http://www.nytimes.com/2011/02/02/sports/baseball/02mets.html?pagewanted=all&_r=0

One former executive with the Mets recalled how it could work:

“I remember vividly Madoff’s name being brought up a lot when” the team “would negotiate contracts, particularly with deferments,” said the former executive, who would not be identified because he did not want to harm his career in baseball. “That money would be turned over to Madoff.

The former employees of the Mets said substantial aspects of the club’s financial operations seemed to flow through, or wind up with, Mr. Madoff — annuities set up for players, cash generated by sponsorship deals, and more. The team regularly discussed investing deferred money from long-term player contracts in Madoff accounts. Bobby Bonilla was among the players who had their deferred money put with Mr. Madoff, one former employee said.

In those cases, the players would agree to take less money up front and be paid over a number of years, earning interest. It appears the Mets would be able to keep any money earned over that agreed rate, and Mr. Madoff regularly produced returns that outdid prevailing interest rates.

And when the costs of disability insurance spiked, the former employee recalled, the Mets began to self insure. They did it by investing premiums with Mr. Madoff, he said.