I thought I would share this story which is so symptomatic of our time and age on so many levels
Bobby Bonilla was a good, but not great, baseball player for the Pittsburgh Pirates in the late 1980s/early 1990s. He was able to parlay these years into a series of obscenely rich and guaranteed contracts in the 1990s. In the meantime, he got fat and lazy as a player (famously playing cards in the clubhouse while his team lost in the playoffs). Known as a clubhouse cancer and a coach killer, the New York Mets, so eager to get rid of him, bought out the last year of his contract at $5.9 million in 2000.
Buying out a players contract is not unusual. What was unusual is that the Mets arranged for the $5.9 million payment to be postponed for 11 years- with the first installment starting in July 1, 2011- and then paid for over 25 years at 8% interest. To put this another way, the Mets are paying Bobby Bo (as he is known) $30 million for a $5.9 million payout.
Why would the Mets agree to such a ludicrous deal?
Well, you see, the Mets would invest the $5.9 million with a brilliant investment manager who could out-perform the earn-out. The manager?
Bernie Madoff.
Have a great weekend.
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