Amazon may invest in Diamond Sports, take over digital distribution of games, report says

Sinclair's bankrupt regional sports broadcaster Diamond Sports Group could soon get a big boost from e-commerce giant Amazon, according to a report.

On Monday, the Wall Street Journal reported Amazon was discussing a possible investment in Diamond Sports and its regional sports networks, a move that could help better position the retailer in the sports broadcasting industry as it seeks to compete against other broadcasters and streaming services.

If those plans come together, Amazon's Prime Video service would distribute games offered by Diamond Sports, the WSJ said, citing unnamed "people familiar with the situation."

Reached by email on Monday, a spokesperson for Amazon declined to confirm or deny the report, saying the company "doesn’t comment on rumors and speculation." A spokesperson for Diamond Sports Group declined to comment on the WSJ report. 

Diamond Sports was formed in 2019 following the acquisition of nearly two dozen Fox Sports-branded channels by Sinclair Broadcast Group. The channels were divested by the Walt Disney Company in order to satisfy regulatory conditions associated with its purchase of certain film and TV assets from 21st Century Fox that same year.

Diamond Sports operates two dozen channels under the Bally Sports name as part of a licensing agreement with the gambling and entertainment company. Despite launching a standalone streaming version of its sports channels in various markets, Diamond Sports struggled to overcome billions of dollars in debt, with the subsidiary declaring bankruptcy in March and skipping out on payments to the various sports leagues and teams who long ago sold their telecast rights to the group.

Throughout the Chapter 11 process, some broadcast rights have reverted to individual teams and other stakeholders to include games that are now produced and distributed by Major League Baseball. The bankruptcy case is still ongoing, and it wasn't immediately clear from the WSJ's report how an investment from Amazon might affect the case.

The WSJ report did say that, should Amazon make any financial investment in Diamond Sports, the broadcaster would continue to operate its regional cable networks "through its existing partnerships." The fate of the standalone Bally Sports-branded streaming services launched and operated by Diamond Sports was also not clear, should Amazon pick up digital distribution of the channels and games.

Over the past few years, Amazon has been in hot pursuit of lucrative sports rights as it tries to position Prime Video as a destination for various types of entertainment. Four years ago, the tech giant acquires Disney's stake in the YES Network, a regional sports broadcaster that offers in-market New York Yankees games. Last year, Prime Video became the home of nationally-televised Thursday Night Football games after previously sharing those rights with the National Football League (NFL) and Fox Sports; CNBC reported Amazon will spend around $1 billion per year for 11 years to distribute live Thursday Night Football games on an exclusive basis (the games replay several hours later on NFL Network). Earlier this month, Amazon said it would take over Premier Boxing Champions broadcasts following the closure of Paramount Global's Showtime Sports, starting in March.

In addition to domestic sports rights, Amazon has secured contracts with various pro sports leagues to distribute games in overseas markets. Last year, Amazon inked a deal to distribute around 17 UEFA Champions League games in the United Kingdom after agreeing to pay around £150 million per year (about U.S. $190 million per year) for the privilege. It has similar soccer-focused telecast rights in Germany, France and Italy.

Updated with response from Diamond Sports Group.