by ThomasTomasz View Post
    Which is why the Lerner family is nuts to give out the deferred money that they are giving to Scherzer, Strasburg, Corbin and others. They wanted to give heavy deferred deals to Harper last off-season, and Rendon this off-season. It's absolutely nuts, but at least this money doesn't have interest, unlike the Bonilla deal.
    Brewers use deferred money alot too. I dont think it's that bad of an idea as long as you aren't paying a huge annualized rate. I get it's going to be annoying in 10 years when those guys are long retired but you have to pay them a few mill every year, but it should allow you to compete now, during their primes, with more money.

    Plus I think it's a nice safety net for players too. I would hope the players who are earning contracts large enough to warrant deffered money aren't stupid with their money, and it's very likely that taking $3 mill right now instead of $4 mill in a few years is a better call since you can invest it, but I do think there's something to be said about not having to worry about it and knowing you'll see that money. Keeps you from being tempted to spend it now as well.

  4. #19
    Join Date
    Oct 2011
    Location
    Brooklyn
    Posts
    37,531
    Its become pretty regular practice for teams to defer money for years after a player's career is over. The Orioles for example will be paying Chris Davis until he is 51 years old.

  5. #20
    Join Date
    Nov 2009
    Location
    Metroplex
    Posts
    2,754
    Quote Originally Posted by crewfan13 View Post
    Funny part is that madoff is part of the reason they fleeced themselves. He was basically guaranteeing a higher return than they gave Bonilla. If madoff was claiming 10-15% returns, anything under 10% to Bonilla was free money.

    So not only did they make a horrible investment in madoff, but they leveraged that horrible investment to make another horrible investment in the Bonilla contract. It's probably pretty safe to assume Bonilla wasn't the only bad decision they made based off madoff's returns.
    That's right!. Thanks for the reminder buddy. I had totally forgotten that tidbit about Madoff.

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