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The structure of David Ortiz’s contract

03.24.14 at 1:55 pm ET
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The Red Sox announced on Sunday night that David Ortiz‘s one-year, $16 million contract extension for 2015 includes both a team/vesting option for 2016 and a team option for 2017.

Here’s how the 2016 option works: It starts as a $10 million team option for the 2016 season. If Ortiz reaches 425 plate appearances, the option would vest and become guaranteed at $11 million. After 425 plate appearances, Ortiz has a number of bonuses to reflect the playing time with a maximum earnings potential of $16 million at 600 plate appearances. Here is how the bonuses are structured:

425 plate appearances – $11 million
475 plate appearances -  $12 million
525 plate appearances – $13 million
550 plate appearances – $14million
575 plate appearances – $15 million
600 plate appearances – $16 million

The 2017 option is a straight team option that likewise starts at $10 million. The team option increases starting at 425 plate appearances (to the same $11 million figure) up to the potential for $16 million if Ortiz has as many as 600 plate appearances), but there is no vesting clause that would guarantee the 2017 salary based on plate appearances.

The team/vesting option for 2016 represents a form of risk-sharing meant to ensure that the designated hitter’s salary beyond this season is tied to his health and productivity. Just as Ortiz and the Sox structured his current two-year deal in a fashion meant to ensure he was fairly compensated if healthy — the two-year, $26 million contract featured a $15 million salary for 2013 and $11 million salary for 2014, with the latter figure increasing to $15 million because Ortiz spent fewer than 20 days on the DL in 2013 — so does the new contract reward Ortiz if he remains a Sox lineup linchpin.

“€œWe feel great that this virtually guarantees that David will finish his career with the Red Sox,” GM Ben Cherington told reporters. “And more importantly … we feel great that it means that David’s going ot be in the middle of our lineup for longer. And that’s really important to us.”

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