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Sports

Carlos Rodon joining Yankees on 6-year, $162M deal, sources say

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Left-handed starter Carlos Rodon is in agreement with the New York Yankees on a six-year, $162 million deal, sources told ESPN’s Jeff Passan on Thursday.

Rodon, 30, was the top pitcher left on the market after he opted out of a contract with the San Francisco Giants following last season. He was 14-8 with a 2.88 ERA in 2022, pitching a career-high 178 innings over 31 starts. He also earned his second straight All-Star selection.

Rodon was the third pick in the 2014 draft by the Chicago White Sox but battled injuries during the first portion of his career before undergoing Tommy John surgery. He returned to elite form in 2021 when he compiled a 2.37 ERA over 24 starts, though the White Sox were careful with him down the stretch. He never pitched more than five innings over the final two months of the season.

Even with his success that year, the White Sox non-tendered Rodon that offseason, leading to a two-year deal with the Giants. It included an opt-out that he chose to exercise in November.

Rodon joins holdovers Gerrit Cole, Nestor Cortes, Luis Severino and Frankie Montas in the Yankees’ rotation, which ranked fourth overall in ERA last year. That ranking wasn’t indicative of some second-half struggles, as the Yankees were eliminated in the postseason by the Houston Astros.

The agreement, which was first reported by the New York Post, is the latest for agent Scott Boras, who again is having a rich offseason. Other deals for his clients include Carlos Correa ($350 million), Xander Bogaerts ($280 million), Brandon Nimmo ($162 million), Masataka Yoshida ($90 million), Taijuan Walker ($72 million), Sean Manaea ($25 million) and Cody Bellinger ($17.5 million).

According to ESPN Stats & Information research, Rodon’s deal is the second-largest contract the Yankees have ever given a pitcher in total value, exceeded only by Cole’s $324 million deal in 2019. Rodon gets $1 million more than CC Sabathia’s $161 million deal with the Yankees in 2008.

Between Rodon and Aaron Judge, who signed a nine-year, $360 million deal to stay with the Yankees earlier this month, the team has guaranteed $522 million in contracts this offseason.

Rodon has a career record of 56-46 with a 3.60 ERA.

He won’t have to wait long to face his former Giants team, with the Yankees set to host San Francisco on Opening Day of the 2023 season.

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Business

JPMorgan sues Tesla for $162m after Musk tweets soured share deal | Tesla

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JPMorgan has sued Tesla for $162.2m, accusing Elon Musk’s electric car company of “flagrantly” breaching a 2014 contract relating to stock trading options that Tesla sold to the bank.

The options, or warrants, give the holder the right to buy a company’s stock at a set “strike” price and date. The suit, filed in a Manhattan federal court, centres on a dispute over how JPMorgan repriced its Tesla warrants as a result of Musk’s notorious 2018 tweet that he was considering taking the carmaker private.

It is unusual for a major Wall Street bank to sue such a high-profile client, although JPMorgan has done relatively little business with Tesla over the past seven years, according to Tesla’s filings and Refinitiv data.

“We have provided Tesla multiple opportunities to fulfil its contractual obligations, so it is unfortunate that they have forced this issue into litigation,” a spokesperson for JPMorgan said in a statement.

Tesla did not respond to requests for comment.

The options agreement meant that if Tesla’s share price was at or above the strike price of $560 on the day the warrants expired in June and July 2021, it would owe JPMorgan the difference between the share price on that date and $560.

So, given that Tesla’s stock was worth more than $600 by June this year, JPMorgan stood to make a decent profit.

But it wants an extra $162m because it argues that the warrants contained standard provisions that allowed it to adjust the strike price downwards to protect itself against the economic effects of “significant corporate transactions involving Tesla”.

The bank argues that Musk’s tweet on 7 August 2018 that he might take Tesla private at $420 a share – at that point the shares were worth $341.99 – was just such a significant moment. With a buyout price set at $420, JPMorgan could not reach its strike price of $568 and therefore would not make any money. Accordingly, JPMorgan adjusted the strike price downwards, therefore increasing the chance of profit.

JPMorgan said in its complaint that Tesla had failed under its contract to hand over the agreed amount of its stock or cash. The bank said Tesla’s failure to do that amounted to a default.

“Though JPMorgan’s adjustments were appropriate and contractually required,” the bank’s complaint said, “Tesla has flagrantly ignored its clear contractual obligation to pay JPMorgan in full.”

JPMorgan said Tesla had replied that the bank’s adjustments to the strike price were “an opportunistic attempt to take advantage of changes in volatility in Tesla’s stock”. But Tesla did not challenge the underlying calculations, JPMorgan said.

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