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The problem with this, of course, is that Bobby Bonilla turns 50 on Saturday and retired after the 2001 season. He hasn’t actually been on the Mets roster since 1999. The reason why his name keeps coming up is because of a highly-publicized contract buyout from 2000.

The Mets didn’t want Bonilla on their team for the 2000 season. With a $5,900,000 salary and a 37th birthday in February, he carried little trade value (never mind the fact that Bonilla had been worth -1.5 fWAR the previous 2 seasons, despite only appearing in a total of 160 games). The Wilpons wanted Bonilla off the roster, and wanted additional financial flexibility in the interim. So they came to an agreement on his buyout:

[S]tarting on July 1, 2011, Bobby Bonilla will remain on the franchise’s payroll for 25 years, collecting an annual salary of $1,193,248.20. Those are the terms the Mets agreed to Jan. 3, 2000, when they bought out the final year of Mr. Bonilla’s contract.

- There’s No Accounting for This, Wall Street Journal (July 1, 2010)

The $1.19M figure was agreed upon was based on two tenets:

(1) Bonilla’s $5.9M salary would be deferred until the 2011 fiscal year

The Wilpons would not owe Bobby Bonilla any compensation for 11 1/2 years, and would be free to spend the money as they wish until July 2011, at which point they’re required to pay the annual installments until 2035.

(2) In compensation for this, the money would collect interest.

According to the WSJ article I quoted above, the money would collect 8% interest in the meantime (the US Prime Rate in January 2000 was 8.5% – a nominal 5.8% interest on top of 2.7% inflation).

For the sake of discussion, I’m going to propose a third tenet:

(3) The original $5.9M sum is viewed as belonging to Bonilla, which he then invested into the Mets at the agreed upon terms.

March 28, 2012; Port St Lucie, FL, USA; New York Mets co owner Fred Wilpon in the stands during a spring training game against the Washington Nationals at Digital Domain Park. Mandatory Credit: Brad Barr-USA TODAY Sports

If you wish, you can argue that it was, in effect, the Wilpons borrowing the money from Bonilla, but either way it’s the same. What I’m establishing is that the $5.9M is, in effect, a sunk cost to Fred Wilpon; that money ends up in Bonilla’s pockets no matter the agreement. So what we’re going to do is treat the $5.9M as in a vacuum – as a deposit into an interest bearing account that collects 8% interest and begins paying out in the 11th fiscal year. At the end, Bonilla will have earned a total of $29,831,205 by the year 2035. Assuming the 2.7% inflation rate at the time he signed the agreement, the total value would be worth $16,464,019 in 2000. Not only has Bonilla effectively secured his future (and his family’s) with the annuity payments, he’s nearly tripled the year-2000 value of his contract!

This should all sound familiar, because this is how banks work. When you deposit money into a savings account, for example, you’re giving your bank the freedom to use your money for ventures they see fit (lend it to others, invest it, etc.) with the caveats that (A) your money is insured if what they do with it loses money and (B) they pay you in exchange. Those payments come in the form of interest.

The key question here is how the Wilpons invested the $5.9M (given the tumult of the Madoff scandal, among other things, discussing this could fill novels, let alone this blog post). Hypothetically, if the Wilpons were to invest the money at 8%, they would break even (they would actually profit 8.4 cents).

At this point, it becomes clear why the Wilpons would be willing to make such a deal. Were they to collect zero interest (above inflation) on the $5.9M, their liability would be the difference between the total of the payments and the initial sum – $27,565,453 – which works out to $1,102,618 per year for each of the 25 years in which Bonilla will collect. Were we to assume that value as a lump sum to be paid out in year 25 (2035), it reflects as a $10,849,247 sum in year 2000 dollars.

So that’s it. In the most foolish eyes, the Wilpons made a $10.8M gamble in January 2000 (a safer bet than Jason Bay, in retrospect). Clearly it isn’t likely that the Wilpons just let the money sit under their mattress, so let’s check the investment.

First, we know that the average (mean) inflation rate since January 2000 has been 2.5065%. We also know that the mean Prime rate (which includes inflation) since the agreement has been 5.3386%. At that rate, the Wilpons would be paying $24,497,467 out-of-pocket over the lifetime of the agreement, a year-2000 cost of $9,641,745.

However, the Prime Rate, of course, corresponds to the rate offered to the lowest-risk lendees, so it’s not necessarily accurate to assume that the Wilpons only used that rate. I don’t know enough about investment returns or the like to accurately guess what they were getting. Reports have indicated that they were collecting as much as 12% from their Madoff investments; at such a rate they would have begun to guarantee a profit by 2018. Even at a more modest 9%, their profit (in year-2000 dollars) would be north of $8.3M, and the 8.5% prime rate at the time of agreement would have netted the Wilpons a $3.7M profit in year-2000 dollars.

It’s ultimately unknown what their investment returns are, and/or how much of it was lost in the Madoff scandal. But when the worst case scenario ends up in spreading what would be, at the time, a less-than-$11M loss over 35 years, it doesn’t seem like the disaster some make it out to be.

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October 2, 2012; Pittsburgh, PA, USA; Atlanta Braves center fielder Michael Bourn (24) reacts at the batting cage before playing the Pittsburgh Pirates at PNC Park. Mandatory Credit: Charles LeClaire-USA TODAY Sports

Point 1: The Mets decided that Bourn was too expensive, and were right to walk away. Bourn is not worth $60 million over 5 years.

Counterpoint 1: The Mets’ offer was 4 years/$48 million, not 5/$60 million. So if one is going to assess return on investment, the 4/48 figure should be used. Next, this was not a case of strategically deciding that acquiring a player was not in the best interest of the organization. Such an example would be refusing to trade Wheeler or Harvey for Justin Upton. The Bourn case is an example of gambling, and losing. The Mets figured they were the primary game in Bourn’s town, and attempted to use time, and Bourn’s uncertainty, to force Bourn/Boras to accept an offer on the Mets’ terms. All accounts suggest that the Mets and Bourn had reached an agreement on the years and dollars, and then were ready to put a case before an arbitrator to resolve the draft pick issue. Upon finding out that the case would take 2-3 weeks to resolve, Bourn walked. He walked all the way to Cleveland. If the Mets had relented, and put their best offer on the table around the beginning of February, the 2-3 week resolution time may not have been a mitigating factor to Bourn’s agreeing to playing in Queens. This one may have been mishandled by Sandy Alderson.

Point 2: Bourn does not make enough of a difference to sign him right now. The Mets are not one player away. Bourn could, at most, give the Mets 5-8 more wins, and they still won’t make the playoffs.

Counterpoint 2: The above reasoning is curious. It’s fully agreed that Bourn is NOT a savior, and that, at best, the Mets would win 5-8 more games with him. However, the Mets put a 4-year contract on the table. That’s 4 years. Bourn would still be a Met when the Mets’ plan is expected to come together, in 2014 or beyond. I simply can’t understand evaluating a 4-year signing in the first year. If the organization expects the plan to come to fruition in a year or two, Bourn would be a central piece in that plan as a CF and lead off hitter.

Point 3: It’s not wise to give contracts to players who rely on speed when they’re over 30.

Counterpoint 3: Not exactly sure when 30 year-olds qualified for the AARP. In fact, some well-known base stealers had outstanding years after age 30. From his 30th to 34th birthdays, Lou Brock stole 53, 51, 64, 63, and 70 bases. In the same years of his life, Rickey Henderson stole 77, 65, 58, 48, and 53 bases. Speed players can be productive after 30.

Point 4: Bourn strikes out to much. His OBP is not good for a lead off hitter.

Counterpoint 4: Bourn does strike out too much. His 155 Ks in 2012 are alarming. Bourn also walks only about 10% of the time, looking at BB/PA. Context is important. Is Bourn a better option at lead-off than the players the Mets have? A firm argument can be made that Bourn is a much better option than Baxter, Tejada, or Murphy, if for no other reason than Bourn’s ability to steal bases. How about this point? There would have been opportunistic benefits to having Bourn bat lead-off. His presence would have allowed the Mets to bat Tejada second, where his patience and bat control would make Ruben an even more productive player, due to his ideal slotting in the order. Also, Murphy could have been dropped to 6th, where he can drive in more runs than he can toward the top of the order. The Mets need Murphy’s “doubles ability” in a place where he can drive in more runs.

Point 5: Let Bourn walk, let’s see what other options Sandy can turn up for the OF.

Counterpoint 5: I think all fans will unite behind the idea that the Mets must improve the OF. Bourn is off the table. So, what’s the plan? Internal options (beyond Matt Den Dekker) don’t seem to be there. The 2014 FA class for OFs may include Carlos Beltran, Jeff Francoeur, and Curtis Granderson. You can see the full list here. It’s not clear that any of these players may fit the Mets’ needs and budget. Then there’s the trade route. To get a starting OF, teams will likely want youth in return. The Mets have shown a reluctance to trade the true strength of their youth, starting pitching. So if the trade route is the path to an improved OF, what pieces can the Mets trade to return quality OFs? Bourn would have solved 1/3 of the problem. It may be easier to fill two spots than three.

The debates have been fun. The outcome of the Bourn saga may not have been, for some of the fans anyway. Yes, it is time to move on. But whatever we do, let’s continue discussing The New York Mets. It’s part of being a fan, and a quality of baseball that makes the game so unique.

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