McCourt, a longtime critic of the way tech companies use data, sees acquiring TikTok as a chance to create an ‘alternative to the current Internet’. — The New York Times
Ever since Congress passed a bill that would force Chinese company ByteDance to sell or shut down TikTok, one of the biggest questions has been: Who could buy it, given technological, political and financial considerations?
Billionaire Frank McCourt has put up his hand.
McCourt said Wednesday that he was working to put together a group of bidders to buy the social media app. His goal in doing so is to rethink how TikTok, and the internet overall, use data and consider privacy. He is already in discussions about the app with academics and those who study the impact of technology like Jonathan Haidt, whose book The Anxious Generation, on how smartphones have affected the mental health of adolescents, has been on bestseller lists for more than a month.
McCourt, a former owner of the Los Angeles Dodgers who made his fortune in real estate, has long been interested in the role of technology and society. He has been on a crusade to remake the Internet and wrest control of user data from tech giants like Facebook and TikTok, establishing an initiative called Project Liberty in 2021 to focus on those efforts.
“This seemed like a great opportunity to actually create the alternative to the current internet, which has been colonised by large platforms and including TikTok,” McCourt said in an interview. He said the deal could help users “control their identity, own and control their data”.
Whether ByteDance can find a buyer for TikTok will be crucial for determining its fate: If it cannot, if may be forced to shut down in the United States. But a sale of TikTok would be enormously expensive, limiting its pool of buyers. That’s because most large technology companies would likely face antitrust scrutiny if they tried to acquire the app.
Those challenges haven’t entirely crimped interest in one of the world’s most popular social media applications. Steven Mnuchin, a former Treasury secretary, made headlines in March for saying he was “trying to put together a group to buy TikTok, because they should be owned by US businesses”. TikTok’s US investors include the Susquehanna Investment Group and General Atlantic.
McCourt’s bid is still in its early stages. He did not list everyone with whom he has discussed the purchase or explain where he might source capital for the offer.
There are still plenty of questions about what a TikTok sale might look like. The Chinese government has the power to prevent the sale of TikTok’s valuable algorithm, and the operations between TikTok’s US business and those of ByteDance may also be difficult to pry apart. Given that uncertainty, McCourt said it was too soon to discuss a potential valuation. But he is interested in TikTok without its video recommendation technology, and he has already brought on financial advisers at the investment bank Guggenheim Securities and legal advisers at the law firm Kirkland & Ellis.
“We doubt very much that China would sell TikTok with the algorithm,” McCourt said. “We’re the one bidder that doesn’t want the algorithm because we’re talking about a different architecture, a different way of thinking about the Internet and how it operates.”
He said there was value in TikTok’s huge user base, its content, the brand and “a lot of technology short of the algorithm”.
In April, President Joe Biden signed the new law, which moved through Congress rapidly after a nearly yearlong process behind closed doors. Lawmakers and intelligence officials have expressed escalating concerns that TikTok poses a threat to national security. The company sued the federal government last week and is paying for a separate legal challenge from TikTok creators saying that it has spent billions to address security concerns and that the law violates the First Amendment. – The New York Times
