Billionaire McCourt plans TikTok overhaul with $20 billion bid

Investing.com -- U.S. billionaire businessman Frank McCourt is planning a major overhaul of TikTok's business model as part of a bid for the Chinese-owned short-form video app. McCourt, who previously owned the Los Angeles Dodgers baseball team, has received verbal commitments totaling $20 billion from a consortium of investors. The aim is to rescue TikTok from legal uncertainty as it awaits a Supreme Court decision that will determine if it must sell its U.S. operations.

McCourt's vision for TikTok involves a transformation of the company's advertising model. Users would gain control over the ads and the type of content they wish to see. In the long run, TikTok could generate revenue through ecommerce and licensing data for artificial intelligence training models, provided users give their consent. This would reduce the company's dependence on advertising.

McCourt stated this week, "When you give permission for your data to be used and you receive compensation, it's flipping this 180 degrees and giving the user the power."

However, the plan faces several challenges, including TikTok's repeated statements that it cannot be separated from its owner, Chinese tech firm ByteDance. McCourt's bid for TikTok would exclude the algorithm that determines the content that users see, aiming to simplify matters for ByteDance. In 2020, the Chinese government added content recommendation algorithms to its export-control list. This means that a divestiture or sale of TikTok's algorithm would need to go through its administrative licensing procedures.

TikTok's appeal to the Supreme Court is a last-ditch attempt to overturn a law signed by U.S. President Joe Biden. This law aims to force a sale due to national security concerns, or else the app will be banned on Jan. 19. McCourt believes the Supreme Court will uphold the law, making ByteDance potentially open to negotiations. Meanwhile, he is concentrating on paving the way for an acquisition.

McCourt and his team have had "preliminary conversations" with members of President-elect Donald Trump's incoming administration. Trump attempted to ban TikTok in 2020, but reversed his stance on Dec. 16, expressing fondness for the app. A spokesperson for Trump did not respond to a request for comment.

McCourt also revealed that his team is in talks with potential CEO candidates for the new TikTok.

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Source: Investing.com