By Sheila Dang and Krystal Hu
(Reuters) – U.S. billionaire businessman Frank McCourt is undertaking a fundamental overhaul of TikTok’s business model as part of a plan to bid for the Chinese-owned short video app, he told Reuters.
McCourt, who previously owned the Los Angeles Dodgers baseball team, said he has received verbal funding commitments totaling $20 billion from a consortium of investors to rescue the app from legal purgatory, pending a Supreme Court decision to to determine whether it will be forced to sell. its American activities.
His vision for TikTok includes revamping the company’s advertising model, giving users control over the ads and the type of content they want to see. Over time, TikTok could generate revenue through e-commerce and license data for artificial intelligence training models – with users’ consent – reducing the company’s dependence on advertising.
“If you consent to your data being used and you receive compensation for it, you are turning things around 180 degrees and giving the user the power,” McCourt said this week.
The plan faces several hurdles, including TikTok’s repeated claims that it cannot be divested from its owner, Chinese tech company ByteDance.
McCourt said the TikTok bid would exclude the algorithm that determines the content users see to reduce complications for ByteDance. The Chinese government added content recommendation algorithms to its export control list in 2020, requiring a divestiture or sale of the TikTok algorithm to go through administrative licensing procedures.
TikTok’s appeal to the Supreme Court is a last-ditch effort to overturn a law signed by US President Joe Biden that seeks to force a sale over national security concerns or face a ban on the app on January 19.
McCourt said he believes the Supreme Court will uphold the law, after which ByteDance could be open to negotiations. Until then, he is focusing on paving the way to a takeover.
McCourt said he and his team have had “preliminary discussions” with members of President-elect Donald Trump’s new administration. Trump tried to ban TikTok in 2020, but has since changed his mind, saying on December 16 that he has “a warm place in my heart for TikTok.”
A Trump spokesperson did not respond to a request for comment.
The team is also speaking to potential CEO candidates for the new TikTok, McCourt said.
A source familiar with the matter said the team approached V. Pappas, TikTok’s former chief operating officer. Pappas did not respond to a request for comment. McCourt declined to name who he is speaking to for the CEO role.
The plan for TikTok also includes migrating the technology to an open-source protocol developed by Project Liberty, an organization founded by McCourt. The protocol would allow users to manage their data and easily move it elsewhere on the Internet. The plan affects the search for a CEO.
“This is both a big project to scale the technology we’ve built, but it’s also a vision for a better internet. We’re talking to people who share that vision and have the capacity and skills to do both,” says McCourt. said.
