Quote:
Originally Posted by Oscar_Stanage
its actually was a good deal for the team even though it gets press as if it were stupid. They paid 8% interest on the deal.. At the time (2000), 30yr Treasuries were 6-6.5%. Based on this data point, if they went to a bank for a 30-year loan to pay Bonilla the original $6mm, they would likely have had to pay more than 8% (Treasuries + 3-4%) and pledge collateral (which they did not have to with Bonilla) In addition, I am sure there are other benefits dealing directly with the player.
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I thought the reason the Mets did this was because their owners were big investors with Bernie Madoff at the time, and they expected to earn a lot more from the money they didn't pay Bonilla in the lump sum than what they agreed to pay him over so many years.