Diamond Sports in deal to emerge from bankruptcy, signs streaming pact with Amazon (updated)

Sinclair

17/01/2024 19:30

(Adds Sinclair share movement in paragraph 3, details in
paragraph 5 and analyst comment in paragraph 7)
       Jan 17 (Reuters) - Regional sports programmer Diamond
Sports Group said on Wednesday it has signed an agreement with a
group of creditors to emerge out of bankruptcy and that it would
also get funding from Amazon.com  AMZN.O  as part of a streaming
deal.
    Diamond Sports, a unit of Sinclair Broadcast  SBGI.O , said
the deal would provide it with $450 million in financing, some
of which will be used to pay down debt and the rest to support
its operations as it finalizes its reorganization plan.
    Shares of Sinclair rose nearly 15% in afternoon trading.
    The company had filed for bankruptcy in March last year
after getting caught between expensive broadcast rights
agreements and cord-cutting by sports viewers.
    Amazon will make a minority investment in Diamond and its
Prime Video will now become the primary partner through which
customers can buy direct-to-consumer (DTC) access to stream
Diamond's local channels, which carries the games of more than
40 major sports teams across the U.S. 
    That would allow Prime Video viewers access to content
including live MLB, NBA and NHL games, and pre- and post-game
programming for the teams for which Diamond has DTC rights.
    "Amazon provided a lifeline to Diamond. This allows Amazon
to quickly expand its sports streaming options and to develop
relationships with local TV advertisers that support regional
sports networks," Insider Intelligence senior analyst Ross Benes
said.
    Separately, Diamond said it has reached a deal with Sinclair
to settle the pending litigation that alleged the parent firm
fraudulently withdrew as much as $1.5 billion from the regional
sports business.
    According to the settlement, Sinclair will pay Diamond $495
million in cash and provide ongoing management and transition
services to support its reorganization and separation from the
parent's operations, among others.

 (Reporting by Samrhitha Arunasalam in Bengaluru, additional
reporting by Jaspreet Singh in Bengaluru; Editing by Shilpi
Majumdar and Shailesh Kuber)
 ((Samrhitha.A@thomsonreuters.com))