Major Overhaul of TikTok's Business Model by Frank McCourt

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.

Proposed Changes

McCourt's vision for TikTok includes:
– Transforming the advertising model: Users would gain control over the ads and the type of content they wish to see.
– Long-term revenue generation: TikTok could earn through ecommerce and licensing data for artificial intelligence training models, provided users 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."

Challenges Ahead

The plan faces challenges:
– TikTok's statement that it cannot be separated from its owner, ByteDance.
– The exclusion of the algorithm that determines content, which complicates matters.
– The Chinese government considers content recommendation algorithms as sensitive and added them to its export-control list. A sale of TikTok's algorithm would need to go through administrative licensing procedures.

Legal Context

TikTok's appeal to the Supreme Court is a last-ditch effort to overturn a law signed by U.S. President Joe Biden that aims to force a sale due to national security concerns, or 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 preparing for the acquisition process.

Engagement with Trump Administration

McCourt and his team have had preliminary conversations with members of President-elect Donald Trump's incoming administration. Trump had tried 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 the request for comment.

Additionally, McCourt's team is seeking potential CEO candidates for the new TikTok.

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