‘Why I’m trying to buy TikTok’

Note: Transcripts are automatically generated from episode audio, and are not fully corrected for spelling, grammar, and formatting.

FRANK McCOURT: I don’t know for sure whether TikTok is going to be sold. I don’t know for sure that we’ll be the successful bidder if it is. We met early on with the top influencers on TikTok and top creators — 20 of them who touch over a hundred million people. We had dinner with them in Malibu, California. They’re frustrated with TikTok because they’re subject to a black box. So they’re very concerned about a TikTok platform where they can build community, not just create content. What can be created there with different algorithms, which respect the individuals, I think will be fantastic.

BOB SAFIAN: That’s Frank McCourt, executive chairman of McCourt Global and the former owner of Major League Baseball’s Los Angeles Dodgers. I wanted to talk to Frank because next week, TikTok’s parent company, ByteDance, will be in court trying to block U.S. legislation that would force TikTok to be shuttered or sold. The first entity lining up to buy TikTok’s U.S. operations is a group led by Frank McCourt.

McCourt’s plan for TikTok revolves around internet safety and data privacy — a launchpad for what he calls a “new internet,” which he’s already invested close to half a billion dollars trying to create. McCourt takes us inside the story of his TikTok bid, mouths off about why he’s done hearing Mark Zuckerberg play the victim, and more. Plus, we talk about the state of the sports business and why he bought a French soccer team instead of an NFL franchise. Everything’s on the table, so let’s get into it. I’m Bob Safian, and this is Rapid Response.

I’m Bob Safian, and I’m here with Frank McCourt, executive chairman of McCourt Global, founder of the nonprofit Project Liberty, and owner of France’s Marseille Football Club. Frank, thanks for joining us. Good to see you.

McCOURT: Yeah, good to see you too, Bob. It’s nice to be with you.

Copy LinkDoes TikTok pose a national security risk?

SAFIAN: So what I want to start with today is TikTok. Next week, a U.S. appeals court is slated to hear arguments on a law that would ban TikTok here in the U.S. There’s fear that TikTok enables the Chinese government to spread propaganda and essentially spy on U.S. citizens. You’ve stepped up to say you’d buy TikTok, even without the algorithm that’s driven its success. But before we get into that, do you think TikTok in its current form poses a national security risk?

McCOURT: Yeah, absolutely. It does. I have the privilege of seeing most of the briefing that was shared with Congress before the legislation was quickly passed. Look, Bob, I’ve been working on this for over 10 years, and I didn’t think I could be more alarmed than I was when I saw that briefing. It’s massive surveillance technology. Our own American platforms are essentially doing the same thing. The difference here, of course, is that this is a Chinese platform controlled by a government that is not pro-democracy. We now know that a vast majority of young people get their news, not just entertainment, from TikTok. This is the greatest piece of propaganda machinery ever built. When you see how sophisticated it is in dialing up things the Chinese government would like young people to believe and dialing down things they don’t want them to believe, it’s quite alarming actually. So there’s no doubt in my mind that it’s a national security threat. I think the more core issue, however, is do we really want to live in a world where this awesome internet technology, which can do great things, is designed in such a way that it’s surveilling us, scraping our data? Do we really want to be manipulated by a few companies? I, for one, do not. I think it’s crazy we’ve gotten to this point, but here we are, and it’s beyond time that we address it.

Copy LinkNational security vs free speech in the TikTok battle

SAFIAN: The facts, as you describe them, against TikTok make it sound like the legal case is sort of a no-brainer, like it’ll be a slam dunk. How closely are you following this legal case? Is there still doubt about it?

McCOURT: We’re watching it very closely. The case is about the legislation that was passed, and ByteDance is making a First Amendment argument — an argument around free speech. And by the way, we’ve heard this argument from all the big tech platforms; they hide behind this free speech veil. Free speech does not give you the right to surveil people, steal their data, and manipulate them. But we think the government will prevail on this lawsuit. But there’s another part of this whole TikTok saga, and that is a ruling that is non-appealable, that gives the current administration the power to shut down TikTok or force it to divest right now. The legislation was just belt and suspenders. When all our national security agencies come forward with findings that something — in this case, TikTok — is a national security threat, there is an ability to force the company to divest the asset or to shut it down. That’s the case here with TikTok. The legislation is a bit of a sideshow. Nice to have, but not necessary. But nonetheless, we’re watching it closely because I think this is the biggest issue of our age—not just TikTok, but the fact that we’ve now become slaves to this technology rather than being masters of it.

Copy LinkEngineering a permission-based TikTok

SAFIAN: Your background is in real estate development. You owned the LA Dodgers, renovated Dodger Stadium — very tangible assets. And then several years back, you began focusing more on the digital world, launching Project Liberty as a way to impact digital governance. What prompted this focus in digital and the internet as it has evolved?

McCOURT: Really, at the core, Bob, I’m a builder, right? My family’s been building — now it’s very large-scale infrastructure, but it started very modestly when my great-grandfather started building roads when Henry Ford started building cars. We’ve been at it for over 130 years, designing and building infrastructure. And the internet is a piece of infrastructure, and we have an engineering problem here, and engineering problems can be fixed. I was able to see a bit during my LA days how social media was actually becoming weaponized.

After selling the Dodgers, I thought the way forward here vis-a-vis big tech would be to get the policymaking apparatus out in front of this set of problems. I helped start a new public policy school in Washington, D.C., with Georgetown University. But I learned very quickly — and sadly — that the policymaking apparatus and policymakers were no match for big tech in terms of either the power, speed, agility, influence, etc.

So, it was after that finding that I shifted my focus to the engineering aspect and the infrastructure, asking, “How can you fix the internet so that it works in a way that was originally intended?” It was intended as a decentralized piece of technology to connect us all, make us smarter, and advance civilization. It was basically co-opted and colonized by a few companies that took control of this data, centralized it, and, in my view, and the view of many others who’ve joined Project Liberty, this is wrong. Our data is our personhood in the digital age. We should own our personhood. You should own your virtual you, and I should own my virtual me. So we need to fix this.

SAFIAN: The solution is to acquire TikTok to make it the basis for that?

McCOURT: I mentioned I shifted my focus and assembled a team of brilliant technologists and software coders to grapple with this problem. They came forward with what I thought was a brilliant insight: if a core internet protocol, open-source, was created and adopted at scale, the power dynamic would be flipped. We, as individuals, would decide who gets to use our data and which portions of it for what purpose. It would be a permission-based internet where our data is, of course, shared. There’s value in big data; we want to get smarter and value from all this, but do it on a permission basis. So, rather than a third party surveilling you and me, scraping our data, why not you and I permission the use of our data for trusted applications.

SAFIAN: And get compensated for it?

McCOURT: And maybe even get compensated for it if there’s value. So we went to work on that, and it’s called Project Liberty. We’ve built the tech. We have over a million people now using DSNP. And when this TikTok opportunity came up, we thought it was a gift from heaven — an opportunity to migrate 170 million people to this alternative internet. A million people is not the scale necessary to have an alternative internet; 170 million people are. TikTok was not originally in the plan. The opportunity presented itself, and that’s why in May, on behalf of Project Liberty, I announced that we would make the people’s bid for TikTok. Our goal is to speed up the creation of this alternative and really start regaining control of our digital lives.

SAFIAN: As a TikTok user, would I access the internet through whatever you renamed TikTok, and would that protect my identity when I was everywhere else? But TikTok itself wouldn’t perform the same kind of function it does for users now?

McCOURT: It would actually be very similar from a user experience perspective. There will be algorithms involved and possibly advertising involved, but all done with transparency, agency, and permission. Value will be shared with the users who are actually creating the data and content. So, the user experience will be very similar.

Copy LinkHow the TikTok algorithm would change

SAFIAN: If you acquired TikTok without its algorithm that ByteDance owns, you get access to these millions of users but wouldn’t it be kind of a hollowed-out version of the experience for those users?

McCOURT: No, as I said earlier, there will be algorithms, and there will probably be multiple. People will be able to curate how they interact with them.

SAFIAN: But not the same algorithms that have driven TikTok’s success to this point?

McCOURT: Yeah, and we met early on with the top influencers on TikTok and top creators — 20 of them who touch over a hundred million of the 170 million people. We had dinner with them in Malibu, California. I was very curious to hear from them about how they were reacting to our bid. It was interesting because they were very excited because they’re frustrated with TikTok. They’re building community, but they don’t know who it is. They have no visibility. When they put a piece of content out and there’s a big reaction, they don’t know why. When they put another piece out, there’s no reaction to it. They’re subject to a black box. They’re very interested in a TikTok platform where they can build community, not just create content.

There’s a saying, Bob, in technology: big data, small algorithm will beat big algorithm, small data any day. So, the 170 million users, what can be created there with different algorithms, which respect individuals, I think will be fantastic.

SAFIAN: Frank may not have grown up as a techie, but he’s sure digging into the guts of the tech world now. With TikTok, he’s being opportunistic — locking into a vulnerable asset and hoping he can make a deal. When we come back, we’ll talk about his plan if that deal doesn’t materialize — plus why tech leaders like Mark Zuckerberg are just playing the victim, and more. Stay with us.

[AD BREAK]

Before the break, Frank McCourt shared the story behind his bid to buy TikTok. Now, Frank explains why not being a social media user himself gives him a valuable perspective, what he plans to do if the TikTok purchase falls through, and more. Plus, his take on today’s sports business and why he thinks European soccer has a brighter future than American football. Let’s dive back in.

Copy LinkUnderstanding TikTok without using it

I’m curious, do you use TikTok personally? Are there social platforms that you use more or less?

McCOURT: From day one, I felt this was a lousy deal — give up all my data, all my information for what? A free app. So I have abstained from social media from day one.

SAFIAN: People might wonder, can you really understand the social media platform and what it is if you haven’t used it yourself? If you’re not as personally familiar with it?

McCOURT: I think it’s definitely a valid question and concern, for sure. But if hardcore social media users or technologists or computer scientists were going to fix this problem, wouldn’t they have by now? Am I telling you something in this conversation that you don’t already know? For me, I think there’s a benefit in having an outsider’s perspective. If the CEOs of these tech companies were going to change, I think we would have seen that by now. If our elected officials were going to get ahead of this problem, we would have seen that occur already.

This is way, way, way bigger than just a conversation about algorithms or protocols. This is about how we want this awesome, powerful technology to be used to make people’s lives better. This is a crisis. We need to start treating it like that and not be fooled by these arguments that everything’s fine, this is just a First Amendment issue, and this and that. Really? Mark Zuckerberg is now a victim? He’s a victim of the Biden administration’s pressure? Mark Zuckerberg is a victim? That’s where we’re at here? How many more pieces of testimony do we need to hear? How many more whistleblowers do we need to hear? And we’re constantly being deflected over the margins by people who don’t want us to deal with the issue at its core.

Copy LinkBetting on TikTok U.S. being sold

SAFIAN: It sounds like TikTok presented itself as a potential way to accelerate the movement you’re advocating. If you can’t acquire TikTok, are you already looking for another vehicle to accelerate things, or is it sort of a case where either TikTok works or you go back to more basic blocking and tackling that you were doing prior?

McCOURT: Yeah, well, we continue to do the blocking and tackling. We’re betting that, ultimately, TikTok will not be shut down and it will be sold. I’m talking about U.S. TikTok. We might be wrong, but that’s what we’re betting on. There are a lot of investors in TikTok that would like to see some future value derived from TikTok U.S., rather than it being shut down. There are 170 million Americans who enjoy using it. We want to see it continue as well.

Now, at the same time, I don’t know for sure whether TikTok is going to be sold. I don’t know for sure that we’ll be the successful bidder if it is. So, we continue to do the work that needs to be done to go ahead and create this alternative internet. I’ve committed half a billion dollars to help seed the effort and make it happen because I’m concerned. I’m concerned about our business that’s been going on for 131 years, which I don’t think will survive if democracy fails. I have seven children—four grown boys who are pre the big harms of social media, but I have three young ones who are now approaching this.

And this is a really serious thing. Once you see a problem, you can’t unsee it. I think we’re doing good work, and if someone is doing better work than us, we’re going to embrace that work. This isn’t about being right; it’s about getting it right, and then we’ll get back to our core businesses.

Copy LinkHow the sports business is massively shifting

SAFIAN: We’ve talked a lot about tech and how the business is changing. I’m curious about your perspective on the sports business — the valuation of franchises going up, women’s sports having a moment, the size of TV deals soaring. Do you have a vision for where we are at this moment in the sports business and where it’s moving in culture?

McCOURT: I do have some perspective on that. One trend is media rights exploding, and that’s what drives the value of these leagues and teams. At the same time, we see massive cord-cutting going on. So, the media platforms that were cable TV dependent are evaporating. Some sports are more affected by that than others. It’s unclear how it’s going to play out, but there definitely will be winners and losers.

Then you also have, there’s also a massive shift in how college athletics is playing out. Now we’re seeing college athletes, and it’s very unclear how all that’s going to work itself out. The idea of higher education, educating the next generation and creating leaders for the future, is a different mission from paying athletes.

SAFIAN: Running a sports business.

McCOURT: Exactly. How is that going to work out, and how is that going to change the whole landscape? When the money starts infiltrating an academic environment, I think there’s going to be fallout. The last thing I’ll mention is, and this is a bit of a plug, but I believe that football (soccer), what’s called European football, is the sport of the future.

SAFIAN: This is why you invested in a European football team, a soccer team, rather than trying for an NFL team?

McCOURT: Yeah, that’s correct. I was actually not that anxious to buy another club because they’re very emotionally draining if you put everything into it. If you’re a fan yourself and you really invest, it’s a lot. Eight or nine years for me with the Dodgers was such a privilege. The thought of owning a professional team, never mind one of the Dodgers’ stature, was kind of like every boy’s dream come true. But it wasn’t until I was asked to take the reins at Marseille that I really perked up because it’s a global sport, and it was one of those once-in-a-lifetime opportunities. So, I decided to do it, and it’s been eye-opening and fun, nerve-wracking, but a privilege.

SAFIAN: This has been great, and thanks so much for doing it. It’s really great to chat with you.

McCOURT: Appreciate you taking the time to do this.

SAFIAN: Listening to Frank, I’m struck by how eclectic he is as a business person. He’s got passion for the technology world and how it’s developing, and he’s also passionate about sports, specifically European soccer. Now, that doesn’t mean his take on all these areas is necessarily right all the time, but the breadth of his interests is a valuable asset in a world that’s changing and shifting so much. As for TikTok, I’ve mostly thought the noise around its Chinese ownership was mostly political posturing, but increasingly, I’m not so sure. I’m a big believer in free speech and the First Amendment, but that doesn’t mean there isn’t responsibility and that safeguards shouldn’t be in place. Whether we’re talking about TikTok, AI, or the presidential campaign, we want to have structures that encourage us to be our better selves. That’s a goal I hope we all can agree on. I’m Bob Safian. Thanks for listening.