The Wall Street Journal - 18.03.2020

THE WALL STREET JOURNAL. **** Wednesday, March 18, 2020 |B3

BUSINESS NEWS

BYBENJAMINMULLIN

partment Tuesday.

Fox Corp.’s Fox Sports,

meanwhile, is running classic

games and other program-

ming, such as a documentary

on National Football League

great Tom Brady, according to

a spokesman. The network has

also aired live events from the

World Wrestling Entertain-

ment Inc. and the Professional

Bowling Association.

Sports-oriented digital pub-

lishers such as the Athletic,

Action Network and Barstool

Sports have come up with new

ways to fill their websites with

stories and analysis without

their customary diet of regular

games and postseason tourna-

ments.

The sports media got a bit

of a reprieve Tuesday, with

two major stories breaking:

Mr. Brady, the quarterback for

the New England Patriots, told

fans on Instagram that he was

leaving the team after two de-

cades in Boston, and Brooklyn

Nets star Kevin Durant said

that he tested positive for the

coronavirus.

The news that Mr. Durant

was among four Brooklyn Nets

players testing positive was

broken by the Athletic. Adam

Hansmann, the co-founder and

chief operating officer of the

San Francisco-based publisher,

said the Athletic decided to

turn its reporters loose on cov-

ering the effects of the corona-

virus across the U.S.

The website, which charges

users $5 a month to read

sports coverage, has seen a

slight slowdown in web traffic

since some major sports

leagues suspended play last

week, Mr. Hansmann said, but

is still preparing to follow

through on its plans to hire ad-

ditional writers and expand to

additional international mar-

kets by the end of the year.

The company, which raised

$50 million earlier this year,

has enough capital to weather

the suspension of sporting

events, he said.

A person familiar with Fox

Sports said much of the net-

work’s marquee programming

for the early part of the year

has already run, including the

Super Bowl, much of the XFL

season, the Daytona 500 and

the Tyson Fury vs. Deontay

Wilder pay-per-view boxing

match. The network’s stron-

gest programming begins in

the fall, with NFL games,

NCAA football and the World

Series.

Fox Corp. and Wall Street

Journal parent News Corp

share common ownership.

ESPN’s Mr. Magnus said the

network is considering running

sporting events that fall out of

the mainstream, as it has for

its ESPN8 “The Ocho” promo-

tion, a nod to the fictional TV

network that aired competitive

dodgeball in the movie

“Dodgeball: A True Underdog

Story.” ESPN has aired the

World Cornhole Championship

and cherry-pit spitting compe-

titions, among other sports,

for “The Ocho” in the past.

ESPN is also trying to li-

cense rights to archived

games, Mr. Magnus said, which

will require negotiations with

various sports leagues.

No Games for Sports Media

Broadcasters fill void

with reruns, analysis

and coverage of virus’s

impact on athletics

Broadcasters were left with holes in their programming schedules after several sports leagues suspended play due to the coronavirus.

ASHLEY LANDIS/THE DALLAS MORNING NEWS/ASSOCIATED PRESS

ruptcy, according to people fa-

miliar with the situation. He

also owns Sears Home Ser-

vices, which provides service

and repairs for appliances;

Sears Parts Direct, which sells

replacement parts; Sears

Home Improvement, which of-

fers remodeling services; and

other businesses.

Costco, which has been a

customer of Innovel since

2015, said it funded the deal

with its existing cash balances.

It has been opening smaller

stores and last year bought

the Sears Hometown Stores, a

chain that sells mainly appli-

ances, tools and other hard-

goods.

Mr. Lampert has divested

other assets, including the

DieHard battery brand, which

he sold to Advance Auto Parts

Inc. in December. Innovel was

considered the crown jewel of

the businesses that Mr.

Lampert bought out of bank-

Major sports broadcasters

and digital publishers are

scrambling to find alternatives

to fill the void left by the sud-

den disappearance of live

games due to the coronavirus,

opting for a mix of reruns,

analysis and coverage of the

virus’s impact on sports

leagues.

Bereft of games from the

National Basketball Associa-

tion, Major League Soccer and

the NCAA,Walt DisneyCo.’s

ESPN is considering a variety

of options, including repackag-

ing archived games and push-

ing up the release date for

original content to fill the air,

Burke Magnus, the network’s

programming chief, said in a

question-and-answer session

with its public-relations de-

Costco Wholesale Corp.
said it acquired logistics com-
panyInnovel Solutionsfrom
Transform HoldcoLLC, the
operator of Sears and Kmart
stores, for $1 billion.
The deal isCostco’s largest
acquisition since it merged
with Price Club in 1993, and
continues a broader effort by
Sears’s owner to shed assets.
Transform Holdco, the com-
pany controlled by financier
Edward Lampert that acquired
hundreds of Sears and Kmart
stores out of bankruptcy, said
it would use proceeds from
the sale to repay all of its non-
real-estate debt.
Costco said Innovel em-
ploys more than 1,500 people
and operates 11 distribution
centers and more than 100 fi-
nal-mile cross-dock centers.
The Issaquah, Wash., ware-
house-club operator said In-
novel provides final-mile de-
livery and installation for
large and bulky products, such
as appliances, furniture and
mattresses.
Transform Holdco, which
has already closed many
stores, said it plans to further
streamline its retail operations
and focus on stores with a
strong record of success or
meaningful real-estate value.

BYCOLINKELLAHER
ANDSUZANNEKAPNER

Costco Acquires Lampert’s

‘Final Mile’ Logistics Firm

FedExCorp. said it would
reduce its delivery capacity
and retire aircraft, unveiling
new cost-cutting measures af-
ter the coronavirus pandemic
disrupted global trade pat-
terns and economic activity.
The delivery giant also
pulled its earnings guidance—
the first time in its 50-year
history that the company has
withdrawn its outlook. It joins
several dozen companies in re-
tracting their forecasts.
“The Covid-19 pandemic is
having a significant impact
around the world,” FedEx
Chief Executive Fred Smith
said in Tuesday’s earnings re-
lease. He said the company is
anticipating increased demand
for overseas shipments but is
unsure what the global impact
is from tens of millions of
households taking measures to
reduce the spread and the re-
sulting downdraft in economic
growth. “We will continue to
support efforts to combat the
pandemic,” he said.
Amazon.com Inc. said this
week it plans to hire an extra
100,000 employees in the U.S.
as millions of people turn to
online deliveries at an unprec-
edented pace. The e-commerce
giant, which no longer uses
FedEx, also said it was taking
steps to prioritize shipments
of medical supplies and house-
hold staples.
FedEx is also seeing de-
mand pick up in some areas as
a result of the coronavirus, ex-
ecutives said. Flights out of
Asia are filling up as factories
and stores across the globe
need parts and inventory. In
the U.S., the ground business
has been bolstered by more
people who are avoiding
stores and shopping online.
But FedEx executives say
the world is changing quickly.
“What we do not know is
how the pandemic evolves and
what happens to demand,”

FedEx Chief Operating Officer

Raj Subramaniam said on

Tuesday’s earnings call. “The

first two weeks of March have

been good but there’s no way

to project forward what the

next few weeks hold for us.”

FedEx’s fiscal third-quarter

earnings fell by more than half

to $315 million from $739 mil-

lion last year. Excluding items

like integration expenses and

realignment costs, per-share

earnings were $1.41 in the lat-

est period, down from $3.03

last year.

The sharp declines repre-

sented the impact from the

pandemic, as well as other

business challenges hitting

FedEx, like increased costs

from expanding its Ground de-

livery service and the loss of

Amazon last year as a cus-

tomer.

Mr. Smith said the global

economy is already being hurt

by trade wars and tariffs but

that the pandemic is going to

cause further problems.

“You add the coronavirus

on top of that and world GDP

growth this year is going to be

extremely small,” he said.

Total revenue rose 3% to

$17.5 billion, as double-digit

growth in FedEx’s Ground divi-

sion, which is bolstered by

more people shopping online

during the holiday season and

beyond, offset shrinking reve-

nue in its Express division.

The company’s revenue

topped analysts’ consensus

from FactSet, while adjusted

earnings met analysts’ expec-

tations.

FedEx shares, up 1% to $96

in aftermarket trading, have

taken a beating during the

coronavirus pandemic.

Through Tuesday’s close,

shares are down more than

42% from their high for the

year, including its largest daily

decline on Monday since the

1987 stock market crash.

—Allison Prang

contributed to this article.

BYPAULZIOBRO

FedEx to Reduce

Capacity as Virus

Disrupts Economy

Appliances at Costco. Innovel delivers and installs bulky purchases.

FREDERIC J. BROWN/AGENCE FRANCE-PRESSE/GETTY IMAGES

media, technology, consumer

and sports companies.

Tegna’s shares climbed 15%

to $17.29 in Tuesday’s after-

hours trading.

The bid comes just a week

after media mogul Byron Allen

made an all-cash, $20-a-share

bid for the broadcaster.

Private-equity firmApollo

Global ManagementInc. has

also set its sights on Tegna,

offering the company an all-

cash $20-a-share bid earlier

this month.

Another contender is rival

broadcaster Gray Television

Inc., which made a $20-a-

share offer for the Tysons, Va.,

broadcaster, though its offer

was a mix of mostly cash and

some stock.

Tegna, which is one of the

biggest broadcasters in the in-

dustry, has been in the

crosshairs of activist investor

Standard General LP, which

owns about 9.7% of the com-

pany, according to a securities

filing. In January, the hedge

fund nominated four candi-

dates to the company’s board,

setting up a proxy fight. Stan-

dard General nominated a fifth

director candidate last month

and has previously said Tegna

should entertain the Gray and

Apollo offers.

Private-equity firmNajafi
Cos. and faith-based broad-
casterTrinity Broadcasting
Networkhave offered to buy
TegnaInc. for a cash consid-
eration of $20 a share, adding
its bid to a crowded playing
field of potential suitors.
The deal values the broad-
caster at roughly $4.4 billion
and would bring Tegna’s 62
television stations and four ra-
dio stations in 51 markets to-
gether with Trinity Broadcast-
ing’s 32 global networks in
more than 175 countries. Phoe-
nix-based Najafi focuses on

BYKIMBERLYCHIN

Broadcaster Tegna Gets New Bid