What is a vesting option in MLB?

Question

What is a vesting option in MLB?

Answer 1

A vesting option is a conditional clause in a MLB contract that usually guarantees a portion of a contract when the conditions are met. For example, a player has a three year contract through 2010 and he's a veteran with six or more years of ML service time. His contract contains a vesting option for 2011 - say, for a hitter, he had to have 500 at bats in 2010. Once he reaches his 500th at bat in 2010, his oprion is vested and now becomes a guaranteed contract for 2011.

Answer 2

Typically, a clause in the player's contract that is fulfilled by reaching defined playing time milestones. Sometimes the clause is a bonus, some of which carry over to subsequent contract years as increase in base pay; or guaranteeing an existing option year at the end of the contract.

Let's use Frank Thomas' 2007-09 deal with Toronto. His base pay: $1M in 2007, $8M in 2008, and $10M in 2009 if the option vested. The vesting metric was reaching 1000 plate appearances (NOT at-bats; they are different, and this is important) in 2007-08 or 525 PA in 2008 alone. If he reached either mark, his 2009 season would be guaranteed, and as he had 624 PA in 2007, he needed only 376 more to trigger the option vesting. The Jays didn't want to be on the hook for $10M next year, so they released him in April, after he had accumulated 72 PA.

Vestable options tend to be in the contracts of older players, as a hedge against their health or general level of performance (diminishing players tend to get less playing time, on merit).

Answer 3

In law, vesting is to give an immediately secured right of present or future enjoyment.

so in the MLB its part of the contract that guarantees a player will not be dropped/cut/traded away