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As a component of its bankruptcy restructuring, Amazon is set to invest in Diamond Sports



As a component of its bankruptcy restructuring, Amazon is set to invest in Diamond Sports

The agreement enables Diamond to exit bankruptcy, ensuring the continuity of its operations and averting a complete breakdown of the regional sports network system.

Amazon is set to collaborate with Diamond Sports as part of a restructuring agreement, marking a significant move by the largest owner of regional sports networks seeking to emerge from bankruptcy.

Diamond Sports, which owns 18 networks under the Bally Sports brand, holds broadcasting rights for 37 professional teams, encompassing 11 baseball teams (including the Rays), 11 NHL teams (including the Lightning), and 15 NBA teams (including the Orlando Magic).

Facing Chapter 11 bankruptcy proceedings in the Southern District of Texas since filing for protection in March of the previous year, Diamond Sports revealed a debt of $8.67 billion in a late 2021 financial filing.

Announced by Diamond Sports on Wednesday morning, the terms of the agreement, subject to bankruptcy court approval, allow the company to exit bankruptcy, ensuring the continuation of its operations. The agreement also prevents a potential collapse of the regional sports network system, where the NBA, NHL, and MLB might need to step in to take over production and distribution for most of their teams.

As part of the restructuring agreement, Amazon will make a minority investment in Diamond and establish a commercial arrangement to offer access to Diamond’s content via Prime Video.

This collaboration will enable customers to access their local team’s content on Prime Video channels where Diamond holds rights, with pricing and availability details to be disclosed later. Regional sports content will remain available on cable and satellite providers.

In addition to its collaboration with Amazon, Diamond has reached an agreement in principle with Sinclair Broadcast Group to settle pending litigation between the two companies.

Sinclair acquired the regional sports networks from The Walt Disney Co. for nearly $10 billion in 2019, as mandated by the Department of Justice for Disney’s acquisition of 21st Century Fox’s film and television assets.

The regional networks faced challenges, including cord-cutting and declines in advertising revenue, even before Sinclair’s acquisition.

Under a previous agreement with creditors, Diamond Sports Group became a separate entity from Sinclair, and as part of the settlement with Sinclair, Diamond will receive $495 million and ongoing services to support its reorganization, with proceeds allocated to pay off some creditors.

“We are thrilled to have reached a comprehensive restructuring agreement that provides a detailed framework for a reorganization plan and substantial new financing that will enable Diamond to operate and thrive beyond 2024,” Diamond Sports CEO David Preschlack said in a statement.

“We are grateful for the support from Amazon and a group of our largest creditors who clearly believe in the value-creating potential of this business. Diamond’s near-term focus will be on implementing the RSA and emerging from bankruptcy as a going concern for the benefit of our investors, our employees, our team, league and distribution partners, and the millions of fans who will continue to enjoy our broadcasts.”

Diamond Sports has recently secured agreements with the NHL and NBA, ensuring the retention of local broadcasting rights through the conclusion of the current season. Ongoing discussions with Major League Baseball are in progress to renegotiate agreements for the upcoming season, with the next court hearing scheduled for Friday.

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