Amazon is set to collaborate with Diamond Sports as part of a restructuring agreement, marking a pivotal moment for the largest owner of regional sports networks aiming to emerge from bankruptcy. Diamond Sports, which owns 18 networks under the Bally Sports banner, has been navigating Chapter 11 bankruptcy proceedings in the Southern District of Texas since March of the previous year, reporting a substantial debt of $8.67 billion.
The terms of the agreement, announced by Diamond Sports on Wednesday morning, are still pending approval from the bankruptcy court. However, this collaboration with Amazon is crucial for Diamond Sports, as it allows the company to continue operations and prevents a total collapse of the regional sports network system.
Diamond Sports' extensive network includes rights to 37 professional teams, spanning across 11 MLB, 15 NBA, and 11 NHL teams. The restructuring agreement outlines that Amazon will make a minority investment in Diamond and enter into a commercial arrangement to provide access to Diamond's content via Prime Video. Customers will soon have the opportunity to access their local team's content on Prime Video channels where Diamond holds rights.
The move is particularly significant for the stability of regional sports networks, preventing the NBA, NHL, and MLB from having to intervene and take over production and distribution of most of their teams. The previous season saw MLB taking over production and distribution of the San Diego Padres and Arizona Diamondbacks after Diamond faced financial challenges.
As part of the restructuring, Amazon's investment aims to contribute to Diamond's emergence from bankruptcy, ensuring the broadcast of nine teams under its portfolio for the entirety of the 2024 MLB season. While pricing and availability details on Prime Video channels are yet to be disclosed, regional sports content will also remain accessible through traditional cable and satellite providers.
This collaboration comes as a lifeline for Diamond Sports, which has been grappling with financial troubles and looming deadlines for restructuring plans. The agreement with Amazon, coupled with a separate settlement with Sinclair to resolve pending litigation, signals a turning point for Diamond Sports as it seeks to stabilise its operations.
Sinclair Broadcast Group's acquisition of regional sports networks from The Walt Disney Co. in 2019 played a role in Diamond's financial challenges, compounded by cord-cutting trends and declines in advertising revenue. The current collaboration and settlement are part of broader efforts to separate Diamond Sports Group from Sinclair, with Sinclair agreeing to pay $495 million and provide ongoing services to support Diamond's reorganisation.
The impact of this partnership extends beyond the business realm, as it not only secures the future of regional sports networks but also opens up new avenues for streaming sports content through the widely popular Amazon Prime Video platform.