MSG Networks could reportedly strike deal with Amazon to avoid bankruptcy

The regional sports network business continues to be rife with turmoil. Friday, new developments emerged regarding the ongoing struggles at MSG Networks, the regional sports network that airs the New York Knicks, New York Rangers, New York Islanders, New Jersey Devils, and Buffalo Sabres.

Since the beginning of the new year, MSG Networks have been dark for a large portion of New Yorkers due to an ongoing carriage dispute with Optimum, the cable carrier of choice for approximately one-third of the region’s pay TV customers.

Now, according to a report by Josh Kosman in the New York Post, the network is looking to avoid bankruptcy by restructuring its debt with a group of lenders led by JPMorgan. Per Kosman, MSG may have to take cash from a new investor to help refinance the debt, with some sources speculating that Amazon could fill that role.

Amazon’s Prime Video is already involved in the regional sports network business, having struck a deal with Main Street Sports Group (née Diamond Sports) in November to stream its networks to fans within a channel’s geographic region.

“Sources said a key benefit in a deal with Amazon would be to give MSG Networks an alternative to Optimum,” Kosman reports.

Ironically, news that MSG Networks could avoid bankruptcy actually had shares of Sphere Entertainment (the network’s parent company), trading down on Friday. Investors had initially rewarded Sphere Entertainment for what they saw as a probable bankruptcy that would’ve lowered the company’s debt load and improved its balance sheet.

However, if a deal doesn’t come to fruition, and MSG Networks goes the bankruptcy route, the report suggests that the network’s lenders would take over operations and continue to air games. Additionally, “A bankruptcy also could raise the odds of a deal with Optimum, since a lighter debt load would enable MSG Networks to charge Optimum lower fees to carry its games,” Kosman writes.

Most recently, MSG Networks has proposed third-party binding arbitration to reach a new deal with Optimum, whose parent company Altice USA also finds itself in an unenviable, debt-ridden position. Altice USA called the offer a “PR stunt.” The cable operator is saving approximately $10 million per month by not carrying MSG Networks.

As far as any potential debt restructuring or Amazon deal, a source tells Awful Announcing there is “no news to report.”