Diamond Sports Group has settled its lawsuit against parent company Sinclair Broadcast Group that accused the latter of raiding its bank account to cover certain debts, the companies announced on Wednesday.
The lawsuit filed by Diamond last August charged Sinclair with bilking the sports broadcaster out of around $1.5 billion, which ultimately led to Diamond’s Chapter 11 bankruptcy case.
On Wednesday, Diamond and Sinclair announced a resolution in the matter, affirming that Diamond had reached a restructuring support agreement, or RSA, with its creditors after Sinclair agreed to make a $495 million cash payment to its own subsidiary.
As part of the deal, tech giant Amazon will take a minority stake in Diamond and become the exclusive digital distribution partner for its Bally Sports-branded streaming service, which offers online access to live sports programming through Diamond’s 19 regional sports cable channels. Amazon will distribute Diamond’s Bally Sports programming through its streaming marketplace, Prime Video Channels.
The settlement requires the approval of a federal judge assigned to Diamond’s Chapter 11 bankruptcy case, and a motion is expected to be filed next week on the matter, Diamond and Sinclair affirmed on Wednesday.
If approved, it would resolve matters with around 85 percent of Diamond’s first lien debt holders, over half of its second lien debt holders, and more than two-thirds of its unsecured bond holders.
“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,” David Preschlack, the CEO of Diamond Sports Group, said in a statement on Wednesday. “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.”