The beleaguered Diamond Sports Group (DSG) has claimed to have entered into a deal with a group of creditors, through which it will come out of 10-month-long bankruptcy proceedings.
DSG, a unit of Sinclair Broadcast Group which owns a range of regional sports networks (RSNs) in the US, has said it will also receive funding from Amazon, as part of a wider content streaming deal between the two organizations.
Amazon Prime Video is set to become the main partner through which customers can buy access to local DSG channels, while Amazon will also make a minority investment (15%) in the RSN provider.
This will allow Prime Video customers to access live US top-tier sports including games from Major League Baseball, (MLB) the National Basketball Association (NBA), and the National Hockey League (NHL). The streaming service already carries some games played by the New York Yankees (MLB) and Brooklyn Nets (NBA) produced by the YES Network.
Pricing and availability are expected to be announced at a later date, while live content will also remain viewable via cable and satellite providers as well.
DSG was forced to file for bankruptcy in March 2023. This deal enables it to emerge from that position and prevents a complete collapse of the RSNs which cover a vast range of popular US sports franchises.
Under the Bally Sports brand, DSG owns 18 RSNs, which combined hold the rights to 37 professional US teams (11 MLB, 15 NBA, and 11 NHL).
The Bally brand will continue through 2024 but will then be replaced with a new name in 2025, according to reports.
DSG has said the deal with the various creditors will provide it with around $450 million, some of which will help to pay off various debts, with the rest to finance a reorganization plan.
Amazon is reportedly putting in $115 million of that total, and could potentially invest another $50 million, the Athletic has said.
Amazon was first reported as being interested in investing in DSG last month.
In a separate deal, meanwhile, DSG claims to have reached an agreement with Sinclair over settling an upcoming legal case in which DSG was set to state that Sinclair had unlawfully withdrawn as much as $1.5 billion from the claimant.
Through the settlement, Sinclair will pay DSG around $495 million, as well as provide a range of management and transition services to its subsidiary to support the aforementioned reorganization.
DSG has been in bankruptcy proceedings in Texas since it filed for protection last March, and the deal with Amazon remains subject to approval by the bankruptcy court.
The RSN provider has now, off the back of the deal announcement, said it expects to see its direct-to-consumer revenue grow from $49 million in 2023 to $658 million in 2026.
Sinclair originally bought the separate RSNs from Disney in 2019 (Disney was required to sell these for its deal with 21st Century Fox to go through), and an agreement last year then saw DSG (in charge of the RSNs) become a separate company.
In a statement, DSG’s chief executive David Preschlack has said: “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.
“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.”
DSG has recently struck agreements with both the NHL and NBA to keep local coverage rights through the end of the ongoing 2023-24 season and remains in discussions with MLB around agreements for that league’s 2024 campaign.
Before these tie-ups were announced, DSG had previously faced a deadline in March to come up with a workable restructuring plan.
Last season, owing to the bankruptcy proceedings, MLB had to step in and take over the distribution and production of games played by the San Diego Padres and the Arizona Diamondbacks, after DSG failed to reach new agreements with those franchises.
An attorney for DSG has claimed that it will broadcast all games featuring nine MLB sides during the entirety of the upcoming 2024 campaign.
However, discussions are still ongoing with three teams – reported to be the Cleveland Guardians, Texas Rangers, and Minnesota Twins.
Judge Christopher Lopez, speaking at a virtual court hearing to provide the various relevant parties with details on the agreement, said: “The fact that the company is moving in a direction that it sees this path forward I think certainly is a positive update. But, it’s got to satisfy the code and the evidentiary standards.”