Amazon has announced a significant investment in local TV network Diamond Sports Group, a prominent sports rights holder in the United States, as the streaming giant expands expands Its live sports offerings.
According to AFP, Diamond Sports Group is the country's leading network of local sports channels, holding regional broadcast rights to over half of the teams in major basketball, baseball, and ice hockey leagues.
This latest development aligns with Amazon's pursuit of expanding its content portfolio, tapping into the lucrative market of live sports entertainment.
As part of the announced deal on Wednesday, Diamond Sports channels will be integrated into Amazon's Prime Video, offering users the option of an additional subscription fee for access.
However, it must be noted that this collaboration emerges within the context of a broader restructuring agreement, helping Diamond Sports in its efforts to emerge from bankruptcy.
Diamond Sports Faces Chapter 11 Bankruptcy
Diamond Sports, the owner of 18 networks operating under the Bally Sports banner, possesses broadcasting rights for 37 professional teams, including 11 in baseball, 15 in the NBA, and 11 in the NHL.
This partnership is crucial for Diamond Sports, currently facing Chapter 11 bankruptcy proceedings since filing for protection in March last year.
The Restructuring Support Agreement (RSA) outlines a comprehensive plan for Diamond Sports to navigate through bankruptcy, backed by key creditor groups representing a significant portion of the company's debt.
This agreement includes a commitment from certain debt holders to provide $450 million in financing to support Diamond's operations during the restructuring process.
The capital structure and financial terms agreed upon among key creditors lay the foundation for Diamond's reorganization, intending to preserve the company as a going concern.
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Commercial Arrangement With Amazon
Amazon's commitment involves not only making a minority investment in Diamond but also entering into a commercial arrangement.
This arrangement entails Amazon providing access to Diamond's services via Prime Video, making it the primary platform for customers to purchase direct-to-consumer (DTC) access to stream local Diamond channels.
While Prime Video becomes the primary partner for streaming local DTC content, including live MLB, NBA, and NHL games, Diamond also emphasizes its commitment to continuing partnerships with existing MVPD distribution partners for broadcasting its sports content.
Diamond Sports also agreed in principle with its parent company, Sinclair Inc., to settle pending litigation. Sinclair will pay Diamond $495 million in cash as part of the settlement and provide ongoing management and transition services, aiding in Diamond's reorganization and separation from Sinclair's operations.
David Preschlack, CEO of Diamond Sports, expressed enthusiasm about the restructuring agreement, highlighting the support from Amazon and major creditors.
"Diamond's near-term focus will be on implementing the RSA 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," Preschlack said in a press release.
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