Let’s say your boss shows up and decides he’s had enough of you. You’re not helping the company anymore and you’ve become a distraction, so he offers you millions of dollars just to go away. Who wouldn’t take that deal?
There are only two professions where that scenario can happen: CEO of a corporation or professional athlete. It is not even the case for all athletes, as NFL football contracts are not guaranteed as most baseball (MLB) or pro basketball (NBA) contracts are.
Sometimes athletes get paid to sit when their skills expire quicker than their guaranteed contracts. Other times, teams have to include all or part of their pay when they trade them to other teams, in which case the recipients are trying to beat the guy who pays their huge salary!
Brian Wilson falls into that first category. The Los Angeles Dodger pitcher did not have a good season in 2014, but he had a good agent. He astutely exercised an option in his contract guaranteeing him $9.5 million for 2015 six weeks before the Dodgers released him last year. Ka-ching!
Former Dodger teammate Matt Kemp’s salary for this year is a cool $21 mill, part of an eight-year, $160-million contract he signed in 2011. When they traded him to the rival San Diego Padres in the off-season, the Dodgers agreed to pay his new team $18 million of his salary this year.
The Dodgers have replaced the NY Yankees as the champion big spenders. Not only do they top the list at nearly $300 million in payroll (plus an 8-figure luxury tax they’ll have to shell out), that figure includes about $60 million paid to players NOT to play for the Dodgers this season. When Dan Haren, for example, was traded to the Miami Marlins, the Dodgers gave his new team $10 million to pay his salary. (He has since been traded again.) As the Yankees learned the hard way, all that spending does not guarantee victory; as of this writing, the Dodgers have lost 5 games in a row.
Here are some more examples of athletes being paid not to play.
- Allan Houston – The New York Knicks signed Houston to a six-year, $100-million deal but Houston’s knees began to give way after the first two years. He did not play in the final two years of his contract, but racked up $19 million in the 2005-2006 season, giving him the second-highest paid salary in the league while not playing a game. He officially retired the next season, taking the Knicks off the hook for his salary. In an interesting twist, Houston’s contract led to the NBA’s “Allan Houston” rule allowing teams to release a player and take his salary out of consideration for the luxury tax. Since Houston retired the year the rule took effect, the Allan Houston rule did not apply to Allan Houston.
- Alex Rodriguez – Do you think A-Rod didn’t get any money when he was suspended for the 2014 season for using performance-enhancing drugs? He lost most, but not all of his $25 million seasonal salary, but the suspension only covered the 162 game days in the 183-day regular season. That means A-Rod still got paid $2.9 million for non-game days, not to mention $3 million in leftover signing bonus. They should have made him clean the clubhouse to earn his cash.
- Bobby Bonilla – The Mets slugger received an unusual offer on his release prior to the 2000 baseball season: deferred payments on the $5.9 million he was owed. Talk about deferred — the checks started coming in 2011. In all, Bonilla will end up with $29.8 million, getting annual checks that are a bit less than $1.2 million until 2035. (Presumably Social Security will take over then.)
- Steve Young – The Super-Bowl-winning quarterback of the San Francisco 49ers is still cashing checks — but not from the 49ers. Many people forget that Steve Young started his career in 1984 with the Los Angeles Express of the USFL, the upstart rival to the NFL that lasted only a few years before folding due to massive financial failure. In a move that makes the Bonilla contract look sensible by comparison, the Express offered Young a deferred, guaranteed $40 million, 43-year contract. That’s not a typo. Young will be getting checks until 2027 because the owners of the Express guaranteed the contract even if the USFL folded or Young left for the NFL. Both came to pass within a few years.
These are but a few of the examples of “pay to go away” in professional sports.
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