Diamond Sports Group has put together a plan to emerge from bankruptcy and remain a going concern, helped by a big new streaming deal with Amazon.
Amazon has committed to making a minority investment in Diamond Sports Group, one of the largest operators of regional sports networks (RSNs) in the country, as part of Diamond’s bankruptcy reorganization plan, the RSN company announced Wednesday.
Under the terms of Amazon’s investment, the tech giant will enter into a commercial arrangement to provide access to Diamond’s services via Prime Video. Prime Video will become Diamond’s primary partner through which customers will be able to purchase direct-to-consumer access to stream local Diamond channels. Customers will be able to access all local DTC content, including live MLB, NBA and NHL games, and pre- and post-game programming, for the teams for which Diamond retains DTC rights, through Prime Video Channels.
Diamond said additional details regarding pricing and availability of its RSNs via Prime Video will be announced at a later date. In addition, the company said it “looks forward to continuing to partner with its existing [pay TV] distribution partners to broadcast its MLB, NBA and NHL content.”
Diamond’s regional sports networks produce nearly 4,500 live local professional telecasts each year in addition to a variety of locally produced sports events and programs. It owns and operates the 18 Bally Sports regional sports networks, which are the TV home to half of all MLB, NHL and NBA teams in the U.S., according to the company. Those are: Bally Sports Detroit, Bally Sports Florida, Bally Sports Great Lakes, Bally Sports Indiana, Bally Sports Kansas City, Bally Sports Midwest, Bally Sports New Orleans, Bally Sports North, Bally Sports Ohio, Bally Sports Oklahoma, Bally Sports San Diego, Bally Sports SoCal, Bally Sports South, Bally Sports Southeast, Bally Sports Southwest, Bally Sports Sun, Bally Sports West, and Bally Sports Wisconsin. Diamond Sports Group also has a joint venture in Marquee, home of the Chicago Cubs, and a minority interest in the YES Network, the destination for the New York Yankees and Brooklyn Nets.
Diamond also announced Wednesday that it has an agreement in principle with parent Sinclair to settle the pending litigation between the companies. In July 2023, Diamond sued Sinclair alleging the company had fraudulently withdrawn as much as $1.5 billion from the RSN business. Sinclair had formed Diamond in 2019 after acquiring 21 Fox RSNs in a $10.6 billion deal with Disney, as part of getting regulatory approval for Disney’s acquisition of the 21st Century Fox film and TV assets.
Under the settlement, among other things, Sinclair will pay Diamond $495 million in cash and provide “ongoing management and transition services to support Diamond’s reorganization and separation from Sinclair’s operations.” Under the restructuring agreement, the proceeds from the Sinclair settlement will be used to support the reorganization plan and fund distributions to certain creditors.
“We are thrilled to have reached a comprehensive restructuring agreement that provides a detailed framework for a reorganization plan and substantial new financing that will enable Diamond to operate and thrive beyond 2024,” Diamond CEO David Preschlack said in a statement. “We are grateful for the support from Amazon and a group of our largest creditors who clearly believe in the value-creating potential of this business.”
Diamond said the bankruptcy reorg plan had support from its largest creditor groups, including more than 85% of the company’s first lien debt holders. The restructuring agreement includes a commitment from certain of the company’s debt holders to provide $450 million of junior secured superpriority debtor-in-possession financing. Certain large holders of Diamond’s debt have committed to make a substantial investment in the company and exchange their debt into equity to be issued by the reorganized Diamond, according to the company.
Law firm Latham & Watkins LLP advised Amazon in the transaction.
