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tv   Bloomberg Business Week  Bloomberg  February 14, 2016 12:00pm-12:31pm EST

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>> hello, welcome to business week. i'm carol massar. david: & david corona. -- i'm david gura. fei company is betting hundreds on high end year. retract the profit trail. -- we track the profit trail. ♪ what caught my attention
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had to do with amazon and their request to rule the world. it is an internal report. some people got a hold of it. it really looks like they want to be big in terms of delivery. owning the fulfillment space anti-gun internet globally -- and globally. the canadian is weakest and itsars affect on hockey. causing a lot of problems around the cloak. -- around the globe.
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lots going on. going to talk about crude oil. it is plummeting from its 2014 high. the s&p 500 off to its worst start. david: it appears that oils an stocks have developed an unhealthy relationship. coy has that story. it is a bad time for it to be breaking up. this correlation has got investors confused, peter. peter: we saw an amazing decline in oil. alarm investors and they sold off stocks. an unhealthy, codependent relationship, just in time for
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valentine's day. i think it is overdone. to me, -- carol: the relationship? -- peopleple have should not be responding this way. i don't think the fall in oil is justified. it is overshot. we are at levels now where people can't make money at it done -- and drilling is going away, prices are going to shoot back up again. assumet aside, if you what prices stay down, it doesn't justify the decline in stocks. because people are assuming that if oil goes down, it must be evidence that there is a problem on the demand side of the global economy. -- thatkness in demand will be bad for global growth. it is a sign of global growth that will hurt profits and the
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s&p. have inome of what you your story, you break down the statistics and supply and demand. peter: rather than using less oil, using more. offrom the third quarter 2015, the demand for oil globally went up 3.1 million barrels per day. the only reason the prices down is the supply grew by 5 million barrels a day. low price ofh the oil is a supply problem, not a demand problem. thetalk to investors and banks are worried that they have lent money to these energy companies and they are overextended. is that unfounded in your estimation?
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peter: i am glad you brought it up. added on look at where the real problems are. venezuela, other high-cost energy producing nations. the u.s. isn't loaning money to those nations. loaning -- lending going on to the shale production. says most ofh that those loans will get repaid, even if the companies have to go through bankruptcy to do it. carol: what is interesting is spikesrelation -- oils before a recession -- oil spikes before a recession. about i would be worried a reception because it is quite common for recession to follow a huge increase here here we have
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a cut in the price of oil. people are saving money at the pump. they have more money to spend. and we are worried about a recession? what is going on here is an mark will go below $28 a barrel. people get spooked when that happens. shape that? market peter: it is a psychological factor, but i would counter it -- may be the market are paying attention to -- they are going to the public -- they're going to the pump and seeing prices they have not seen any long time. carol: what about the capital expenditures? an awful lotspent of money. if they are pulling back, you feel that? peter: yeah. be $1reduction in will
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trillion. you have to lay that against the overall spending. by theng those energized oil and can invest more. carol: you are the optimist. [laughter] peter: i am trying to be. can an investor shake this? investorsible to be an and ignore what you are seeing in oil prices. peter: yeah. investor, a long time you want to look through the ups and down to the market. oil giant rates it is the nature of oil. stocks are also volatile. if you are hanging on for the
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long-term, you want to be thinking about the underlying elements of where you are putting your money. day,: on this valentine's time for the love relationship to be over? peter: yes. it is time to break the intimate connection between oil and stocks. peter coy, thank you so much. you can read peter's story in the latest issue of business week located online are on newsstands. david: what is the latest for viacom?
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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 comes where he steps down as chair of cbs and viacom. immediately cbs, no drama, no surprise, les moonves, he is well thought of. he is a ceo elevated to chair. everyone is happy. viacom, totally different story. carol: why is it a different story? >> basically the last year and a half, two years, viacom has been struggling.
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the ratings at their cable nickelodeon, has been falling off a cliff. it is not a diversified business. it is the cable channels, plus paramount pictures. 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, ok, something needs to change. we need new 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, and 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 cannot handle his duties, and then finally this moment comes, everyone is watching, and for the first hour or two look like -- it looked like there was going to be a shakeup because his daughter, sherri redstone, comes out immediately with a
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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 write about a moment in an investor conference where 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. because nobody -- no reporter has sat 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 dumont and his camp say he has job problems, he does not get around to well, but it's still mentally sharp as a tack.
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he is still able to make his own health care decisions. 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. carol: it is amazing if you think about regulators. this is a publicly held company. there is a fiduciary responsibility to investors. you wonder how long may be, he has been out of it, and other people have not been talking about it. >> right, so you have had activists --d activist investors came out in january asset management, and put this 99 page -- totally laying out the case against viacom, against philippe dauman,
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saying you cannot have sumner as chairman of this company anymore and putting the pressure on. other investors have joined in and saying, what do 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: you have 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? comedy central is not what it is, mtv is not what it is. are there plans to change it? >> i mean there has been a lot , of talk for years now. philippe dauman had his first earning call this week, and his -- earnings call this week, aunt his reaction sounded like a lot more of the same. we're doing some stuff with snapchat, we are selling ad
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inventory. we have new channels. you're listening to that and saying that that is going to cannibalize more of the audience. carol: this does not turn the boat around? >> yes. 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: it is funny that you bring that up, because 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 price has gone down. david: just crushed. >> 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 stock price -- revenue has been down, profits have been down. domestic advertising revenue has
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been down. they are having problem with their affiliate fees and negotiations. they had this big negotiation with dish looming. there has been trouble on all fronts. yes, in part, 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 plowing profits into share buybacks. david: people calling it a lost decade. >> yeah, in the meantime in retrospect it seems like there would have been better ways to use those profits. and also at the same time, , paramount has had a very slim slate of movies, too, so they have been trying to bulk that
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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. david: such a great piece. thank you so much. carol: you said the state because there will be more to come. david: coming up, this week's etc. section in the magazine. carol: you bet. 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. ♪
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♪ carol: for hillary clinton and
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bernie sanders, the next out of -- battleground will be nevada and south carolina. david: we have hillary appearing at a town hall in august. ms. clinton: 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. [laughter] david: josh joins us now with conversation about this campaign. talk to us about robby mook, the head of hillary clinton's campaign, a man who has a lot of experience in this day. -- in this state, in specific.
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josh that's right, in 2008 he : was running the clinton campaign in nevada and he fought to arguably a draw with obama, ites. 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 to nevada ended on his approach and why it works. josh: one of the things is that the person running the campaign
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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 -- delegate mass being different. the delegate 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 show their presence 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 joe -- where you don't just 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
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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. >> thank you very much. carol: now it is time to take a look at the etc. part of the magazine. it is the back of the book stories in bloomberg businessweek. for that we bring in brett, who edited the section. david: speaking of the cover story, you have a guy wearing camouflage that i have not seen before, a new brand of hunting gear. >> 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
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generic camouflage on top. >> exactly. >> after a while he thought he could do better. he launched the company that he launched with a friend from college. they ended up selling the company and launched the new company. carol: i have to be honest. when i read about it, i thought it couldn't be this big a market. but it it is a real sizable market. >> yeah, hunting is huge. there are 50 million people a year who apply for hunting licenses, 50 million people year. and the industry, apparel and gear, takes in $23 billion a year. it's huge. certainly business opportunities there. david: any of these companies, who 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. there really was an opening there. the hunting gear that was
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available was really kind of awful. it was not cut for someone who is athletic, or who was accustomed to the kind of performance where that we are, with labels like north face, columbia, patagonia. carol: or lululemon for yoga. i feel like that is what they are doing for hunting gear. what is it about the materials they use in their approach? they are coming up with their own camouflage patterns? >> 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. [laughter] they do the opposite with her -- with their 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: how are they doing in the business, in terms of where it
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is distributed? how big of a business is right now? >> it is completely online . carol: and that it is different from his first business, right? >> very different. 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: help to getting some insight on what is going on. we'll see you again next week for "businessweek" right here on bloomberg television. ♪
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♪ narrator: our world today is wealthier than ever. but not everyone shares in this wealth. today's young business leaders are challenging this, changing the way we think about money, its power and its purpose. this is a new generation. this is the new philanthropy. ♪ announcer: alejandro legorreta is one of mexico's st

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