Amazon is partnering with Diamond Sports as part of a restructuring deal as the regional sports network's largest owner seeks to emerge from bankruptcy.
Diamond owns 18 networks under the Bally Sports banner. These networks have rights to 37 professional teams: 11 baseball teams, 15 NBA teams, and 11 NHL teams.
Diamond Sports has been in Chapter 11 bankruptcy protection in the Southern District of Texas since filing for protection last March. The company said in its second-half 2021 financial report that it had $8.67 billion in debt.
Terms of the deal were announced by Diamond Sports on Wednesday morning. Amazon had no comment. Bankruptcy court approval will still be required.
The agreement with Diamond Sports' largest creditor will allow Diamond Sports to emerge from bankruptcy, continue operations and complete the regional sports network system in which the NBA, NHL and MLB will take over most sports production and distribution. collapse can be prevented. team.
Last season, MLB had to take over production and distribution for the San Diego Padres and Arizona Diamondbacks after Diamond let rights payments to the Padres lapse and could not agree to a revised contract with the Diamondbacks.
Under the terms of the restructuring agreement, Amazon will take a minority stake in Diamond and enter into a commercial agreement to provide access to Diamond's content via Prime Video.
Customers will have access to local team content on Prime Video channels to which Diamond has rights. Pricing and availability will be announced at a later date. Regional sports content will also continue to be available on cable and satellite providers.
Amazon Prime is already streaming some of the New York Yankees and Brooklyn Nets games produced by YES Network.
Diamond also has entered into a basic agreement with Sinclair Broadcast Group to resolve pending litigation.
Sinclair acquired the regional sports network from Walt Disney Co. in 2019 for nearly $10 billion. Disney had been required by the Department of Justice to sell the network in order to gain approval to acquire 21st Century Fox's film and television assets.
Even before Sinclair acquired the regional network, business was slow due to cord-cutting and declining advertising revenue due to prohibitive long-term contracts with some teams.
Under an agreement with creditors last year, Diamond Sports Group was separated from Sinclair.
As part of the settlement, Sinclair will pay Diamond $495 million and provide ongoing services to support Diamond's reorganization. The settlement money will be repaid to some creditors.
“This is a comprehensive project that provides a detailed framework and significant new financing for Diamond's restructuring plan that will enable Diamond to operate and grow beyond 2024,” Diamond Sports CEO David Preschlack said in a statement. “We are thrilled and grateful that we have reached this restructuring agreement.” This is in response to support from Amazon and our largest group of creditors who clearly believe in the value creation potential of this business. Diamond's near-term focus is to implement RSA and emerge from bankruptcy as a going concern for the benefit of our investors, employees, teams, league and distribution partners, and the millions of fans who will continue to enjoy our broadcasts. There is something to do. ”
The Diamonds recently reached an agreement with the NHL and NBA to maintain local rights through the end of this season. Discussions are continuing with Major League Baseball to revise the agreement for next season, with the next court hearing scheduled for Friday.
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