Amazon is in talks to expand into the sports content market through potential investments in the Diamond Sports Group (DSG), as reported by the Wall Street Journal (WSJ). This move comes as Amazon is also considering acquiring streaming platforms Disney and Netflix. The DSG, which holds local rights to numerous Major League Baseball, National Basketball Association, and National Hockey League teams, is currently seeking investment as it filed for bankruptcy earlier in 2023.
If a partnership is formed, it would see Amazon’s Prime Video platform become the exclusive streaming home for Diamond’s games. The exact value of Amazon’s planned investment remains unknown, but it is reported that the DSG has secured support from a group of creditors for the negotiations. If successful, the investment could potentially prevent the DSG from liquidation, pending approval from the bankruptcy court.
Amazon’s interest in the DSG comes as it seeks to expand its sports content offerings, particularly in NBA game coverage. The addition of local teams through Diamond could bolster Amazon’s regional sports network operations, as the company has already established a presence in the industry through its stake in the YES Network, covering the New York Yankees and Brooklyn Nets.
The DSG filed for bankruptcy in March 2023 as consumers shifted away from cable subscriptions in favor of streaming services. To emerge from bankruptcy with a stable financial and operating strategy, the company aims to restructure over $8 billion of debt. It recently extended contracts with the NBA, Comcast, and DirecTV, and expects to have the NHL contracts extended in the near future.
The ongoing negotiations with Amazon have garnered support from various creditors, including PGIM, Fidelity Investments, and hedge funds like Mudrick Capital Management. While some creditors suggest winding down the business, others advocate for renewing negotiations on existing contracts to move towards solvency. Amazon continues to weigh its investment bid amidst this situation.
Overall, Amazon’s interest in investing in the DSG demonstrates its ambitions to expand its presence in the sports content market, particularly in regional sports network operations, as it seeks to diversify its streaming offerings and compete with other major players in the industry.