US regional media and entertainment company Diamond Sports Group, operator of Bally Sports, has entered into a restructuring agreement that will see it emerge from bankruptcy.
As part of the deal, a minority investment by Amazon will see Prime Video become Diamond’s primary partner, enabling Prime customers to access all local direct-to-consumer (DTC) content, including live MLB, NBA and NHL games, for the teams for which Diamond retains DTC rights.
The Restructuring Support Agreement (RSA) has been agreed with Diamond’s largest creditor groups, including over 85% of first lien debt holders, over 50% of the company’s second lien debt holders, and over 66% of unsecured bond holders.
The RSA includes a commitment from certain debt holders to provide US$450m of junior secured super priority debtor-in-possession financing, which will be used to support Diamond’s operations and repay US$350m of Diamond’s existing first lien debt. Certain large holders of Diamond’s debt have committed to make a substantial investment in the company and exchange their debt into equity to be issued by the reorganized Diamond Sports Group.
Diamond has also reached an agreement in principle with its parent company Sinclair to settle the pending litigation between the companies and the other named defendants. Under the settlement, Sinclair will pay Diamond US$495m in cash and provide ongoing management and transition services to support Diamond’s reorganization and separation from Sinclair’s operations. Under the RSA, the proceeds from the Sinclair settlement will be used to support the reorganization plan and fund distributions to certain creditors.
David Preschlack, CEO of Diamond, said: “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.”
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