Amazon Prime Seals Deal with Diamond Sports: A New Era for Sports Broadcasting
Amazon Prime is making significant strides in the sports broadcasting industry. In a recent development, Amazon Prime is set to acquire a stake in Diamond Sports Group, a prominent player in the regional sports network (RSN) space. Diamond Sports operates under the Bally Sports banner and is known for its exclusive broadcasting rights for numerous Major League Baseball (MLB), National Basketball Association (NBA), and National Hockey League (NHL) teams.
A Lifeline for Diamond Sports
Diamond Sports has been in Chapter 11 bankruptcy proceedings, grappling with a debt of $8.67 billion. Amazon's intervention comes as a lifeline for Diamond Sports, enabling it to continue its operations and prevent an entire collapse of the RSN system. If the RSN system were to fall, the responsibility of production and distribution of most of the sports teams' games would fall back on NBA, NHL, and MLB.
The deal with Amazon and Diamond Sports' largest creditors will help secure the company's future, allowing it to operate beyond 2024. This development is seen as a significant step forward in the reorganisation and financial restructuring of Diamond Sports.
A Win-Win for Amazon Prime and Sports Fans
The collaboration between Amazon Prime and Diamond Sports brings numerous benefits, especially for sports fans who have moved away from traditional cable. As part of the deal, Amazon Prime Video will become the primary platform providing access to Diamond's content.
This means that fans will now be able to stream live games of their favorite teams, as well as pre- and post-game programming on Prime Video Channels. For now, this service will be available for those teams for which Diamond has direct-to-consumer (DTC) rights.
With this move, Amazon is further expanding its foothold in the sports broadcasting industry, adding to its existing portfolio that includes some New York Yankees and Brooklyn Nets games produced by the YES Network.
Diamond Sports' Extensive Portfolio
Diamond Sports boasts a robust portfolio, operating 18 networks under the Bally Sports banner. These networks host 37 professional teams, including 11 baseball, 15 NBA, and 11 NHL teams.
The deal with Amazon Prime will provide access to all of Diamond's local DTC content. This includes live MLB, NBA, and NHL games, as well as pre- and post-game programming. The specifics regarding pricing and availability are yet to be announced.
Amazon's Minority Investment
As part of the restructuring agreement, Amazon will be making a minority investment in Diamond Sports. This strategic investment signifies Amazon's commitment to expanding its sports content offerings on Prime Video.
Sinclair Settlement
Alongside the Amazon deal, Diamond Sports has also reached an agreement in principle with Sinclair Broadcast Group, its parent company. This agreement is aimed at settling the ongoing litigation between the two companies.
Sinclair had purchased the regional sports networks from The Walt Disney Company for nearly $10 billion in 2019. However, Diamond Sports filed a lawsuit against Sinclair, alleging fraudulent withdrawal of up to $1.5 billion from the RSN business.
In the settlement, Sinclair has agreed to pay Diamond $495 million in cash. Additionally, Sinclair will provide ongoing management and transition services to support Diamond's reorganisation and separation from Sinclair's operations.
Summary
The agreement between Amazon and Diamond Sports signifies a significant shift in the sports broadcasting industry. It promises to bring a more streamlined and accessible approach to viewing local sports content.
While the deal is yet to receive approval from the bankruptcy court, it marks a significant step towards a more digital and viewer-friendly sports broadcasting future. The partnership is a win-win for all parties involved – Amazon expands its sports content portfolio, Diamond Sports gets a much-needed financial boost, and sports fans gain a more flexible and convenient way to view their favourite games.
Author: Dan Anderson