UPDATE 1-Diamond Sports in deal to emerge from bankruptcy, signs streaming pact with Amazon
(Adds Sinclair share movement in paragraph 3, details in paragraph 5 and analyst comment in paragraph 7)
Jan 17 (Reuters) - Regional sports programmer Diamond Sports Group said on Wednesday it has signed an agreement with a group of creditors to emerge out of bankruptcy and that it would also get funding from Amazon.com as part of a streaming deal.
Diamond Sports, a unit of Sinclair Broadcast, said the deal would provide it with $450 million in financing, some of which will be used to pay down debt and the rest to support its operations as it finalizes its reorganization plan.
Shares of Sinclair rose nearly 15% in afternoon trading.
The company had filed for bankruptcy in March last year after getting caught between expensive broadcast rights agreements and cord-cutting by sports viewers.
Amazon will make a minority investment in Diamond and its Prime Video will now become the primary partner through which customers can buy direct-to-consumer (DTC) access to stream Diamond's local channels, which carries the games of more than 40 major sports teams across the U.S.
That would allow Prime Video viewers access to content including live MLB, NBA and NHL games, and pre- and post-game programming for the teams for which Diamond has DTC rights.
"Amazon provided a lifeline to Diamond. This allows Amazon to quickly expand its sports streaming options and to develop relationships with local TV advertisers that support regional sports networks," Insider Intelligence senior analyst Ross Benes said.
Separately, Diamond said it has reached a deal with Sinclair to settle the pending litigation that alleged the parent firm fraudulently withdrew as much as $1.5 billion from the regional sports business.
According to the settlement, Sinclair will pay Diamond $495 million in cash and provide ongoing management and transition services to support its reorganization and separation from the parent's operations, among others. (Reporting by Samrhitha Arunasalam in Bengaluru, additional reporting by Jaspreet Singh in Bengaluru; Editing by Shilpi Majumdar and Shailesh Kuber)
