♪ carol: welcome to "businessweek" on bloomberg television. i'm carol massar. sumner redstone stepping aside from cbs and leaving a melodrama in his wake. david: a company is betting hunters want high-end, high-functioning gear. all that as we go behind the scenes of the latest issue of "businessweek" here on bloomberg television. ♪

carol: definitely a a lot of topical stories, but something that caught my attention has to do with amazon and their quest to rule the world. there is a report, an internal report, but some folks have gotten hold of it and shared it. it looks like they want to be big in terms of delivery, so maybe head-to-head with ups, fedex, owning the fulfillment space and internet globally. david: eager to see what happens with that. another great piece was about the canadian dollar. and the effect it's having on the hockey league. you have these teams -- in canadian dollars. carol: currency causing a lot of problems around the globe. diapers, you know them. i know them. we have had kids.

adult diapers, and this is a business that is growing rapidly and outpacing the diapers you see for kids. interesting area, stranger, but a growth business. i was going to talk about crude oil. it is plummeting more than 70% from its 2014 high, the s&p 500 off to its worst start since 2008. david: oil and stocks have developed an unhealthy, codependent relationship. carol: in this week's cover story, peter coy has that story for us. bad time for it to be breaking up, i don't know. this correlation has investors confused. peter: we saw it last week, the amazing decline in oil that seemed to alarm investors and they sold stocks. it is continuing this trend we have seen all year long, an unhealthy, codependent relationship just in time for valentine's day. i think it is overdone.

carol: the relationship? peter: people should not be responding this way. first of all, i don't think the fall in oil is justified. it is just overshot. we are at levels now where people can't make money, and drilling is going away. eventually, production will fall and the price will shoot right back up again, but even leaving that aside, if you assume oil prices stay down here, it does not justify the decline and stocks we have seen. i think it is because people are assuming that if oil goes down, it must be evidence that there is a problem in the demand side of the global economy. if people don't consume oil, that will be bad for global growth, which will hurt corporate profits, which will hurt the s&p.

that's not what were seeing here. carol: you break down statistics and numbers and talk about supply and demand. people are using more oil, aren't they? peter: they are people other than using less oil, they are using more. you go from the third quarter of 2015, 2013 through the third quarter of 2015, the most recent data available, the demand for oil globally went up 3.1 million barrels per day. the only reason the prices down is that the supply grew by 5 million barrels a day, so the issue with the low price of oil is a supply problem, not a demand problem that everybody seems to be worried about. david: you talk to investors and look at financial stocks, banks are worried that they have lent money to these energy companies. they are over extended. is that unfounded? peter: i think that is overdone as well. i'm glad you brought it up.

if you look at the data -- let's take the u.s. and look at the problem areas, russia, venezuela, other high-cost energy producing nations, the u.s. is not lending money to those nations. there is some lending going on to the shale producers in the u.s., but if you look at them as a share of the total bank lending, it is tiny. i did an interview with -- that says that most of those loans will eventually get repaid, even if the companies have to go through bankruptcy to do it. carol: what's interesting is the correlation in terms of we typically get an oil spike before a recession. peter: exactly. if we had oil spiking, then i would be worried about a recession. here we have a cut in the price

of oil, people are saving money at the prompt and have more money to spend and we are suddenly worried about a recession. what is wrong here? carol: it doesn't make sense. david: this week we saw oil go below $28 a barrel, $27 a barrel, people get spooked when that happens. how does the market shake that? peter: it is a psychological factor, but i would counter it with another psychological factor that the markets aren't paying attention to. people are pulling up to the pump and seeing prices they have not seen in a long time and are feeling good about that, helping consumer confidence, spending, and the economy. carol: what about the capital expenditures by the oil companies. these major integrated oil companies spend a lot of money when it comes to capital expenditures. if they pull back, you feel that. peter: we have a quote in the story from somebody saying that

total reduction in capital expenditure is something on the order of $1 trillion, but you have to lay that against the overall size of capital spending in all sectors of the economy, including the ones energized by the cheaper cost of oil and will be able to invest more, so it is not a zero-sum game here. carol: you are the optimist. peter: i'm trying to be. david: last question, how do u.s. investors shake this? -- how do you as an investor shake this? there are all these reasons why the u.s. economy is doing well, but the still looms on the horizon. is it possible to be in investor and ignore which are seeing in oil prices? peter: if you are a long-term investor, and i would think most people should be long-term investors, then you want to be able to look through the ups and downs of the market. oil gyrate's, it always has and will. it is the nature of oil to be like that. stocks are also volatile. if you are hanging in for the long term, you want to think about what is the underlying health of america and the other

countries where you are putting your money, and if you are confident in that, stay invested. carol: on this valentine's day weekend, time for the relationship to be over? peter: it is time to break that intimate connection between oil and stocks. carol: it is a great story. david: check it out online where it is animated. carol: you can read peter's story and the latest edition of "businessweek". david: what's ahead for viacom? we will take a look at the details when "businessweek" on bloomberg television returns. ♪

david: a changing of the guard at cbs and viacom. carol: and an end to sumner redstone's reign over a company that he has controlled for 30 years. david: let's talk about the void that sumner redstone's departure leaves. >> this is the moment that people have been waiting for for a long time. there have been all these rumors, conflicting reports, about sumner redstone's health. he is 92 years old, so finally the moment, where he steps down as chair of cbs and viacom. immediately cbs, no drama, no surprise, les moonves well thought of. he is a ceo elevated to chair.

viacom, totally different story. david: why is it a different story? >> basically the last year and a half, two years, viacom has been struggling, cable networks, nickelodeon, falling off a cliff. it is not a diversified business. as the ratings have fallen, the stock price has gotten crushed, down more than 50% over the past year, and as all that has happened, investors have said something needs to change. we need management, a new strategy, something, but basically as long as sumner has been in the picture, he is very close with the ceo of viacom, people are like it's not going to change until something changes with sumner, but as these reports about his health were going along, ok, sometime he will have to step down. there was all this mounting pressure. he can handle his duties, and finally this moment comes, everyone's watching, and for the first hour or two it looked like there was going to be a shakeup because his daughter, sherri redstone, comes out immediately with a statement essentially saying that i don't want philippe dauman taking over his chair. david: there have been so many reports about his health. you wrote about how they show a still from "weekend at bernie's," but what do we know definitively about how he is

doing and why it took so long to happen? >> there are still conflicting reports. no reporter has set down with sumner for years now. in the meantime, he has missed shareholders meetings, has not been out there public. david: he sounded weird. yeah, so on one hand you had people like philippe dauman say he does not get around so well, but mentally still sharpens attack, able to make his own health care decision, and at the same time you have this other portrait of his health which came out in this lawsuit in los angeles. his former girlfriend filed this lawsuit this past fall in november, and it gave this very grim, dire portrait of not only his physical health, but she alleged that he is not there mentally as well. david: this is a publicly held company. there is a fiduciary responsibility to investors. you wonder how long he has been out of it, and other people have not been talking about it. >> right, so you have had investors, and activist investors came out in january and put this 99-page -- totally laying out the case against viacom, against philippe dauman, saying you can't have sumner the chairman of this company anymore and putting the pressure on.

other investors have joined saying, what we really know about him, so there has been pressure, and this is the first moment where finally he is stepping down as chair. he is still the majority controlling owner of both viacom and cbs, so this is not over yet by any means. david: she has investors agitating for changes. how much is the leadership of viacom -- how much are we going to see a reflection of that leadership change in how viacom is operating and what shape is that company in today? are there plans to change it? felix: there has been a lot of talk for years now. philippe dauman had his first earning call this week, and his reaction sounded like a lot more of the same.

we're selling ad inventory for snapchat. you're listening to that and saying that that is going to cannibalize more of the audience. so it is hard to imagine what will happen, although at this point the share prices dropped so low that you think they would be a good target for acquisition. carol: you point out in the story, and this is a number that stood out, how much philippe dauman has been paid. they have made a lot of money as the share prices gone down. felix: yeah, some people were very upset when his compensation package came out this year, where it turns out he is getting paid a total compensation above $50 million, 20% more than last year while the revenue is down, stocks down, profits down, domestic advertising revenue down, having problem with their affiliate fees and negotiations.

they had this big negotiation with dish looming. there has been trouble on all fronts. yes, it is true that the viewing behavior of young people has changed a lot since mtv and comedy central became these dominant brands. now kids are going on youtube, have all these other options, netflix, but at the same time you look at the company and they have had a decade of a lot of profits to figure out acquisitions. what have they done under philippe dauman? his strategy has been plying profits into share buybacks. carol: people calling it a lost decade. felix: yeah, in the meantime in retrospect it seems like there would have been better ways to use those profits. also, paramount has had a very slim slate of movies, too, so

they have been trying to bulk that up, trying to do tv production in addition to movie production, but that also feels like they are a little bit slow to get into that. carol: such a great -- david: thank you very much. coming up, this week's etc. section in the magazine. carol: we talk about an up-and-coming company and its move to be the patagonia of hunting gear. we have the details when bloomberg tv returns. ♪

carol: for hillary clinton and bernie sanders, the next out of ground will be nevada and south carolina. >> we have got a proven track record of doing what works better, and now we just need another democratic president to build on the successes of these two terms, because otherwise we are just going back to that land of trickle-down economics, one of the worst ideas of the 1980's, along with shoulder pads and big hair and stuff like +that. david: josh and joins us now. talk to us about robby mook, the head of hillary clinton's campaign, a man who has a lot of experience in this day. josh: that's right, in 2008 he was running the clinton campaign in nevada and he fought to

arguably a draw with obama, getting 600 more votes, but the obama campaign got more delegates. robby mook took a community-organized approach that got noticed by the clintons. his elevation to run the whole campaign this time is a vote of confidence in his style, his no-drama style, but also the strategy he approached it with, which now the team that is picking up where he left off in nevada, trying to go the distance against bernie sanders. carol: talk to us about the nuances of nevada and his approach. josh: one of the things is that the person running the campaign this time told me that she looked at in 2008 as an area

where they lost, and that led to them not winning overall, is that delicate mass being different. the delicate mass in nevada means a vote in one precinct is not worth the same amount as one in another on caucus day. the obama campaign how did the clinton campaign in that area, and the clinton campaign has learned from it this time. that is part of why, as i reported the story, you see a real effort from the clinton folks to go outside of the top population centers in the state. you also see them picking up what both the clintons and the obamas did last time, a focus on a volunteer-centered approach, where you just on have volunteers who come in for a night and make phone calls. you have volunteers take a sense of ownership of a particular group of voters, take ownership of tasks and central responsibilities on caucus day,

take ownership of other volunteers, bringing them in and overseeing them, and so a lot of the life and responsibility of the campaign rests with those volunteers, and a lot of work of the staff is about leading and developing those volunteers. carol: josh, thank you for that. we appreciate it. josh: thank you very much. carol: now it is time to take a look at the etc. part of the magazine. for that we bring in brett, who edited the section. david: you have a guy wearing camouflage that i have not seen before, a new brand of hunting gear. brett: the company was started by a guy named jason who spent a little time in the nfl. on weekends he was going on hunting trips and found himself often wearing a lot of name brands, but having to wrap himself in cheap, heavy camouflage.

david: like patagonia with a generic camouflage on top. josh: exactly. he launched the company that he launched with a friend from college. they ended up selling the company and launched the new company. carol: this can't be that big of a market. it is a real sizable market. david: yeah, hunting is huge. there are 50 million people a year who apply for hunting licenses, 50 million people year, and the industry, apparel billion people year, and the industry, apparel and gear, takes in $23 billion a year. it is huge, so there are so many business opportunities. david: these companies have been reluctant to embrace hunting of any stripe really. the market has seen the hunter as overweight and underpaid, and it is a market they haven't wanted to get into.

the hunting gear that was available was really kind of awful. it was not cut for someone who is athletic or who was accustomed to the kind of performance with labels like north face, columbia, patagonia. carol: what is it about the materials they use in their approach? they are coming up with their own camouflage patterns? josh: most camouflage is a license, generic, everyone knows what it looks like, and that's designed to have you blend in with your surroundings, so if you're in a duck blind for instance you don't want ducks to notice you are there. they do the opposite with her pattern. it is patterned on the african wild dog. predators get so confused by its lines and colors that they run away. they don't know what to make of it, and that is the approach that he took with their camouflage. david: the business, in terms of

where it is distributed -- carol: it is different from his first business, right? josh: a jacket that might normally go for $450, goes for about $300, which is expensive for camo gear, but not expensive given what is on the market. carol: thank you so much. that does it for this week's edition of "businessweek" on bloomberg television. i am carol massar. david: i am david gura. the latest stories are online and on newsstands. carol: we'll see you again next week for "businessweek" right here on bloomberg television. ♪

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