Report: Amazon Looking To Invest In Diamond Sports Group

Amazon is in talks to invest in the biggest regional-sports programmer, a move that would advance the e-commerce giant’s aggressive push into sports content as it takes on streaming rivals like Disney and Netflix.

The Wall Street Journal reports Diamond Sports Group, which carries the games of more than 40 major sports teams across the country and filed for bankruptcy earlier this year, is actively negotiating with Amazon about a strategic investment and a multiyear streaming partnership, according to people familiar with the matter.

If an agreement is reached, Amazon’s Prime Video platform would eventually become the streaming home for Diamond’s games.

Diamond, which has the local rights to about half the teams in Major League Baseball and the National Basketball Association and about a third of the National Hockey League teams, would continue operating its cable networks through its existing partnerships. It isn’t clear how much money Amazon is planning to invest or at what valuation.

Diamond has received support from a select group of creditors for proceeding with the talks. Any transaction is subject to bankruptcy-court approval and could still fall through.

Should the companies manage to strike a deal, it could help enable Diamond, which operates Bally Sports-branded networks, to stave off liquidation.

For Amazon, which already has rights to stream National Football League games and is expected to pursue a deal to carry NBA games, adding popular local teams through Diamond would further boost its Prime Video platform. It already has deals with league-owned streaming services from the MLB and the NBA.

Amazon has already dipped its toe in the regional- sports-network business with a stake in the YES Network, the TV and streaming home of the New York Yankees and Brooklyn Nets.

 

Diamond’s business has been challenged by cord-cutting as consumers drop cable subscriptions in favor of streaming services. The sports-network operator has seen declines in subscriber revenue, which also adversely affects its advertising rates, and it faced high fixed costs under its contracts that have become uneconomical.

The regional sports operator has sought to acquire streaming rights for the local teams it carries, but that has proved challenging. The MLB in particular has been wary of seeing Diamond acquiring blanket streaming rights for its networks. 

The company entered chapter 11 in mid-March, aiming to renegotiate its contracts with teams and to restructure its more than $8 billion of debt stemming from Sinclair’s 2019 deal to purchase the company from Walt Disney.  

In recent weeks, Diamond has extended its contracts with the NBA, Comcast and DirecTV. An extension with the NHL is expected in the near term, some of the people said.