Bobby Bonilla’s peculiar contract has become legendary in the world of baseball. Every July 1, he receives a check for $1.2 million from the New York Mets, despite not playing professionally since 2001. This unusual arrangement stems from a deal that deferred a portion of his salary, ensuring payments will continue until 2035, when he will be 72 years old. However, Bonilla isn’t the only player to sign such a deal; he wasn’t even the first Met to do so.
Darryl Strawberry’s Deferred Earnings
In 1985, Darryl Strawberry, another prominent Met, signed a contract that also included deferred payments. Unfortunately, the financial benefits from this arrangement do not end up in Strawberry’s hands. Instead, a stranger, who has never played professional baseball, is set to receive approximately $9,000 each month until August 2033.
Darryl Strawberry in 1983 (via Getty)
Over his career, Strawberry earned around $30 million, with his rookie salary in 1983 amounting to $36,000 (equivalent to roughly $120,000 today). By 1985, he signed a deal for $7.1 million through 1990, with deferred payments constituting 40% of his final year’s salary. This led to a substantial payout plan initiated in 2004, where monthly payments began at $8,891.82.
A Financial Downfall
Despite his lucrative contracts with several teams, including the Dodgers and Yankees, Strawberry encountered significant financial issues, particularly with taxes. He failed to pay approximately $542,572 in federal income taxes between 1987 and 1990. When his annuity payments began in 2004, the IRS placed a levy, claiming the monthly checks to cover his tax liabilities.
Complications continued during his divorce in 2006 when a judge ordered part of his annuity to be allocated for spousal support. However, the IRS intervened, asserting its claims on the annuity, resulting in its legality being assigned to the government over any divorce settlements or bankruptcy claims.
The IRS Auction
Due to the government’s preference for lump-sum payments, the IRS auctioned off Strawberry’s lucrative contract rights in January 2015. The auction started with 223 monthly payments totaling around $1.98 million, with a minimum bid of $550,000. The eventual winning bid reached a staggering $1.3 million.
This high bid might seem unwise compared to stock market investments, especially given the guaranteed 5.2% return, which was attractive during a period of near-zero interest rates. The buyer secured a reliable income stream backed by Sterling Mets LP, emphasizing the significance of context in financial decision-making.
For Mets fans, it’s a quirky reminder that until August 2033, the team is regularly sending nearly $9,000 monthly to an individual unrelated to the sport.
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