Diamond Sports Group (“Diamond” or the “Company”) today announced that it has entered into a Restructuring Support Agreement (“RSA”) with its largest creditor groups, including over 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, which provides a framework for a reorganization plan that would enable Diamond to emerge from bankruptcy as a going concern and continue its operations.
The RSA includes a commitment from certain of the Company’s debt holders to provide $450 million of junior secured superpriority debtor-in-possession financing. The proceeds of this financing will be used to support Diamond’s operations as the Company finalizes a comprehensive reorganization plan and to repay $350 million of Diamond’s existing first lien indebtedness to facilitate the restructuring. In addition, Diamond’s key creditors have reached agreement on financial terms and a go-forward capital structure that will be the foundation of the reorganization plan to facilitate Diamond’s emergence from bankruptcy as a going concern. 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 reorganized Diamond.
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.
Diamond also announced that it has an agreement in principle with its parent, Sinclair Inc., to settle the pending litigation between the companies and the other named defendants, which settlement is supported by Diamond’s creditors that are parties to the RSA. Under the settlement, among other things, Sinclair will pay Diamond $495 million 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 stated: “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.”
The RSA, the Amazon investment and commercial agreements, and the Sinclair litigation settlement are subject to conditions, and the transactions described therein are subject to approval by the U.S. Bankruptcy Court for the Southern District of Texas. Additional information regarding Diamond’s Chapter 11 cases, including court filings and information about the claims process are available at https://cases.ra.kroll.com/DSG.
About Diamond Sports Group
Diamond Sports Group LLC, an independently-managed and unconsolidated subsidiary of Sinclair Inc., owns the Bally Sports Regional Sports Networks (RSNs), the nation’s leading provider of local sports. Its 18 owned-and-operated RSNs include Bally Sports Detroit, Bally Sports Florida, Bally Sports Great Lakes, Bally Sports Indiana, Bally Sports Kansas City, Bally Sports Midwest, Bally Sports New Orleans, Bally Sports North, Bally Sports Ohio, Bally Sports Oklahoma, Bally Sports San Diego, Bally Sports SoCal, Bally Sports South, Bally Sports Southeast, Bally Sports Southwest, Bally Sports Sun, Bally Sports West, and Bally Sports Wisconsin. The Bally Sports RSNs serve as the TV home to half of all MLB, NHL and NBA teams based in the United States. Diamond Sports Group also has a joint venture in Marquee, the home of the Chicago Cubs, and a minority interest in the YES Network, the local destination for the New York Yankees and Brooklyn Nets. Diamond RSNs produce nearly 4,500 live local professional telecasts each year in addition to a wide variety of locally produced sports events and programs.
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