Bankrupt broadcaster Diamond Sports, which owns the rights to 37 sports teams in the MLB, NBA and NHL, has entered into a $450 million plan with creditors to continue operating beyond 2024, pending court approval. compiled. But the exact potential impact on Diamond's partner sports leagues (11 MLB teams, 15 NBA teams, 11 NHL teams) was not immediately clear, and many questions loom.
Amazon has agreed to invest $115 million in Diamond, said a person briefed on the deal who was not authorized to speak publicly. Diamond expects direct-to-consumer revenue to rise from $49 million in 2023 to $658 million in 2026, benefiting from Amazon's Prime service, according to projections shared by the company Wednesday morning. It is predicted that the number will increase.
Once the deal takes effect, Amazon will own 15% of the new company, according to Diamond Sports. Amazon will be able to invest an additional $50 million within nine months of signing the deal.
This year could have been Diamond's last year of operation before liquidation. However, the Diamonds intend to terminate their television contracts with some teams while maintaining their current digital direct-to-consumer (DTC) rights agreements.
Example: Diamond has the rights to televise the games of 11 MLB teams, but it has the digital rights to only 5 of them.
“This business plan contemplates that we will retain and continue to use our current set of DTC rights,” Diamond said in a summary of the plan published Wednesday. “The business plan assumes that the existing rights portfolio will be reduced to reduce the expected losses associated with certain team rights agreements.”
Diamond said in a news release Wednesday: “Through Prime, customers can watch all local content, including live MLB, NBA, and NHL games and pre- and postgame programming, for teams for which Diamond holds DTC rights. You will have access to DTC content on the “Video Channel.'' ”
A court hearing that could shed more light was scheduled for noon ET Wednesday. Amazon declined to comment. MLB and the NBA have not yet commented.
Amid the expected disbandment, the Diamonds previously reached conditional agreements with the NBA and NHL for operations in 2024, with plans to end contracts with teams in each league after the 2023-24 season and an agreement with the NHL. He was deeply involved in negotiations. MLB has a similar arrangement. However, the new arrangement appears to supersede the contract the NBA and NHL agreed to, and could significantly change the negotiations the Diamonds have had with MLB. A person briefed on the negotiations said the Diamonds are prepared to honor the financial terms agreed to with the NBA and NHL in 2023-24 and are willing to negotiate a long-term contract. If the new deal is approved by a judge, NBA and NHL teams would continue to sign with Diamond Sports beyond this season if their original contracts had lasted that long.
A summary shared publicly by the Diamonds on Wednesday said the new arrangement “will only take effect if the terms of the NBA Term Sheet and NHL Term Sheet are not in effect” and that the Diamonds “must not enter into any other agreement.” ” he said. Similar arrangements or transactions with sports leagues. ”
MLB and the Diamonds have been discussing a 2024 deal that would revise the rights fee for at least some teams, certainly the Cleveland Guardians and the Texas Rangers, who the Diamonds have threatened to release in 2024. The deal being negotiated would likely include refunding rights fees for all MLB teams. Those rights will be granted after the 2024 season.
Diamond's digital rights to the 24-year-old baseball team will also likely be expanded, as is part of any deal. Negotiations also included the 12th-ranked MLB team, the Minnesota Twins. Diamond led the Twins in 2023, but both contracts expired after the season.
However, Diamond is poised to continue with the deal beyond 2024, and the content of negotiations with MLB may change. said an MLB team executive. The Athletic On Wednesday morning, the team said it was still figuring out what the Diamond-Amazon partnership would mean for the team's television rights.
Meanwhile, the NBA and NHL had already reached the type of deal MLB was working on.
The deal between Diamond Sports and the NBA will see all rights returned to the NBA and the team after the 2023-24 season, rather than the original long-term deal.
NBA contracts allow these teams to broadcast many games on radio channels in their local markets. The New Orleans Pelicans and Atlanta Hawks have already done so, each scheduling 10 televised games in their respective markets.
(Photo: David Berding/Getty Images)