A US bankruptcy court has approved beleaguered media company Diamond Sports Group's $495 million settlement from Sinclair Broadcast Group and $450 million debtor-in-possession (DIP) financing package.
Under the terms of the restructuring agreement, which was filed on January 17, $350 million of the DIP facility will be used to pay off various debts, with the rest to finance a reorganization plan.
DSG recently entered into a major deal with a group of creditors to come out of its almost year-long bankruptcy proceedings.
The company, a unit of Sinclair which owns a range of regional sports networks (RSNs) in the US, has said it will receive funding from Amazon, as part of a wider content streaming deal between the two organizations.
Amazon is reportedly putting in $115 million of the $450 million total and could potentially invest another $50 million. Amazon was first reported as being interested in investing in DSG in December.
DSG has worked out separate agreements with its rights partners in basketball’s NBA, ice hockey’s NHL, and baseball’s MLB, where its RSNs will continue to televise the teams’ games on its Bally Sports network in their respective home markets through the end of the 2023-24 seasons.
Regarding the 11 MLB clubs that remain affiliated with DSG, the local rights will expire at the end of this coming campaign, which begins on March 28.
The judge overseeing the case also said he would approve an amended agreement between DSG and Sinclair that would see Diamond withdraw its $1.5 billion litigation against its parent company in exchange for a cash payment of $495 million.
Amazon Prime Video is set to become DSG’s main partner through which customers can buy access to local DSG channels, while Amazon will also make a minority investment (15%) in the RSN provider.
This will allow Prime Video customers to access live games from the NBA, NHL, and MLB.
DSG had been navigating bankruptcy proceedings since March 2023 amid significant financial losses caused by the initial $10.6 billion it paid to purchase rights for 21 US sports teams from the Fox network in 2019.
Court filings had shown its RSNs had also lost 22 million subscribers and $810 million in revenue over the last four years.
The deal with the creditors prevents a complete collapse of the RSNs which cover a vast range of popular US sports franchises.
DSG has since separated from Sinclair to become a standalone company.
The RSN provider has now, off the back of the deal announcement, said it expects to see its direct-to-consumer revenue grow from $49 million in 2023 to $658 million in 2026.
