Amazon plans to invest in struggling Diamond Sports
Retail giant Amazon is furthering its push into sports programming with a proposed investment in a struggling owner of regional sports networks.
Diamond Sports, which owns the rights to dozens of MLB, NBA and NHL teams and has been mired in bankruptcy proceedings, announced the deal Wednesday. Amazon’s investment of $115 million is part of a restructuring plan that will make a number of games available to stream on Prime Video.
The deal must be approved by a bankruptcy court. At a hearing Wednesday, lawyers for Major League Baseball and the NBA said they had only just heard about the plan and would need to review it.
Diamond Sports filed for bankruptcy early last year, throwing the regional sports network ecosystem into a state of uncertainty — and with it, the financial fortunes of a number of teams. The company owns the rights to broadcast games for 11 MLB teams, 15 NBA teams and 11 NHL teams on its Bally Sports networks. Last season, Diamond Sports rejected the TV contracts of the San Diego Padres and Arizona Diamondbacks, causing MLB to step in and assume control of broadcasts.
Teams such as the Minnesota Twins and World Series champion Texas Rangers are trying to make offseason roster decisions without clarity on their future broadcast revenue. Local TV rights have long been a leading revenue source for teams, especially in MLB, and contributed to increased player salaries and climbing team valuations.
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Under the proposed arrangement, Prime Video would become Diamond Sports’ primary partner through which viewers would be able to purchase direct-to-consumer access to stream local games. It is unclear if those games would be available through a Prime Video subscription or if Amazon would charge an additional fee.
Diamond owns the digital rights for five MLB teams — the Detroit Tigers, Kansas City Royals, Miami Marlins, Milwaukee Brewers and Tampa Bay Rays — and all of its NBA and NHL teams. Their games would be available to stream through Amazon Prime if the deal is approved.
Amazon has been growing its sports rights portfolio in recent years. The company pays around $1 billion to broadcast the NFL’s “Thursday Night Football” schedule and airs a handful of New York Yankees games exclusively, too. As part of Wednesday’s proposed deal, the company would become a minority investor in Diamond Sports.
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Jeff Bezos, Amazon’s founder, owns The Washington Post.
MLB has been more hostile to Diamond’s restructuring plans than the NBA and NHL because Commissioner Rob Manfred has expressed interest in collecting more teams’ digital rights and selling them directly to distributors. The leagues can object to the proposed settlement, but the court will make the final ruling on whether to accept it.
Before Wednesday’s announcement, there had been concern from those involved in the bankruptcy proceedings that Diamond did not have a viable future because of the combination of its crippling debt load and the continued erosion of the cable business through cord-cutting. With the Amazon investment, as well as a settlement reached with former parent company Sinclair Broadcasting Group that was also part of the proposed restructuring, Diamond now sees at least a potential path forward.
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“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.”
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