Back in January, Diamond Sports Group generated a lot of buzz over a plan that was intended to not only lift the company out of bankruptcy, but also position a behemoth behind it: Amazon. Diamond, the operator of a collection of regional sports networks, had filed for bankruptcy 10 months earlier, and looked to be heading toward liquidation until it proposed the Amazon-backed plan.
But now Amazon has nixed its planned $115 million investment, as first reported by Sports Business Journal and confirmed by people briefed on the matter who were not authorized to speak publicly. In the wake of that decision, industry executives and experts hold mixed opinions on why Amazon made that choice, and what it means for Diamond’s future, which was already murky.
Amazon and Diamond declined comment, according to The Athletic.
Importantly, Amazon’s investment never was to be delivered right away, but instead once the company had emerged from bankruptcy — which hasn’t happened. That made it a low-risk opportunity, one that perhaps provided the company a valuable up-close look at Diamond’s operation.
“Amazon almost always has a way out,” said Crakes, who has advised some unsecured creditors in the Diamond bankruptcy proceeding. “Because they are so big, they can kind of dictate terms.”
As for Amazon’s possible motivations to exit, Crakes believes the company could have seen that Diamond was likely to safely emerge from bankruptcy, therefore limiting Amazon’s opportunity to grow its own sports-media-rights business further in the near future.
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