Amazon to boost US sports presence with Diamond investment

CN2BBW Major League Baseball (Source: Alamy.com)

Amazon Prime Video stands to boost its position in the US sports as one major outcome of a deal designed to secure the future of bankrupt regional sports networks (RSNs) owned by Diamond Sports Group.

As part of the group’s restructuring plan, announced yesterday, Amazon has committed to pay US$115 million to take a minority stake in Diamond and will distribute the group’s content on Prime Video.

Prime Video will become Diamond’s primary partner through which customers will be able to purchase direct-to-consumer access to stream local Diamond channels. Customers will be able to access all local direct-to-consumer content, including live MLB, NBA and NHL games, and pre- and post-game programming, for the teams for which Diamond retains streaming rights, through Prime Video Channels. Additional details regarding pricing and availability will be announced at a later date.

Diamond yesterday said it had struck a restructuring deal with its largest creditor groups, including over 85% of the company’s first lien debt holders, over 50% of second lien debt holders, and over 66% of unsecured bond holders, that provides a framework for a reorganization that would enable it to emerge from bankruptcy as a going concern and continue its operations.

The group, which operates the Bally Sports regional sports channels in the US, has struck an agreement in principle with its parent company, Sinclair Broadcast, to end pending litigation between the pair. As part of that deal, Sinclair will pay US$495 million to Diamond.

Diamond filed for bankruptcy 10 months ago with over US$8 billion in debt.

Sinclair had previously acquired the RSNs, then branded as Fox SportsNet, from Disney in 2019 as a condition of the media giant’s acquisition of 21^st Century Fox’s assets.

However, the RSNs’ performance deteriorated as cord-cutting ate away at their cable subscriber base. Diamond subsequently sued Sinclair for US$1.95 billion alleging that its parent had acted in bad faith with a plan to drain funds from the sports group. The agreement with Sinclair brings litigation between the pair to an end.

The ultimate fate of Diamond Sports Group remains unclear, with some US reports suggesting that its MLB rights – one of its key assets – may not remain with the network beyond this year, with the MLB perhaps preferring to strike a separate deal with Amazon.

However, under any likely outcome, Amazon’s strength in US sports is likely to be enhanced.