Diamond Sports Group’s prospects of emerging from bankruptcy and continuing as a viable business have received a sizable boost through a restructuring agreement that brings in Amazon as a minority investor, as well as a legal settlement with DSG parent Sinclair Inc.
Confirming prior reports, Amazon has agreed to invest in the Bally Sports parent and the deal will establish Prime Video as DSG’s “primary partner” for fans to access the regional sports networks on a direct-to-consumer basis. Amazon’s investment runs parallel to a $450 million restructuring agreement for DSG with its debt holders. The deal also significantly expands Amazon’s presence in live sports in the U.S. beyond its existing relationships with the NFL, New York Yankees, NASCAR, and fighting promotion Premier Boxing Champions.
DSG said it will announce at a later date details such as pricing and availability of live games through Prime Video. Prior to these deals, DSG’s long-term survival had been in serious question.
“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,” said David Preschlack, DSG CEO.
DSG, meanwhile, has also reached an agreement in principle to settle its prior legal dispute against Sinclair, resolving a $1.5 billion fraud claim against its parent company. That deal will see Sinclair pay DSG $495 million—a figure projecting to be a net cost of about $250 million to $325 million after subtracting tax benefits and other management services payments paid by DSG back to Sinclair. The settlement is subject to bankruptcy court approval.
While the two agreements give DSG a far greater framework from which to operate, significant questions remain about what live sports programming it will offer long-term. Prior deals with the NBA and NHL will see DSG give back its team rights in those leagues after the 2023-24 seasons. A similar agreement is in development with MLB, and that league is objecting to Amazon having streaming rights in baseball beyond 2024 absent a larger, negotiated agreement. DSG, in effect, will be tasked with starting over and rebuilding a slate of local rights.
A status conference in DSG’s bankruptcy case is slated for Wednesday, a session that will precede a larger scheduled hearing for Friday.
