Bankrupt Diamond Sports, which carries the rights to 37 sports teams across the MLB, NBA and NHL, has worked out a $450 million plan with creditors that will keep it operating beyond 2024, pending approval by a federal bankruptcy judge. The reorganization plan is not only important for the participation of powerhouse Amazon and its Prime service, but otherwise Diamond could face liquidation by the end of 2024.
Pending approval, many — but not necessarily all — of Diamond’s long-term broadcast contracts with various teams and leagues will remain intact.
“It all came as a surprise, we didn’t know anything about it,” MLB attorney Jim Bromley said in court Wednesday.
Questions still loom about three baseball teams in particular: the Cleveland Rangers, Texas Rangers and Minnesota Twins, and responses are expected by Feb. 1, Diamond’s attorney, Andrew Goldman, said at the same hearing.
Amazon, which hopes to broadcast Diamond’s teams on its Prime streaming service, is putting up $115 million of the $450 million in revenue and may invest another $50 million, the people, who were not authorized to speak publicly, said of the arrangement.
Diamond owns the broadcast or TV rights to 37 teams: fifteen in the NBA, and 11 in both MLB and NHL. Diamond also holds streaming rights — or direct-to-consumer (DTC) rights — to all but its six MLB teams. That’s where Prime belongs.
“Customers can access all local DTC content on Prime Video channels, including live MLB, NBA and NHL games and pre- and post-game programming,” Diamond said in a media release Wednesday.
The new agreement brings a new name to the diamond sites. Regional sports networks that carry Diamond teams are named Bally, but a new partner is sought for 2025 and beyond.
what happened wednesday
At 6 a.m. ET, Diamond sent out a news release and a summary of the plan he had arrived at. Amazon will own 15 percent of what will be a new company. Amazon may invest an additional $50 million within nine months of the event.
Diamonds are shaping up to grow from $49 million to $658 million by 2023, according to a forecast the company shared Wednesday morning. In a summary released Wednesday, Diamond estimates the company has reduced its rights portfolio to “minimize losses associated with certain group rights contracts.”
A court hearing was held at noon to update the various parties on the settlement reached by Diamond. Judge Christopher Lopez seemed at least mildly encouraged by the development.
“I think it’s definitely a positive development that the company is moving in this direction,” Lopez said. But again, it must meet the code and evidence requirements.
Some technical problems interrupted Wednesday’s court hearing. The court’s subpoena system failed when the first speaker, Diamond’s attorney Brian Herman, thanked the various people who helped craft the interim plan.
Before the matter was settled, Bromley, MLB’s attorney, picked up a note with “nothing” on it — conveying that he, like everyone else on the call, couldn’t hear what was being said.
When it was Bromley’s turn, he narrowly shut it down.
“You know, I’m glad to hear all the compliments,” Bromley said. “I think this is something that would be better addressed at a confirmation hearing, not at a status conference. So we’ll refrain from adding congratulations until something comes along.
What does it mean for baseball?
The NBA and NHL have both previously reached agreements with Diamond that provide some assurance of what will happen for 2024, which will be Diamond’s final year of business. Now, with this Amazon-backed plan coming, the NBA and NHL arrangements are largely going out the window — but MLB hasn’t even gotten to that point.
MLB and Diamond were in arbitration by another federal bankruptcy judge, Marvin Isgur. MLB was pushing for a deal that would carry 12 teams through the Diamond and Bally RSNs through 2024. That includes the 11 teams that Diamond currently has rights to, including the Twins, whose contract with the Diamonds expired after last season. In the agreement, Diamond did not get extensive digital rights (because today it holds only five of the rights of the teams) and after 2024, all 12 teams had to return their rights – this was the end of the relationship between MLB and Diamond.
If that goes through, MLB would be in a strong position to buy the team for 2025 and beyond to a company like Amazon or other major players without a diamond. There could be as many as 15 teams in half of the league to be included in a theoretical package: the 12 clubs in talks with the Diamonds, the Diamondbacks and Padres (who were with the Diamonds until mid-2023 and are now in MLB) and the Rockies (who will be moved by MLB this year).
Instead, Diamond is set to retain long-term contracts with most of his MLB teams, but three clubs are still up in the air, the Rangers and Rangers (under contract), and the Twins (out of contract).
“We have nine clubs that are clearly visible in it and that we are going to fully distribute and pay for the 2024 season,” said Andrew Goldman, another attorney for Diamond. Goldman added that Wednesday’s comprehensive plan will remain true even if it is not implemented.
The nine teams: Los Angeles Angels, Milwaukee Brewers, Atlanta Braves, St. Louis Cardinals, Miami Marlins, Tampa Bay Rays, Cincinnati Reds, Kansas City Royals and Detroit Tigers.
As for the other three teams, Goldman said, “We’ll put those three teams through the 2024 season on terms and conditions in a separate context and with the help of Judge Isgur on a pricing agreement.”
Goldman said Diamond would not be deterred if these groups did not want to be distributed by Diamond under these terms in 2024, and Diamond said it was interested in engaging all three groups in long-term talks.
“At least one of the three teams we expect close to business today will confirm that they’ve selected Gate No. 1 and are going to engage with us in long-term negotiations around long-term rights deals,” Goldman said. .
Rangers attorney Thomas Lauria said the team is studying Amazon’s plan and will respond quickly.
If not for Wednesday’s events, Friday could have brought clarity around the MLB-Diamond relationship. But a weekend hearing set to resolve the MLB and Diamond issues has instead been pushed back indefinitely. (The agreement between MLB and the Diamonds precludes the need for rescheduling.)
“We’re digesting a lot of data,” Bromley said. “Until now, we have been working through mediation… and we are nearing the conclusion of a heavily negotiated agreement.
There are many that cannot be digested because they are not bought, cooked or served.
The five MLB teams Diamond has digital rights to are the Brewers, Marlins, Rays, Royals and Tigers.
What does it mean for the NBA and NHL?
Last year, in the final months of 2023, the NBA and NHL each reached an agreement with Diamond Sports Group, which appeared to pave the way for the leagues to exit their relationship with the company. The NBA has 15 teams that broadcast their games domestically on BallySports RSN and have reached agreements to limit those contracts, some of which run for years after this season.
The agreement between Diamond Sports and the NBA amends rights agreements between the company and its teams in the agreement with Bally Sports RSNs, with broadcast and digital rights for those 15 franchises all reverting to the NBA and teams after the 2023-24 season. Instead of the first long agreements. In addition, their teams have developed the ability to broadcast multiple games through over-the-air channels in their respective markets. The Pelicans and Falcons have done this and have each scheduled 10 games on broadcast television in their respective markets.
The NHL then did the same last month.
“Given the totality of the circumstances, it’s a solution we’re comfortable with,” NHL deputy commissioner Bill Daly said. The athletics at the time.
Wednesday’s settlement agreement, if ultimately approved by a federal judge, would void those agreements. Diamond Sports holds the initial contract with 15 NBA teams and 11 NHL clubs and will handle the remaining contracts. A person briefed on the negotiations said Diamond Sports is prepared to honor the financial terms agreed to with the NBA and NHL for 2023-24 and is open to negotiating longer-term deals.
Still, the new developments seemed to catch the leagues by surprise. An attorney for Proskauer Rose, who represents the NBA, said at Wednesday’s hearing that the league needed time to review the statement.
“We have received the documents and are reviewing them,” an NBA spokesman said. The athletics. “We look forward to having productive discussions with Diamond in the coming days.”
Those are just short-term estimates. This comes as the NBA prepares to negotiate its next set of national media rights deals. Amazon has been considered a potential bidder for some NBA packages. The NBA has also previously considered a local streaming service to broadcast games to fans in markets that would help keep RSNs from specific providers and out-of-home, such as blackouts or cable debates.
The NBA could have sought such an option during negotiations this year or sought one of its own at some point, instead being limited by Diamond’s new partnership with Amazon.
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(Photo: David Berding / Getty Images)