In a restructuring move, Amazon is set to collaborate with Diamond Sports, which is seeking to recover from bankruptcy as the predominant owner of regional sports networks.
Diamond, managing 18 Bally Sports networks, holds broadcasting rights for 37 professional teams, encompassing 11 in baseball, 15 in the NBA, and 11 in the NHL.
Since declaring bankruptcy in March last year, Diamond Sports has been navigating Chapter 11 proceedings in Texas’ Southern District. A financial statement from late 2021 revealed the company’s $8.67 billion debt. Diamond Sports publicized the terms of the agreement on Wednesday, while Amazon chose not to comment. The deal’s finalization hinges on the approval of the bankruptcy court.
This arrangement with major creditors of Diamond Sports paves the way for its exit from bankruptcy and sustains operations, averting a collapse of the regional sports network system. In such a scenario, entities like the NBA, NHL, and MLB would have had to manage the production and distribution of many of their teams’ broadcasts.
In the previous season, MLB intervened to handle broadcasts for the San Diego Padres and Arizona Diamondbacks after Diamond defaulted on payments to the Padres and couldn’t renegotiate with the Diamondbacks.
Amazon’s role in the restructuring includes a minority investment in Diamond and a commercial deal to feature Diamond’s content on Prime Video. This will allow Prime Video users to watch their local team’s games in areas where Diamond holds rights, with specific details on pricing and availability to be announced later. Additionally, regional sports programming will continue to be accessible on traditional cable and satellite platforms.
Amazon Prime already streams select games of the New York Yankees and Brooklyn Nets, produced by the YES Network. Furthermore, Diamond is working towards finalizing an agreement with Sinclair Broadcast Group to resolve ongoing legal disputes.
Sinclair acquired these regional sports networks from The Walt Disney Co. for about $10 billion in 2019, a sale mandated by the Department of Justice for Disney’s purchase of 21st Century Fox’s film and TV assets. Before Sinclair’s acquisition, the business was struggling with reduced advertising revenues and the impact of cord-cutting, exacerbated by costly long-term contracts with certain teams.Last year, an agreement with creditors led to the segregation of Diamond Sports Group from Sinclair.As part of this settlement, Sinclair will pay Diamond $495 million and provide support services during reorganization, with the settlement funds also addressing creditor debts.
Diamond Sports CEO David Preschlack expressed enthusiasm about the comprehensive restructuring deal, noting substantial new financing and a plan that positions Diamond for future success. Preschlack thanked Amazon and creditors for their faith in the company’s potential. Diamond’s immediate goal is to implement the agreement and successfully emerge from bankruptcy, benefiting investors, employees, partners, and fans.
Diamond has recently extended agreements with the NHL and NBA for local broadcasting rights until this season’s end and is in talks with Major League Baseball for the upcoming season, with a court hearing scheduled for Friday.
