Want financial freedom? Simply follow the financial logic of Bobby Bonilla
Want financial freedom? Simply follow the financial logic of Bobby Bonilla

Franchisors would be in trouble if they deferred royalty payment to create a structure like Bonilla, but wouldn’t it be fun?

Bobby Bonilla, we salute you.

Every July 1st, from 2011 to 2035, former Major League Baseball player Bonilla will forever be seen as a financial genius for deferring the $5.9 million the Mets owed to him in the 2000 season. Each July 1st he receives a payment of $1.19 million, even though he hasn't played professional baseball in 16 years.

Bonilla’s agent orchestrated a deal that deferred payment with an 8 percent annual interest rate.  ESPN updated its annual celebration of genius (not to mention, Bonilla also lives in Florida – a state with no income tax). In a story titled, “Happy Bobby Bonilla Day! His annual $1.19 million payday is here” ESPN’s Darren Rovell wrote:

With seven payments now in, Bonilla has now collected $8,352,737.40. There are 18 more payments due to Bonilla through 2035. When all the payments are made, Bonilla will have turned that $5.9 million into $29.8 million.

But that's not all.

Bonilla also has deferred money that is being paid by the Mets and the Baltimore Orioles, who took Bonilla for the final year and a half (1995 and 1996) of his first Mets contract, a five-year deal signed in December 1991 for $29 million.

The two teams split a $12.5 million payment which comes in 25 installments. That deal started in 2004, so Bonilla has received 14 payments worth a total of $7 million, and he will receive another $5.5 million through 2028.

So to recap, Bonilla has already received $15.3 million in deferred money. Over the next 18 years, he has another $27 million to go.

Could a franchisor get this smart? Maybe if you hired Bonilla as a CFO – but, probably not.

 

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