Amazon has reached a deal to invest $100 million in Diamond Sports Group, the parent company of Bally Sports regional sports networks, as part of Diamond’s bankruptcy restructuring. The deal gives Amazon the right to stream games from certain MLB, NBA, and NHL teams on Prime Video as soon as 2024.
Key Details of Amazon-Diamond Deal
- Amazon will receive an equity stake and board seats in exchange for the $100 million investment
- Diamond Sports owes billions in debt and filed for Chapter 11 bankruptcy in 2022
- The restructuring plan settles disputes between Diamond and creditors like Sinclair Broadcast Group
- Amazon has the option to acquire a 15% stake in the company in 2027
- Diamond owns the Bally Sports regional networks that broadcast games for 15 MLB teams
- Amazon will stream games of 5 MLB teams on Prime Video as soon as 2024:
- Kansas City Royals
- Tampa Bay Rays
- Miami Marlins
- Detroit Tigers
- Milwaukee Brewers
- More MLB, NBA, and NHL streaming rights could be added later
This investment and streaming deal provides financial stability for Diamond Sports and gives Amazon more live sports content.
Background Leading Up to Diamond Sports Bankruptcy
Diamond Sports Group, previously known as Fox Sports Regional Networks, was acquired from Disney by Sinclair Broadcast Group in 2019 for nearly $10 billion. The local sports networks had exclusive rights to broadcast games for over half the MLB, NBA, and NHL teams across the country.
However, Sinclair struggled with the financial burden of servicing the nearly $8 billion in debt tied to the deal. The combination of high debt, declining cable subscriptions, and impact of the COVID-19 pandemic on live sports led Diamond to file for bankruptcy protection in 2022.
| Year | Key Event |
|---|---|
| 2019 | Sinclair acquires Fox regional sports networks from Disney for $10B |
| 2022 | Diamond Sports Group (Sinclair) files for Chapter 11 bankruptcy with nearly $8B in debt |
| 2024 | Diamond announces restructuring deal including $100M investment from Amazon |
The restructuring deal settles disputes between Diamond and major creditors like Sinclair over the failed acquisition. This paves the way for Diamond to emerge from bankruptcy with lower debt levels.
Deal Analysis: Benefits for Diamond Sports, Amazon, Teams
This deal provides financial stability for the struggling Diamond Sports regional networks. The $100 million cash infusion and potential 15% future equity stake from Amazon will help Diamond reduce its unsustainable debt burden. Diamond is also expected to gain more distribution as live sports potentially shift to streaming on Amazon Prime Video.
For Amazon, this furthers their aggressive push into exclusive live sports streaming rights. After previously acquiring rights for NFL Thursday Night Football and some New York Yankees games, this takes another step toward Prime Video becoming a go-to destination for live sports. The initial 5 MLB team streaming rights expected to start in 2024 will allow Amazon to test capabilities before potentially pursuing larger NBA and MLB packages when they next come up for bid.
The deal is also generally positive for teams, though their future TV contracts and revenue could be impacted. There is uncertainty around whether the reported yearly rights fees owed to teams will remain intact. While teams may lose some traditional cable TV exposure if games shift exclusively to streaming, distribution could improve through Amazon’s reach. There is also the potential for teams to share in revenue if Amazon’s user base watches their games.
What Happens Next: Streaming on Prime Video
While additional details need to be finalized, Diamond Sports has announced a “target to premiere select marquee games on Prime Video as soon as 2024”. It is not yet clear how many games each year or what type of games may be available on Prime Video.
Diamond says it will “pursue partnerships with daily fantasy sports operators and sports betting companies” to create complementary OTT experiences around the live sports streaming. This hints at potential new secondary programming, betting integrations, alternate feeds, or other innovations Amazon could explore to attract and engage viewers.
If successful early on, expect Amazon to be “very aggressive” in pursuing more MLB, NBA, NHL rights in upcoming contract negotiation windows according to sources. This could eventually lead to Prime Video becoming the exclusive streaming home for an out-of-market live sports package across the major leagues. For now, though, baby steps will be taken with a limited number of games as soon as 2024.
So while immediate impacts may be limited for fans of teams like the Royals and Rays, the Amazon-Diamond deal symbolizes the first phase of a landmark shift towards streaming for live sports. Stay tuned as this story further develops in 2024 and beyond!
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