Ecommerce giant Amazon.com Inc (NASDAQ: AMZN) is investing more in the world of media rights for sports, a move that comes after success with its National Football League Thursday Night Football games.
What Happened: As previously rumored, Amazon is coming to the rescue of Diamond Sports Group, which is the largest U.S. operator of regional sports networks.
Backed by parent company Sinclair, Inc (NASDAQ: SBGI), Diamond Sports is seeking to emerge from bankruptcy.
Amazon is buying a minority stake in Diamond Sports as part of an agreement and will become the primary partner for consumers to purchase streaming services for the regional sports networks as part of the deal, as reported by The Hollywood Reporter.
The deal with Amazon includes Sinclair making a $495 million cash payment to Diamond Sports Group, settling existing litigation. The agreement states that Sinclair will "settle the pending litigation between the companies and the other named defendants."
Sinclair will provide management and transition services to support Diamond's reorganization and separation from Sinclair's operations.
Amazon's rescue plan helps satisfy restructuring efforts from creditors that "provides a framework for a reorganization plan that would enable Diamond to emerge from bankruptcy as a going concern and continue its operations."
The regional sports channels owned by Diamond Sports were previously known as Fox Sports Networks. The company was divested from The Walt Disney Company (NYSE: DIS) as part of its buyout of 21st Century Fox and originally valued at $9.6 billion.
Why It's Important: Diamond is the largest regional sports network operator and covers 11 MLB teams, 15 NBA teams and 11 NHL teams.
"Customers will be able to access all local DTC content, including live MLB, NBA and NHL games, and pre-and post-game programming, for the teams for which Diamond retains DTC rights, through Prime Video Channels," the company said.
Amazon will release details on pricing and availability in the future.
Diamond's rights to various teams might shift, particularly as more teams dispute unpaid dues and considering Diamond's recent declaration of bankruptcy.
The current MLB teams on Bally Sports are the Atlanta Braves, Cincinnati Reds, Cleveland Guardians, Detroit Tigers, Kansas City Royals, Los Angeles Angels, Miami Marlins, Milwaukee Brewers St. Louis Cardinals, Tampa Bay Rays and Texas Rangers.
Diamond and the NBA are working on a deal to keep 15 NBA teams on Bally Sports through the end of the 2023-2024 season. The NBA teams with current deals on Bally Sports are the Atlanta Hawks, Charlotte Hornets, Cleveland Cavaliers, Dallas Mavericks, Detroit Pistons, Indiana Pacers, Los Angeles Clippers, Memphis Grizzlies, Miami Heat, Milwaukee Bucks, Minnesota Timberwolves, New Orleans Pelicans, Oklahoma City Thunder, Orlando Magic and San Antonio Spurs.
NHL teams on Bally Sports include the Anaheim Ducks, Carolina Hurricanes, Columbus Blue Jackets, Dallas Stars, Detroit Red Wings, Florida Panthers, Los Angeles Kings, Minnesota Wild, Nashville Predators, Phoenix Coyotes, St. Louis Blues and Tampa Bay Lightning.
Benzinga previously reported that Amazon is eager to acquire national streaming rights for NBA games in the upcoming renewal deal. The company already holds the "Thursday Night Football" rights with the NFL and has recently secured NASCAR content in a new agreement.
Amazon is also an investor in YES Network, which is the media home of the New York Yankees and Brooklyn Nets.
News of Amazon's interest in the Diamond Sports streaming rights comes as streaming rivals like Netflix Inc (NASDAQ: NFLX) have been more aggressive in bidding on and landing media sports rights for live events and leagues.
Amazon's NFL rights have successfully increased Prime Video subscriptions and garnered high viewership ratings. The company landed 11 spots on the top 100 primetime broadcasts of 2023, with six Thursday Night Football games ranking among the 50 most-watched primetime events in the U.S. in 2023.
With streaming control over the regional MLB, NBA and NHL games along with its NFL rights deal, Amazon now has coverage of content in all four major North American sports leagues.
SBGI, AMZN Price Action: Shares of Sinclair Inc. are up over 14% to $15.60 on Wednesday versus a 52-week trading range of $9.39 to $22.41.
Amazon shares are down 1.3% to $151.15 versus a 52-week trading range of $88.12 to $157.17.