BOBBY BONILLA DAY COMING on HEELS of HISTORIC OHTANI DEFERRAL

Bonilla wasn’t the only MLB player to delay pay and the amount was not the most significant, however it was the most widely known prior to Ohtani’s $600 million delay.

By Kurt Badenhausen

Jan. 1st, 2024 at 11:32 am

Shohei Ohtani and his CAA agents stunned the world of sports in December when they announced his free-agent deal to the Los Angeles Dodgers. The $700 million figure beat that of the prior MLB record contract–$426.5 million for Mike Truout. But there was a second shocker: All however, $20 million from the contract was put on hold for.

Do not forget Bobby Bonilla, there is an newly hired coach in the clubhouse responsible for one of the most famous salary deferrals in baseball history.

Bonilla who was a Six-time All-Star was the highest paid baseball player at one time. But 23 years after his retirement, the baseball player may be remembered for the contract deferral near the conclusion of his playing career.

After his second stint as a player of his second team that is the New York Mets and a poor 1999, the team sacked Bonilla but they still have to pay him $5.9 millions due in 1999. Bonilla and his agent Dennis Gilbert, offered to put the debt off for a decade and spread the amount over 25 years at an interest rate of 8 percent. Mets manager Fred Wilpon signed the agreement believing his high-yielding investments with Ponzi fraudster Bernie Madoff would continue. The interest rate was very high that meant a $1.19 million payout every July 1 from 2035, at which the time Wilpon will turn 72 old. at the age of 72, which is equivalent to a payout that is $29.8 million.

“I always consulted players about deferring some of their earnings” Gilbert said in an interview with a the video. “It’s taking money from the bank of your choice and depositing it in that future’s account. “

Gilbert founded his financial advisory and life insurance firm prior to creating the Beverly Hills Sports Council agency together alongside Rick Thurman in order to serve MLB players on contractual agreements. It was a representation agency for players like George Brett, Jose Canseco, Barry Bonds, Mike Piazza, Curt Schilling, Rickey Henderson along with Trevor Hoffman. Gilbert has been able to sell his stake in BHSC the year 1999 however, he has continued to aid players with their estate planning and insurance. Gilbert is also the director of Perfect Game which is a venue for baseball and youth softball tournaments, as also showcase events.

Bonilla wasn’t just the first MLB player to have deferrals in the deal. In 1984, relief pitching Bruce Sutter signed a six-year, $9.1 million contract with the Atlanta Braves that would ultimately be worth $47 million thanks to the 12.3 percentage interest. Prior to this, Bonilla as well as the Mets had signed a deferred agreement which they reached together with player Bret Saberhagen. The agreement would be worth $250,000 per year over 25, years. in the year 2000. Ken Griffey Jr. was the main beneficiary in his $112.5 million extension to his contract, along with Cincinnati Reds deferred at 4 percent interest. The contract was worth $5 million per year starting on the 1st of September, 2009 with the last payment due by the end of the coming year, according to his long-time agent Brian Goldberg; only four players on the Reds 2024 roster will be paid higher. Chris Davis retired in 2021. His deferrals which aren’t based on interest began the year before, and will be worth $59 million by 2037.

Deferrals are a regular aspect of numerous nine-figure MLB contracts in the past year. For example In 2015 Max Scherzer delayed payment on the lower portion of his $210 million deal with The Washington Nationals. Jacob deGrom ($52.5 million), Chris Sale ($50 million) and Nolan Arenado ($50 million) were all subject to deferrals in recent contracts.

There is a belief that the Dodgers is the franchise that has been the most active when it comes to the deferrals. Mookie Betts was able to have a half of the $115 million he earned in his 365 million Dodgers contract deferred. In 2022, Freddie Freeman signed for $162 million. The figure included $57 million that was put on hold. In March of this year, Will Smith signed a $140 million extension, which included the option of deferring 50 millions. Ohtani will get $68 million a year from the Dodgers from 2034 onwards.

The primary difference between these contracts with Bonilla’s contract is how much interest they pay paid for this deferral. It’s uncommon for the most recent deferrals to be accompanied by interest, with Stephen Strasburg’s Nationals contract is an exceptional case. The interest rate is of 1percent on the salary paid deferred. Deferrals with no interest mean the luxury tax will be reduced for teams. Owners must pay for the future salary, they can do so in a discounted way in the event that the payments are likely to grow in the savings accounts.

Deferrals for athletes could offer tax benefits in the event that the money is paid back after the end of their career, when they can live in a state with lower tax rates, or has no tax on their income that is derived from state sources in any manner. The Ohtani case has raised awareness of the loophole that exists in California which has the state’s highest marginal tax rate which amounts to 14.4 percent for those who earn more than $1 million. State lawmakers want Congress to shut down that loophole.

Bonilla and Griffey both live in Florida and don’t pay the tax of income to this state.

Mets aren’t the only MLB team paying Bonilla the money. In addition Bonilla still receives an unpaid salary that is deferred for his time for the Baltimore Orioles worth $500,000 each year until 2028.

Gilbert states that he’s grateful to long-time journalist for sports business Darren Rovell, for bringing attention to Bonilla’s annual pay and declaring July 1 as Bobby Bonilla Day. Steve Cohen, who bought the Mets from the Wilpons in 2020, has stated on several occasions when he wants to commemorate Bonilla Day in Citi Field in the near future. He has suggested presenting a big payment for Bonilla. The Mets are not planning to celebrate Bonilla Day this year in accordance with the statement.

Gilbert continues to work in the insurance sector and helps athletes protect their assets. “Athletes can enjoy a certain lifestyle, and their costs tend to remain the same, however the earnings don’t rise, rather it declines,” Gilbert said. “It’s not about how much you make the most rather, what you can save. This is it. “