Yahoo Finance Amazon in Talks With Diamond Sports for Streaming Deal, Investment
(Bloomberg) -- Amazon.com Inc. is in talks with Diamond Sports Group and some of its creditors to invest in the bankrupt regional-sports broadcaster and partner on streaming, according to people familiar with the matter.
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Under the potential deal, Amazon would acquire multiyear streaming rights to MLB, NBA and NHL games carried on cable channels operated by Diamond Sports, said the people, who asked not to be identified discussing a private matter. Diamond would continue to operate the channels, they said. It’s unclear how much Amazon would invest, but the proposal involves acquiring an equity stake in Diamond, some of the people said.
Representatives for Diamond and Amazon declined to comment. The talks aren’t complete and potential terms could change. Any transaction is subject to bankruptcy court approval. The Wall Street Journal reported on the talks earlier.
Shares of Sinclair Inc., which owns Diamond, jumped after the Journal’s report, rising as much as 7.6% in New York before closing up 2.1%. The Hunt Valley, Maryland-based company owns, operates or provides services to 185 TV stations in 86 markets.
Diamond filed for Chapter 11 protection in March. The sports broadcaster’s officials said at a hearing on Dec. 15 it is still exploring potential restructuring transactions, countering comments Sinclair officials made in court last month that Diamond would probably liquidate. The Amazon proposal is the latest attempt to strike a deal in the case.
In November, Diamond announced multiple deals, including a cooperation agreement among certain creditors, that could see the company wind down after the 2024 sports seasons.
Under that agreement, which received court approval, senior lenders agreed to cap their recovery at $629 million, while junior creditors would receive any leftover value, along with proceeds from the sale of Diamond’s stakes in the Chicago Cub’s regional sports network Marquee and the Yankees’ YES Network.
The junior creditors also agreed to split proceeds from Diamond’s $1.5 billion litigation against Sinclair, court papers show.
Diamond is still working to meet the terms required for the cooperation agreement to become effective and junior creditors are seeking to round up majority support for the deal, according to people familiar with the matter. One outstanding hurdle is to finalize agreements with the NHL and MLB, according to court papers.
The terms of the Amazon deal would need to be more attractive in order to win over relevant stakeholders and gain court approval, according to some of the people.
Live sports are a big part of Amazon’s push to make more money from commercials and expand its advertising business beyond display ads and keyword search results on its web store.
During livestreamed NFL games, the e-commerce giant has aired commercials with QR codes that viewers can scan and go directly to a product on Amazon.com or a brand’s website. Live sports have more opportunities for commercial breaks than movies and shows, where advertisements can frustrate viewers.
The bankruptcy case is Diamond Sports Group LLC, 23-90116, U.S. Bankruptcy Court, Southern District of Texas.
--With assistance from Spencer Soper.
(Corrects reference to the requirements needed for cooperation agreement in ninth paragraph.)
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