Amazon invests in Diamond Sports Group, bolstering Bally RSNs

Diamond Sports Group, a subsidiary of Sinclair Broadcasting and the largest U.S. operator of regional sports networks (RSNs), has announced a restructuring plan involving a minority investment from Amazon and a settlement with Sinclair.

Amazon is set to invest $115 million into Diamond Sports Group, which operates the various Bally Sports RSNs, with an option for an additional $50 million.

This investment positions Amazon Prime Video as the primary platform for Diamond’s Bally Sports Plus direct-to-consumer (DTC) offering. David Preschlack, CEO of Diamond Sports Group, expressed gratitude for the support from Amazon and major creditors, highlighting the potential of the business to create value.

The collaboration with Amazon will allow Prime Video to become the primary partner for customers seeking DTC access to stream local Diamond channels. This includes live MLB, NBA, and NHL games and pre and postgame programming for teams where Diamond retains DTC rights. While specific details regarding pricing and availability are yet to be disclosed, the move marks a shift in how consumers access local sports content.

Diamond Sports Group has also announced a restructuring service agreement with Sinclair.

This agreement includes Diamond’s withdrawal of its $1.5 billion litigation against Sinclair in exchange for a $495 million cash payment from Sinclair to Diamond Sports Group.

Sinclair will also provide transition services to support Diamond’s reorganization and separation from Sinclair’s operations. This deal is currently pending court approval.

This restructuring comes at a critical time for Diamond Sports Group, which filed for Chapter 11 bankruptcy protection last March. The sports broadcasting landscape has been notably affected by cord-cutting trends and the consequent decline in advertising revenue. The restructuring plan is a strategic move to stabilize the company and ensure its operations beyond 2024.

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Major League Baseball took over the production and distribution of the San Diego Padres and Arizona Diamondbacks following Diamond’s lapse in rights payments to the Padres and failure to reach an amended deal with the Diamondbacks. This situation indicated wider issues within Diamond Sports, as evidenced by the termination of agreements with Bally Sports Arizona by the Phoenix Suns, Arizona Diamondbacks and Arizona Coyotes due to the company’s financial struggles.

Phoenix Suns’ graphics blur the line between reality with sweeping views of local landscape

Diamond Sports Group operates 18 RSNs under the Bally Sports brand, covering 37 professional teams including 11 MLB, 15 NBA and 11 NHL organizations.

The agreement with Sinclair is designed to resolve pending litigation and support Diamond’s reorganization. The RSA includes promises from certain debt holders to provide $450 million in financing to support Diamond’s operations, finalize a reorganization plan, and repay $350 million of existing debt.

Sinclair purchased the RSNs from The Walt Disney Co. in 2019, following Disney’s acquisition of 21st Century Fox’s film and television assets.