Frank McCourt, the billionaire who wants to buy TikTok, says the path to a sale is murky because 'we don't know what ByteDance is selling'NEWS | 15 December 2024Billionaire businessman Frank McCourt has made a $20 billion bid to buy TikTok without its algorithm.
He told Business Insider the path toward a sale is murky since ByteDance isn't entertaining talks.
TikTok has vowed to appeal to the Supreme Court to stop its looming ban in US app stores.
Frank McCourt, the billionaire businessman who wants to buy TikTok, told Business Insider that, despite a Friday court ruling allowing the TikTok ban's looming January 19 deadline to proceed if the company isn't sold, the path to a sale remains unclear because "we don't know what ByteDance is selling."
McCourt is among a small handful of investors, including former treasury secretary Steven Mnuchin and the former chief executive of Activision, Bobby Kotick, who've publicly said they want to buy TikTok.
Through Project Liberty, McCourt, the former Dodger's owner and real estate developer, has put together a bid worth over $20 billion to purchase TikTok and usher in what he calls the dawn of an "alternative, upgraded internet" that allows users more control of their own personal data. Project Liberty includes both a for-profit entity and a nonprofit institution.
However, he said, "It's very, very difficult to have precision" regarding the specifics of a potential sale because "let's be clear, we don't know what ByteDance is selling."
ByteDance, TikTok's China-based parent company, has so far refused to entertain talks over a potential sale, McCourt said.
The company's apparent reluctance to negotiate comes despite a December 6 court ruling upholding a law that requires the app be banned from the US in January if it is not sold to a non-Chinese entity. The divest-or-ban legislation aimed to address years of concerns from critics that the influential short-form video social media app could be used as a propaganda tool for the Chinese Communist Party.
On Friday, Reuters reported that the US Court of Appeals for the District of Columbia denied TikTok's emergency bid to stop the ban from taking effect on January 19.
When reached by Business Insider, a TikTok spokesperson declined to comment on the terms of any potential sale, instead saying the company plans on appealing the case to the Supreme Court under the grounds that a potential ban is a violation of the First Amendment right to free speech.
"The voices of over 170 million Americans here in the US and around the world will be silenced on January 19th, 2025 unless the TikTok ban is halted," the TikTok spokesperson said.
Representatives for ByteDance did not respond to a request for comment from Business Insider.
Just because they're not talking about the specifics of a deal "doesn't mean they won't eventually come to that," McCourt said.
And when ByteDance is ready to talk, so is he, he said.
McCourt's TikTok purchase project, which he calls " The People's Bid " has secured the backing of Guggenheim Securities, an investment banking firm, and Kirkland & Ellis, one of the world's largest law firms.
Rather than recreate the app's algorithm and continue business as it currently operates, McCourt hopes to acquire and use TikTok as a large-scale example of a decentralized social media app that allows users more control over their personal data.
"Imagine you're signing on to the internet. You don't have 50 passwords. You're not the IP address of a device anymore — you're actually a person on the internet, and you have the IP address, so when you sign on the internet, you have access to all the apps that are built on the same core-level protocol," McCourt said. "Now imagine all your data is yours, and you permission its use, so the apps that are built in this new world are clicking on your terms and conditions of use for your data."
The momentum behind decentralized social media — and the internet more broadly — has, in recent years, been gaining steam. Jack Dorsey, the founder of Twitter, says he is partially to blame for helping to "centralize" the internet and that he regrets it. He's since shifted his focus to building decentralized tech solutions.
Others, such as Chelsea Manning , the former Army intelligence analyst sentenced to 35 years in prison over her 2010 leak of classified government information, publicly promote decentralized security solutions to enhance user privacy amid concerns about cyber surveillance.
While some users are increasingly interested in decentralized social media, it is difficult for new sites to break through the centralized landscape and siphon off enough users from giants like Meta and Elon Musk's X to get to scale.
Smaller platforms often fail to achieve the positive feedback loop known as the network effect, which entices new users to join based on the positive experience of the existing user base.
If McCourt is able to acquire TikTok, the platform's existing 170 million users would come with the brand — and he's not worried that ByteDance has reportedly shut down any talks of selling the app's signature algorithm, declaring it integral to its internal operations; he wouldn't want to buy it if it did.
"There'd probably be more buyers if the algorithm was available, or at least more buyers kicking the tires," McCourt said. "But we don't want the algorithm. If someone offered TikTok to me with the algorithm, I wouldn't take it because I'm against the architecture, the design that preys on people and takes advantage of people. I think it's incongruent with our democratic principles."Author: Katherine Tangalakis-Lippert. Source
