Amazon Investment Helps Rescue Bally Sports Networks Operator Diamond From Bankruptcy
Amazon is investing in Diamond Sports Group, which operates the Bally-branded regional sports networks, as part of a plan for the Sinclair subsidiary to emerge from Chapter 11 bankruptcy protection.
Along with Amazon’s investment in a minority stake in Diamond, the parties have also agreed that Prime Video will become the primary route for customers to buy Bally Sports streaming access to track their local teams. The added distribution muscle is a boost to Diamond, which launched Bally Sports+ as a $20-a-month offering in mid-2022. Takeup of the direct-to-consumer offering has been gradual and the costly process of marketing to and acquiring customers was severely hampered by Diamond filing for bankruptcy in March 2023. The announcement of the post-bankruptcy plan emphasized that Diamond will continue to pursue traditional carriage with pay-TV distributors, with those agreements still throwing off meaningful cash.
More from Deadline
In addition to the Amazon investment, a group of creditors agreed to provide $450 million in financing, which Diamond will use to pay down debt and fund its operations as it executes the restructuring.
Sinclair stock, which has weighed down by the Diamond situation in recent years, shot up 13% on the news.
The Bally RSNs, which carry the games of more than 40 major sports teams across the U.S., were long operated by Fox Sports and bore the Fox brand. They were sold off by Disney as a condition of regulators approving its acquisition of most of 21st Century Fox in 2018. Sinclair led a consortium of investors that acquired the networks for $10.6 billion in 2019, later rebranding them in a deal with gaming firm Bally.
Another key element of the announced plan for emerging from bankruptcy is Sinclair paying $495 million to settle pending litigation with Diamond. Not long after the original RSN deal closed, Diamond was set up as a stand-alone entity, but then wound up suing Sinclair for allegedly raiding its coffers of up to $1.5 billion. The parent company was charged with improperly accessing Diamond’s funds. The litigation put a bright spotlight on the now-hobbled RSN business model, which began in the late-1990s as cable TV was still growing.
In addition to the $495 million in cash, Sinclair will “provide ongoing management and transition services to support Diamond’s reorganization and separation from Sinclair’s operations,” the announcement said. “Proceeds from the Sinclair settlement will be used to support the reorganization plan and fund distributions to certain creditors.”
As cord-cutting upends the entire TV ecosystem, regional sports networks are making radical adjustments. While YES and others put up gaudy ratings in their home markets, especially for Major League Baseball, the dual revenue stream of yore is dwindling quickly. With rights fees continuing to escalate, cord-cutting has put stress on the finances. While consumers have long complained about the “hidden fees” applied by some pay-TV operators for carrying the RSNs, the sticker shock of paying $20 or more a month remains a potential impediment to their ability to attain scale in streaming.
Amazon has already been in the RSN business, as a stakeholder in YES. Prime Video has also been ramping up its overall sports offerings, so the addition of the Diamond networks fits with that strategy. The Bally networks have rights to MLB, NBA, NHL and other significant sports.
David Preschlack, the former NBC executive who became CEO of Diamond in December 2022, said the plan to emerge from bankruptcy “provides a detailed framework” that will enable the company to “operate and thrive beyond 2024.” He thanked Amazon and Diamond creditors, “who clearly believe in the value-creating potential of this business.”
Best of Deadline
Hollywood & Media Deaths In 2024: Photo Gallery & Obituaries
2024 Premiere Dates For New & Returning Series On Broadcast, Cable & Streaming
2024 Awards Season Calendar - Dates For Oscars, Grammys, Tonys, Guilds & More
Sign up for Deadline's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.