TikTok’s future is in limbo thanks to a law signed by President Joe Biden in April, which stipulates the video app will be banned over national security concerns if ByteDance doesn’t sell it to an American buyer. — AP
Even as TikTok faces a looming ban in the US, Chinese parent company ByteDance Ltd has made it clear it has no plans to sell the popular video app. Frank McCourt doesn’t seem deterred.
A real estate mogul and former owner of the Los Angeles Dodgers, McCourt has emerged as a loud and unexpected suitor for the video app, which could be shut down as soon as Jan 19. He and his team have already spoken with more than 60 elected officials and policymakers about his bid, and held conversations with members of President-elect Donald Trump’s transition team to make his case for a possible deal, he said this month in an interview with Bloomberg.
They’re even recruiting possible chief executive officers, and have reached out to former TikTok Chief Operating Officer V. Pappas, according to people familiar with the matter. While Pappas stepped down from their job last year, the hope is that attaching a CEO to the project may make it more enticing to Trump. A spokesperson for Project Liberty declined to comment on any CEO search.
While McCourt doesn’t have the estimated US$25bil (RM113.75bil) he believes it will take to buy the app – his net worth is US$2.4bil (RM10.82bil), according to the Bloomberg Billionaires Index – he recently held fundraising meetings in New York and San Francisco to help shore up potential banking partners. "Capital is not the issue here,” McCourt said.
Most importantly, perhaps: McCourt has a relationship with the President-elect, who he met through the real estate industry. Trump has said on several occasions that he’d like to avoid the potential ban, which could mean arranging for a buyer instead.
"He and I know one another,” McCourt said on a visit to Bloomberg’s offices last week, though he added he hasn’t spoken to Trump directly about a bid. "I take people at face value. When he says he doesn’t want to see it banned, we don’t want to see it banned either, and that to me means a transaction, a deal of some kind. And we have a solution.” A spokesperson for Trump did not respond to a request for comment.
TikTok’s future is in limbo thanks to a law signed by President Joe Biden in April, which stipulates the video app will be banned over national security concerns if ByteDance doesn’t sell it to an American buyer. Beijing’s export rules prevent Chinese companies from selling their software algorithms, like the one central to TikTok’s explosive success, and ByteDance has said it will not sell the app. Even if it wanted to, some of the most obvious buyers – including Meta Platforms Inc and Alphabet Inc’s Google – are facing their own legal issues over alleged monopolistic behaviour that would almost certainly preclude them from making a deal.
Instead, TikTok and ByteDance are fighting the law in court. After the companies’ unsuccessful push to have a federal appeals court in Washington overturn the measure, they asked the US Supreme Court to review the case. The high court this week agreed to hear TikTok’s challenge to the law on January 10, nine days before the ban is slated to take effect. It’s a last ditch effort, and Bloomberg Intelligence analysts give TikTok just a 30% chance of avoiding a ban. But as ByteDance runs out of legal options, it could become more inclined to find a buyer.
McCourt hopes to be that white knight. His pitch to purchase TikTok could draw interest because he doesn’t want the app’s forbidden algorithm. Instead, McCourt thinks he can create a better system more akin to some of the decentralised platforms that have started to surface, like Bluesky. Those apps aim to let users choose from a multitude of different feeds and grant them more control over their data and, most importantly, their list of followers.
"You would be buying the app and the face of the platform; you wouldn’t be buying the ‘guts’ – the algorithm – that’s the key,” McCourt said. This idea to give social media users more agency has been in the works since 2021, when McCourt launched Project Liberty, then a US$100mil (RM453.6mil) initiative based on the notion that social media companies are too powerful and controlling of users’ data. His plan for "TikTok 2.0,” as he referred to it, is to move TikTok’s users and content to a different, American-made network of servers that Project Liberty has been building.
The plan is far from finalised and McCourt faces considerable obstacles to a possible deal. While he said he has interest from many of ByteDance’s American shareholders to broker the bid, he still hasn’t made inroads with ByteDance executives despite efforts to strike up negotiations. He’s also missing endorsements from key American investors like Jeff Yass, co-founder of Susquehanna International Group, who owns one of the largest stakes in ByteDance and is a major Trump supporter. (McCourt said he hopes to speak with Yass soon.)
If ByteDance does choose to sell, he’ll also likely face competition from other suitors, perhaps some with much deeper pockets. When TikTok was almost sold during a similar divest-or-ban situation back in 2020 under then-President Trump, it received serious interest from several major tech companies, including Microsoft Corp. and Oracle Corp.
Amazon.com Inc has been floated as a possible suitor this time around, and other high-profile individuals like former Activision Blizzard CEO Bobby Kotick and former US Treasury Secretary Steven Mnuchin have been reported as possible buyers. Oracle is also a major data storage partner for TikTok’s US operations, which could put them at the centre of any realistic bid for the company.
In the meantime, McCourt is hoping to garner support from several other constituencies, and said he’s finding an enthusiastic audience in Washington for his proposal. His group has spoken to House and Senate lawmakers on both sides of the aisle, he said, including members of the Select Committee on the Chinese Communist Party.
McCourt even hosted a recent dinner in Malibu, California, where he pitched Project Liberty and TikTok 2.0 to 20 of the app’s largest influencers, a group that boasted more than 100 million followers combined.
Content creators often say one of their biggest qualms with social media is that they’re subject to the whims of the powerful platforms, which can boost or suppress posts with little rhyme or reason. These systems also typically prevent influencers from carrying their enormous, hard-earned followings from one app to another. "When we explained to them that in a new version of TikTok on our stack they would actually own their relationships that they built,” McCourt said, "they got very excited about that.”
Whether McCourt actually succeeds is ultimately outside of his control. ByteDance may choose to let the US government shut TikTok down rather than sell its prized asset under duress. While Trump has suggested he’d somehow save TikTok and even met with TikTok CEO Shou Chew at Mar-a-Lago this week, his appetite for protecting the platform could also wane once he gets into office and learns more about the classified information that swayed many members of Congress to pass the law to begin with.
Even so, McCourt believes he’s sitting on the solution that solves everybody’s problem. "China wins because they’re not selling the algorithm. Shareholders win because they’re getting some value for the US platform. User base wins, obviously,” he said. "Trump wins with fulfilling a commitment. And American citizens win.” – Bloomberg
