A regional sports network in bankruptcy said Wednesday that Amazon will become a minority partner as a part of a restructuring agreement that has the approval of most of its debt holders.
Diamond Sports Group is the largest owner of regional sports networks, with 18 under the Bally Sports name that have rights to 11 MLB, 15 NBA and 11 NHL teams.
The regional sports model in today’s digital media technology already was shaky when Diamond Sports’ financial distress led MLB to take over production and distribution of the San Diego Padres’ and Arizona Diamondbacks’ content last season. Diamond’s rights payments to the Padres had lapsed, and the network and the Diamondbacks were unable to work out a new arrangement.
In addition to an investment from Amazon for a reported $115 million, Diamond said it also has reached an agreement with its former parent company Sinclair Broadcasting Group that will pay Diamond $495 million to settle outstanding litigation, pay off some creditors and continue to provide services during Diamond’s reorganization.
Diamond Sports Group became a separate company from Sinclair last year under an agreement with creditors.
Diamond filed for Chapter 11 protection last March and is in bankruptcy court in the Southern District of Texas. Judge Christopher Lopez did not approve the arrangement during Wednesday’s hearing.
“There’s lots to digest, especially when you consider where things were in the fourth quarter of last year,” the judge said, according to Sportico. “It is certainly a very interesting development, to say the least.”
Diamond was exponentially more enthusiastic at this stage of the process.
“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 Sports 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’s near-term focus will be on implementing the RSA (restructuring support agreement) and emerging from bankruptcy as a going concern for the benefit of our investors, our employees, our team, league and distribution partners, and the millions of fans who will continue to enjoy our broadcasts.”
Under the RSA, Amazon will provide access to Diamond’s content — MLB, NBA and NHL games, pregame and postgame show — via Prime Video directly to consumers, with pricing and availability to be announced at a later date. Cable and satellite providers will continue to have regional sports content.
An attorney for Diamond told Judge Lopez that it will broadcast nine MLB teams for the entire 2024 season and pay the teams what it owes. Sportico reported the teams are the Atlanta Braves, Cincinnati Reds, Los Angeles Angels, St. Louis Cardinals, Detroit Tigers, Milwaukee Brewers, Florida Marlins, Kansas City Royals and Tampa Bay Rays.
Three other teams are in negotiations for broadcast rights at a lower price. Sportico reported those teams as the Cleveland Guardians, Minnesota Twins and Texas Rangers.
–Field Level Media