Diamond drops fraud lawsuit against parent company Sinclair, with Sinclair to pay $495 million to RSN division
Diamond Sports Group has put together a plan to emerge from bankruptcy and remain a going concern, with the help of a major new streaming deal with Amazon.
Amazon has committed to take a minority stake in Diamond Sports Group, one of the nation's largest regional sports network (RSN) operators, as part of Diamond Inc.'s bankruptcy reorganization plan, the RSN company announced Wednesday. did.
Under the terms of Amazon's investment, the tech giant will enter into a commercial agreement to provide access to Diamond's services via Prime Video. Prime Video will be Diamond's primary partner through which customers will be able to purchase consumer access to stream local Diamond channels. Through Prime Video channels, customers will have access to all local DTC content for teams for which Diamond holds his DTC rights, including live MLB, NBA and NHL games, pre- and post-game programming. Additional details regarding pricing and availability will be announced at a later date.
Additionally, Diamond said it “looks forward to continuing our collaboration with our existing partners.” [pay TV] Enable distribution partners to broadcast MLB, NBA, and NHL content. ”
Diamond's regional sports networks produce nearly 4,500 live local professional broadcasts each year, in addition to a variety of locally produced sporting events and programs. The company owns and operates 18 regional sports networks called Bally Sports, which are home to half of all U.S. MLB, NHL and NBA teams, the company said. They 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 Southern California, Bally Sports South, Bally Sports Southeast, Bally Sports Southwest, Bally Sports Sun, Bally Sports West, Bally Sports Wisconsin. Diamond Sports Group also has a joint venture in Marquee, home of the Chicago Cubs, and a minority stake in his YES Network, home of the New York Yankees and Brooklyn Nets.
Diamond also announced Wednesday that it has reached an agreement in principle with parent company Sinclair to resolve pending litigation between the two companies. In July 2023, Diamond sued Sinclair, alleging that Sinclair fraudulently withdrew up to $1.5 billion from its RSN business. Sinclair founded Diamond in 2019 after acquiring 21 Fox RSNs in a $10.6 billion deal with Disney as part of obtaining regulatory approval for Disney's acquisition of 21st Century Fox's film and television assets. Was.
Under the settlement, 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 Reorganization Agreement, proceeds from the Sinclair Settlement will be used to support the Reorganization Plan and distribute funds to certain creditors.
“This comprehensive package provides a detailed framework and significant new financing for Diamond's restructuring plan that will enable Diamond to operate and grow beyond 2024,” Diamond CEO David Preschlack said in a statement. We are excited to have reached a realignment agreement.” “We are grateful for the support from Amazon and a group of our largest creditors who clearly believe in the value creation potential of this business.”
Diamond said its bankruptcy reorganization plan has support from its largest group of creditors, including more than 85% of the company's first lien holders. The restructuring agreement includes a commitment from certain of the company's debt holders to provide $450 million in subordinated senior debt financing. According to the company, some of Diamond's largest debt holders have made significant investments in the company and have pledged to exchange their debt for shares issued by Diamond after the reorganization.
Law firm Latham & Watkins LLP advised Amazon on the transaction.