Earlier in the year, Amazon agreed to provide Diamond Sports Group with $115 million in financing if the regional sports network conglomerate was able to emerge from Ch. 11 bankruptcy. The cash infusion was set to provide Amazon with the local streaming rights for NBA teams in the Diamond Sports Group portfolio. Part of the restructuring agreement, which has yet to be approved by the court, included this payment that was expected to be used in order to pay back some of the $450 million Diamond would receive for debtor-in-possession financing. According to a new report from Tom Friend of Sports Business Journal, the offer for funding set forth by Amazon earlier in the year has been pulled.
Diamond Sports Group recently reached deals with the NBA and NHL to broadcast local games for 22 teams through at least the 2024-25 season. Despite the reported expiry of the funding offer from Amazon, Diamond is still expected to move forward and try to exit bankruptcy. Sources cited within the report indicated that over the last eight months, the broadcasting landscape has changed and altered the overall value of the partnership for Amazon.
Under the new arrangement with the NBA, Diamond moved to selectively reject the contracts of the Dallas Mavericks and New Orleans Pelicans after both franchises requested their mutual termination, while retaining rights for 11 teams. Since agreeing to the deal with Diamond, Amazon has agreed to an 11-year media rights deal with the NBA and a two-year sublicensing contract with Rogers Communications for Monday night NHL games. In addition to its agreements with the NBA and NHL, Diamond Sports Group also renewed its carriage agreement with Comcast after a dispute that stretched several months.
Even without the financing from Amazon, sources indicated that Diamond Sports Group still has enough financing that will allow it to present a restructuring plan to the bankruptcy court. Earlier in the process, an amended management services agreement between Diamond and its parent company, Sinclair, was approved that granted the regional sports network subsidiary a cash payment of $495 million. In exchange for this remuneration, which also includes services to allow it to become its own “self-standing entity going forward,” Diamond agreed to drop all litigation against Sinclair and other defendants that totaled $1.5 billion.
Under the $450 million debtor-in-possession financing that had been approved in February, junior creditors were expected to assume operations of the subsidiary if it was able to execute the restructuring support agreement. Furthermore, $350 million of those funds were to be utilized as paying its first-lien debt holders, while the remainder would have been transferred to the company’s balance sheet. Amazon would reportedly not have made its $115 million convertible notes payment until 12 weeks after Diamond Sports Group exited Ch. 11 bankruptcy.
