One more interesting tidbit to the Baltimore Orioles re-signing Chris Davis on a record deal as far as the franchise is concerned is how the payment of $161 million is going to be spread out. Hint? Davis is going to be receiving a paycheck from the Orioles long after he retires.
Davis signed a 7-year, $161 million contract with the Orioles, which doesn’t mean $23 million a season like you think it would. Davis will make $17 million annually through the 2022 season, and then will begin receiving payments of $2.8 million each year through 2037. The Orioles wanted to commit a lot of money to him, but just like most of major league baseball, these kinds of deals are a bit of a reach for them, so they had to defer money to 22 years from now.
While it’s not completely similar, this always reminds us of the Bobby Bonilla – New York Mets episode, as the 52 year old is still receiving payments from the Mets to this day, with his annual check becoming something of a once-in-a-year joke.
Bonilla was released by the Mets after the 1999 season for his poor performances and other issues like clashing with manager Bobby Valentine and playing cards in the clubhouse while the team was playing on the field. The Mets still owed him $5.9 million but didn’t want to pay him that kind of money, so Bonilla offered them a deal: Bonilla would defer payment for a decade, and the Mets would pay him an annual paycheck of $1.19 million starting in 2011 and ending in 2035, adding up to a total payout of $29.8 million.
Why would owner Fred Wilpon take the deal? At the time he was heavily invested in what turned out to be a Ponzi Scheme by Bernie Madoff, thinking the 10% returns he thought he was getting on his investments with Madoff outweighed the 8% interest the Mets would be paying on Bonilla’s initial $5.9 million.
Davis isn’t getting cut by the Orioles anytime soon (we think) so it might not become a joke like the Bonilla situation, and yet it’s hard not to look a little bit weirdly at a team paying someone his salary well after he’s left the game, even if for them (and probably him as well) it makes perfect financial sense.