Amazon to invest in Diamond Sports as part of bankruptcy deal

Amazon will partner with Diamond Sports as part of a restructuring agreement as the largest owner of regional sports networks looks to emerge from bankruptcy.

Diamond owns 18 networks under the Bally Sports banner. Those networks have the rights to 37 professional teams: 11 MLB, 15 NBA and 11 NHL.

Diamond Sports has been in Chapter 11 bankruptcy proceedings in the Southern District of Texas since it filed for protection last March. The company said in a late 2021 financial filing that it had debt of $8.67 billion.

The terms of the agreement were announced by Diamond Sports on Wednesday morning. Amazon had no comment. It remains subject to approval by the bankruptcy court.

The agreement with Diamond Sports' largest creditors allows it to emerge from bankruptcy, continue operations and prevents a total collapse of the regional sports network system where the NBA, NHL and MLB would have to step in to take over production and distribution of most of their teams.

Last season, MLB had to take over production and distribution of the San Diego Padres and Arizona Diamondbacks after Diamond let rights payments to the Padres lapse and was unable to agree to an amended deal with the Diamondbacks.

Under the terms of the restructuring agreement, Amazon will make a minority investment in Diamond and enter into a commercial arrangement to provide access to Diamond's content via Prime Video.

Customers will be able to access their local team's content on Prime Video channels where Diamond has rights. Pricing and availability will be announced at a later date. Regional sports content will also remain available on cable and satellite providers.

An attorney for Diamond Sports Group called the agreement a "watershed" moment for the company's bankruptcy process in a court hearing later Wednesday. But attorneys for MLB and the NBA noted that the leagues had just been made aware of the deal and still had a lot to sift through, a point later echoed by an attorney for the unsecured creditor committee.

An attorney for Diamond assured the bankruptcy judge that it will broadcast nine teams under its portfolio for the entirety of the 2024 MLB season and will pay what it owes those teams under its current contract, while adding that it is in talks with three other teams on broadcasting their games at a reduced price. The attorney did not name the latter three teams, but the reigning World Series champion Texas Rangers are among them.

A hearing between MLB and Diamond Sports Group that had been scheduled for Friday -- and was rescheduled from last Wednesday -- has been pushed back indefinitely. Diamond previously faced a March deadline to firm up a restructuring plan but says it will provide details for its new arrangement well ahead of that date.

"There's a lot to take in, a lot to digest," Judge Chris Lopez said as part of his closing remarks.

Amazon Prime already carries some New York Yankees and Brooklyn Nets games produced by the YES Network.

Diamond also has an agreement in principle with Sinclair to settle the pending litigation between the companies and the other named defendants. The settlement is supported by Diamond's creditors that are parties to the RSA.

Sinclair Broadcast Group bought the regional sports networks from The Walt Disney Co. for nearly $10 billion in 2019. Disney was required by the Department of Justice to sell the networks for its acquisition of 21st Century Fox's film and television assets to be approved.

Even before Sinclair bought the regional networks, the business was in a downturn due to cord-cutting and declines in advertising revenue after entering into exorbitant long-term deals with some teams.

Under an agreement with creditors last year, Diamond Sports Group became a separate company from Sinclair.

As part of the settlement, Sinclair will pay Diamond $495 million and provide ongoing services to support Diamond's reorganization. The proceeds from the settlement will also pay off some creditors.

"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. Diamond's near-term focus will be on implementing the RSA and emerging from bankruptcy as a going concern for the benefit of our investors, our employees, our team, league and distribution partners, and the millions of fans who will continue to enjoy our broadcasts."

Diamond recently reached agreements with the NHL and NBA to keep local rights through the end of this season. It remains in discussions with MLB on reworked agreements for the upcoming season, with the next court hearing scheduled for Friday.

ESPN's Alden Gonzalez and The Associated Press contributed to this report.