Amazon in talks with Diamond Sports for streaming deal, investment
AMAZON.COM 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 sources familiar with the matter.
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 sources, 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 sources said.
Representatives for Diamond and Amazon declined to comment. The talks are not 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, which owns Diamond, jumped after the Journal’s report, rising as much as 7.6 per cent in New York before closing up 2.1 per cent. 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.
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Under that agreement, which received court approval, senior lenders agreed to cap their recovery at US$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 US$1.5 billion litigation against Sinclair, court papers show.
So far, however, not enough junior creditors have thrown their support behind the cooperation agreement for it to become effective, according to one source.
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 sources.
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. BLOOMBERG
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