April 24, 2024

Amazon Faces Landmark Antitrust Suit For Monopoly Practices

According to a report by the Wall Street Journal, Amazon is planning to grow its presence in the streaming industry amid a planned investment into sports programmer, Diamond Sports Group.

Diamond Sports Group has a vast presence in the sports industry as it is currently the regional leader. This planned investment will see Amazon compete against streaming giants like Disney and Netflix.

Amazon’s Investment Could Save Diamond Sports Group from Liquidation

Diamond Sports Group is behind Bally sports-branded networks. It holds the local broadcasting rights for nearly half of the teams in Major League Baseball (MLB) and the National Basketball Association (NBA) after a 2019 deal with Fox.

Diamond Sports Group filed for bankruptcy in March 2023. The deal with Amazon will benefit Prime Video as it could emerge as the solo streaming platform for the extensive sports content offered by Diamond Sports Group.

The financial terms of this deal remain unknown. However, the deal will trigger a major comeback for Diamond Sports Group by expanding its presence in the sports broadcasting industry.

Any talks of a potential investment must get approval from the bankruptcy court. If approved, this deal could prevent the sports programmer from going into liquidation.

Diamond Sports Group started facing challenges amid a consumer trend shift from cable subscriptions to streaming services. This trend change has resulted in a drop in subscriber revenue numbers and advertising rates. The high fixed costs under existing contracts also forced the company into liquidation.

Diamond Sports Group filed for bankruptcy in a bid to renegotiate the team contracts and restructure debt. This partnership with Amazon will start the journey towards financial recovery and bolster the company’s digital strategy.

Any investment by Amazon will have to obtain approval from Diamond’s creditors. Some of the programmer’s creditors include leading firms such as Fidelity Investments, Mudrick Capital Management, and PGIM. These firms have been conflicted over the company’s future, with some saying liquidation was the best outcome.

Amazon Expands Into Sports Streaming Content

Amazon is weighing this investment amid increased demand for sports content. The company has already made moves to expand its presence in sports, including securing rights for the National Football League games.

Amazon Prime Video has also been eyeing a future deal with the NBA. It also holds stakes in the streaming services owned by the NBA and the MLB. Another sports-related investment Amazon makes is in the YES Network, which hosts the New York Yankees and Brooklyn Nets.

The planned investment in Diamond Sports Group pushes Prime Video closer to being a preferred streaming platform by sports enthusiasts. It will be an ideal platform for sports fans seeking live content, including regional sports.

The outcome of the negotiation deal between Amazon and Diamond Sports Group will affect the sports broadcasting and streaming industry. It points to the importance of sports content in the streaming industry, and it could transform how fans consume major sports.

Prime Video is not the only streaming brand leaning towards the sports industry. Netflix is also venturing into a live tennis match dubbed “The Netflix Slam,” where Rafael Nadal will face off against the world’s number 2 tennis player, Carlos Alcaraz. This live match will air on March 3, 2024.


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