Amazon and Bally Sports logos.

Bankrupt Diamond Sports Group, parent company of Bally Sports Regional Sports Network, announced this morning its creditors have agreed to a plan to emerge from Chapter 11, but MLB is not on board.

The deal includes a $100 million infusion from Amazon, which will be the digital platform for Bally Sports, which has those rights to five MLB teams. The plan also ends litigation against DSG parent Sinclair, which will pay $495 million for the support. Diamond CEO David Preschlack is quoted in the release with the following:

 We are thrilled to have reached a comprehensive restructuring agreement that provides a detailed framework for a reorganization plan and substantial new financing that will enable Diamond to operate and thrive beyond 2024. We are grateful for the support from Amazon and a group of our largest creditors who clearly believe in the value-creating potential of this business. Diamond’s near-term focus will be on implementing the RSA and emerging from bankruptcy as a going concern for the benefit of our investors, our employees, our team, league and distribution partners, and the millions of fans who will continue to enjoy our broadcasts.

MLB not coming to terms means, unlike with the NBA and NHL, there is no agreement to end their teams’ contracts at the end of the current season. So the 11 MLB teams with Bally Sports deals will continue under the umbrella for linear past 2024 until the end of their contracts. Five of the teams also have digital rights deals with Bally Sports, and those will now be offered on Amazon Prime. Those five are the Detroit Tigers, Kansas City Royals, Miami Marlins, Milwaukee Brewers and Tampa Bay Rays.

One of the biggest revelations is that Prime Video will become Diamond’s partner where fans will be able to purchase DTC access to stream local channels thanks to an investment from Amazon.

Under the terms of the RSA, Amazon also has committed to make a minority investment in Diamond and enter into a commercial arrangement to provide access to Diamond’s services via Prime Video. Under this arrangement, Prime Video will become Diamond’s primary partner through which customers will be able to purchase direct-to-consumer (DTC) access to stream local Diamond channels. 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. Additional details regarding pricing and availability will be announced at a later date. In addition, Diamond looks forward to continuing to partner with its existing MVPD distribution partners to broadcast its MLB, NBA and NHL content.

Amazon already has a foot in the door in local baseball games. It shows a limited number of New York Yankees games exclusively in market. Amazon is an investor in the YES Network, as is DSG. However, DSG would sell the YES stake if its emerging plan to exit Chapter 11 is approved.

Amazon is better known in sports for its exclusive deal to air the NFL’s Thursday Night Football package, and recently picked up a handful of NASCAR races. Those are all national deals, but local sports are a different kettle of corn so to speak.

While sports media obsesses over national TV ratings such as those for the World Series, local games are often the strongest content in given markets. True, cord cutting has taken a wrecking ball to the linear cable ecosystem, and World Series ratings have been declining for years, but the day in day out ratings in the local markets for baseball are strong. According to Nielsen, In 2023, MLB had a gross audience of 407 million people for games on RSNs versus the NBA, which had 122 million, and the NHL which had 77 million in their most recently completed seasons (’22-’23).

The agreements DSG has with the NBA and NHL, and was striving to sign with MLB, end all the team contracts early and in some cases cut the rights fees. MLB could not come to terms, and now it appears the 11 teams will stay under the Bally brand beyond this upcoming season.

For MLB that is a disappointment as it has its own aggressive effort underway to create a local media business. That business stepped in to back up the Arizona Diamondbacks and San Diego Padres after DSG stepped away from those deals. MLB envisioned assembling multiple teams rights and offering digital packages for in-market rights the way it has for out of market rights through MLB.TV.

As part of the Chapter 11 plan, the principal debt holders would convert their debt into equity, becoming the principal owners of DSG. In a statement, DSG said 85% of the Company’s first lien debt holders, over 50% of the Company’s second lien debt holders, and over 66% of unsecured bond holders agreed to the exit plan. DSG has 18 owned-and-operated RSNs as part of its nationwide portfolio.

About Daniel Kaplan

Daniel Kaplan has been covering the business of sports for more than two decades. A proud founding reporter of SportsBusiness Journal, he spent the last four years at The Athletic.