Amazon in Discussions To Invest in and Partner With Diamond Sports

World-leading e-commerce giant Amazon is in conversation with regional sports programmer Diamond Sports Group to add another competitive string to its bow and take on rivals such as Netflix and Disney by expanding its portfolio of sports content.

Diamond Sports Group holds more than 40 major sports teams across the U.S. but filed for bankruptcy earlier this year and is keen to negotiate a strategic investment and a lengthy streaming partnership, The Wall Street Journal reports.

If these talks materialize into a big deal, the Amazon Prime Video streaming platform will become the hub for Diamond’s games.

The regional sports programmer has the local rights to around half the teams in the National Basketball Association and Major League Baseball. At the moment, around a third of the National Hockey League teams operate via its cable networks from partnerships that are already in place, and this will continue to be the case going forward. There is currently no indication as to the amount of money Amazon is looking to invest.

Diamond has received financial assistance from a range of creditors to enable the company to continue discussions with Amazon. However, it has some hurdles to overcome, as any transaction it wishes to make will need to be approved by the bankruptcy court, so there is still a chance it could fall through.

If a deal is reached, it would save Diamond, which operates Bally Sports-branded networks, from going into liquidation.

Amazon has already obtained the rights to stream National Football League games, and it is looking to negotiate to continue NBA games on its platform, so adding Diamond would give the company a good boost. Amazon is also in tune with the sports content space as it already has an investment in the YES Network, which is the TV and streaming hub for the Brooklyn Nets and New York Yankees.

As more consumers opt out of cable subscriptions to move over to streaming services, Diamond has been put in the spotlight for a drop in subscriber revenue. This also impacts its advertising rates, and it faced high fixed costs under its contracts that have become uneconomical, according to the Wall Street Journal.

It has been a challenging road for Diamond in its search to acquire streaming rights for the local teams it carries. The MLB has been particularly concerned about following through with Diamond acquiring blanket streaming rights for its networks.

In mid-March, Diamond entered Chapter 11 with the goal of renegotiating its contracts with teams and restructuring its more than $8 billion debt from Sinclair’s 2019 deal to purchase the company from Walt Disney. Diamond hoped to emerge from bankruptcy with a stronger balance sheet and a better digital strategy.

Diamond has been working with creditors, including PGIM, to strategize the next steps for the business. While some creditors suggest winding down as the optimal solution, others think the company can reach profitability by renegotiating commercial arrangements.