WEBVTT - Frank McCourt Talks Buying Tik Tok

0:00:02.520 --> 0:00:07.000
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio News.

0:00:07.840 --> 0:00:11.320
<v Speaker 2>Welcome our Bloomberg Television and Radio audience as we continue

0:00:11.320 --> 0:00:13.920
<v Speaker 2>to discuss TikTok's future in America with the man who

0:00:13.920 --> 0:00:16.280
<v Speaker 2>wants to buy the US arm of the company. That's

0:00:16.320 --> 0:00:19.680
<v Speaker 2>Frank McCourt, junior founder of Project Liberty and executive chairman

0:00:19.920 --> 0:00:22.599
<v Speaker 2>of McCourt Global. It joins us. Now, Frank, really good

0:00:22.640 --> 0:00:25.479
<v Speaker 2>to get your perspective. You've made that formal bid for

0:00:25.640 --> 0:00:28.680
<v Speaker 2>TikTok through Project Liberty. Do you know yet of TikTok

0:00:28.800 --> 0:00:29.440
<v Speaker 2>is for sale?

0:00:30.800 --> 0:00:33.840
<v Speaker 3>Well, no, we're about to find out. And let's steal

0:00:33.880 --> 0:00:34.800
<v Speaker 3>a quick fly over here.

0:00:34.840 --> 0:00:35.400
<v Speaker 4>Where are we?

0:00:35.479 --> 0:00:39.680
<v Speaker 3>So? The Supreme Court ruled nine to zero that the

0:00:41.560 --> 0:00:45.280
<v Speaker 3>TikTok must be either shutdown or sold. They also, by

0:00:45.320 --> 0:00:49.320
<v Speaker 3>the way, we're very explicit about the national security threats

0:00:50.000 --> 0:00:55.000
<v Speaker 3>of TikTok as it's currently designed. And this is a

0:00:55.080 --> 0:00:59.720
<v Speaker 3>key point because the legislation that they upheld was very

0:00:59.760 --> 0:01:02.360
<v Speaker 3>clear that this is a national security threat. The Supreme

0:01:02.400 --> 0:01:08.440
<v Speaker 3>Court just validated that and reaffirmed that. So if it's sold,

0:01:08.840 --> 0:01:11.760
<v Speaker 3>because the choice is bann or sell. If it's sold,

0:01:12.319 --> 0:01:15.920
<v Speaker 3>whoever buys it has to fulfill the criteria that the

0:01:15.959 --> 0:01:20.280
<v Speaker 3>Supreme Court laid out. You need to disentangle the user

0:01:20.319 --> 0:01:24.720
<v Speaker 3>base and the data from the Chinese technology project. Liberty

0:01:24.920 --> 0:01:28.560
<v Speaker 3>has a clean tech stack to onboard the user base

0:01:29.000 --> 0:01:32.080
<v Speaker 3>and the data and meet the criteria laid out by

0:01:32.080 --> 0:01:33.080
<v Speaker 3>the Supreme Court.

0:01:33.640 --> 0:01:35.240
<v Speaker 2>Frank, do you have an I mean, I'm sure you

0:01:35.280 --> 0:01:37.520
<v Speaker 2>have an idea of how much you would pay for it,

0:01:37.560 --> 0:01:41.119
<v Speaker 2>but can you help me understand how you came to evaluation.

0:01:42.640 --> 0:01:44.640
<v Speaker 4>Yeah, well, you know it's worth something.

0:01:45.080 --> 0:01:47.000
<v Speaker 3>And on the other hand, we know what the you

0:01:47.040 --> 0:01:50.760
<v Speaker 3>know what the entire company is worth on the secondary market.

0:01:50.800 --> 0:01:53.120
<v Speaker 4>You know what people are selling shares for now, so

0:01:53.160 --> 0:01:54.000
<v Speaker 4>you have bookends.

0:01:54.360 --> 0:01:58.120
<v Speaker 3>And then we know that us TikTok is somewhere around

0:01:58.720 --> 0:02:02.760
<v Speaker 3>eight percent ten percent the entire platform, so you have

0:02:02.800 --> 0:02:07.160
<v Speaker 3>an ability there to be able to bookend or frame

0:02:07.480 --> 0:02:11.760
<v Speaker 3>the valuation. Of course, we've done extensive modeling to sharpen that. Now,

0:02:11.800 --> 0:02:16.360
<v Speaker 3>the one big if is what exactly are they selling?

0:02:16.639 --> 0:02:19.120
<v Speaker 3>Are they selling the brand or not? Which of the

0:02:19.160 --> 0:02:21.720
<v Speaker 3>assets are they selling? Of course, the user base and

0:02:21.760 --> 0:02:22.480
<v Speaker 3>the data are.

0:02:22.400 --> 0:02:23.520
<v Speaker 4>What's critical to us.

0:02:23.720 --> 0:02:27.400
<v Speaker 3>But what we know for sure is they're not selling

0:02:27.400 --> 0:02:30.760
<v Speaker 3>the algorithm, and that is key. If you come forward

0:02:30.919 --> 0:02:33.679
<v Speaker 3>with all the money in the world and say I'll

0:02:33.680 --> 0:02:37.480
<v Speaker 3>buy us TikTok, but I need the algorithm. You're not

0:02:37.520 --> 0:02:40.800
<v Speaker 3>going to get it because the legislation won't allow it.

0:02:40.840 --> 0:02:45.520
<v Speaker 3>And the Supreme Court upheld that legislation and said any

0:02:45.880 --> 0:02:52.040
<v Speaker 3>buyer must to be eligible, must not use or rely

0:02:52.160 --> 0:02:56.279
<v Speaker 3>on any of the Chinese technology that is really fundamental

0:02:56.320 --> 0:02:59.320
<v Speaker 3>to this transaction. So of course it's about the money,

0:02:59.639 --> 0:03:02.560
<v Speaker 3>but it's about having the technology to onboard the user

0:03:02.600 --> 0:03:05.520
<v Speaker 3>base and the data without relying on the Chinese technology.

0:03:05.720 --> 0:03:08.799
<v Speaker 1>Frank Roman here, I am curious though about China's involvement

0:03:08.800 --> 0:03:11.120
<v Speaker 1>in this. They obviously have a big say and whether

0:03:11.160 --> 0:03:13.760
<v Speaker 1>this gets sold and potentially who it gets sold to.

0:03:15.080 --> 0:03:17.639
<v Speaker 1>Are you worried at all about but your bid? I'm

0:03:18.320 --> 0:03:21.760
<v Speaker 1>specifically speaking about your potential bid for this company that

0:03:21.919 --> 0:03:24.760
<v Speaker 1>it would satisfy whatever China's looking for. And I don't know.

0:03:24.800 --> 0:03:26.480
<v Speaker 1>Do you know what China's looking for out of this?

0:03:27.600 --> 0:03:27.760
<v Speaker 4>Well?

0:03:27.760 --> 0:03:33.120
<v Speaker 3>I know what China is is for sure clear about

0:03:33.880 --> 0:03:37.760
<v Speaker 3>They're not letting the algorithm go, right. They've said this

0:03:37.800 --> 0:03:42.760
<v Speaker 3>is part of Chinese government property, part of the so

0:03:42.840 --> 0:03:45.760
<v Speaker 3>the IP is something that they have a white knuckle

0:03:45.800 --> 0:03:50.720
<v Speaker 3>grip on and by the way, clear and any buyer

0:03:51.200 --> 0:03:53.880
<v Speaker 3>is not going to get that anyway because the legislation

0:03:53.960 --> 0:03:57.680
<v Speaker 3>won't allow it. So I think the win here for

0:03:57.920 --> 0:04:02.800
<v Speaker 3>China is a buyer coming for that can comply with

0:04:02.880 --> 0:04:05.880
<v Speaker 3>what China has said they're not selling and make a

0:04:05.920 --> 0:04:08.320
<v Speaker 3>deal for what they might be willing to sell. And

0:04:08.400 --> 0:04:13.600
<v Speaker 3>Romayne will know shortly whether or not byte Edance is

0:04:13.600 --> 0:04:16.000
<v Speaker 3>going to change their mind now that they've exhausted their

0:04:16.080 --> 0:04:20.800
<v Speaker 3>legal remedies. And I've said from the beginning that the

0:04:20.839 --> 0:04:24.440
<v Speaker 3>government would win the case, the legislation would be upheld,

0:04:24.720 --> 0:04:27.920
<v Speaker 3>and when that happened, us TikTok would be for sale

0:04:28.720 --> 0:04:29.800
<v Speaker 3>without the algorithm.

0:04:30.000 --> 0:04:30.760
<v Speaker 4>So let's see.

0:04:30.800 --> 0:04:34.880
<v Speaker 3>We now know that the first of those is correct,

0:04:34.880 --> 0:04:38.080
<v Speaker 3>that the Supreme Court has upheld the government's position, and

0:04:38.120 --> 0:04:40.560
<v Speaker 3>will now see if by Dance changes its mind and

0:04:40.600 --> 0:04:43.919
<v Speaker 3>wants to enter into conversations about a deal. Why not

0:04:44.520 --> 0:04:47.200
<v Speaker 3>why not sell it for something rather than get nothing

0:04:47.200 --> 0:04:47.960
<v Speaker 3>and just shut it down.

0:04:48.160 --> 0:04:50.039
<v Speaker 1>So Frank, in terms of trying to put a value

0:04:50.080 --> 0:04:51.240
<v Speaker 1>on this, and I know it's going to take some

0:04:51.320 --> 0:04:53.280
<v Speaker 1>time to hear from those folks before you can put

0:04:53.279 --> 0:04:55.800
<v Speaker 1>a true value. Do you worry at all about potential

0:04:55.839 --> 0:04:59.280
<v Speaker 1>attrition of users that with all this talk about a ban,

0:04:59.640 --> 0:05:02.120
<v Speaker 1>there's been and a lot of anecdotal evidence of users

0:05:02.279 --> 0:05:06.719
<v Speaker 1>power users migrating to other social media platforms and anticipation

0:05:06.760 --> 0:05:08.920
<v Speaker 1>of a ban. Does that worry you at all that

0:05:09.160 --> 0:05:11.279
<v Speaker 1>you might be left with an asset that is just

0:05:11.279 --> 0:05:12.520
<v Speaker 1>seeing too many people flee.

0:05:13.640 --> 0:05:14.240
<v Speaker 4>Absolutely.

0:05:14.360 --> 0:05:16.240
<v Speaker 3>I think it's one of the big risks here, which

0:05:16.279 --> 0:05:19.960
<v Speaker 3>is why we're hoping that the app stays led up.

0:05:20.279 --> 0:05:24.240
<v Speaker 3>And by the way, President Biden and President elect Trump

0:05:24.279 --> 0:05:26.160
<v Speaker 3>have both said they want to see the applet up,

0:05:26.200 --> 0:05:28.839
<v Speaker 3>they don't want to see it banned. The key here

0:05:29.800 --> 0:05:32.160
<v Speaker 3>is in order for that to happen and the ninety

0:05:32.240 --> 0:05:34.520
<v Speaker 3>days to kick in, there needs to be a viable

0:05:35.200 --> 0:05:38.200
<v Speaker 3>buy There needs to be a deal, and for a

0:05:38.320 --> 0:05:41.240
<v Speaker 3>buyer to be viable, they need to have the technology

0:05:41.279 --> 0:05:43.320
<v Speaker 3>stack to move the user base in the data over

0:05:43.360 --> 0:05:47.360
<v Speaker 3>to without relying on the Chinese technology. So it's more

0:05:47.400 --> 0:05:51.760
<v Speaker 3>than your typical business deal. Highest bidder wins. This is

0:05:51.800 --> 0:05:55.680
<v Speaker 3>a complicated transaction and at the heart of it is

0:05:55.839 --> 0:06:00.320
<v Speaker 3>protecting American citizens. Our technology does that, and then putting

0:06:00.320 --> 0:06:04.880
<v Speaker 3>together putting forward a respectable bid for the US TikTok

0:06:04.960 --> 0:06:07.520
<v Speaker 3>assets without the Chinese technology.

0:06:08.000 --> 0:06:12.359
<v Speaker 2>Frank, there is a conversation that circulates that potentially TikTok

0:06:12.440 --> 0:06:15.200
<v Speaker 2>is getting wrapped into trade conversations when it comes to China.

0:06:15.240 --> 0:06:17.680
<v Speaker 2>Have you spoken to anyone in the Trump administration about this?

0:06:18.960 --> 0:06:21.880
<v Speaker 3>Yeah, we have, and you know, Kevin Olaria has joined

0:06:22.279 --> 0:06:25.039
<v Speaker 3>our bid and Kevin went tomorrow lago. We spoke to

0:06:25.080 --> 0:06:28.440
<v Speaker 3>President elect Trump, and President elect Trump encouraged us to

0:06:29.040 --> 0:06:32.279
<v Speaker 3>carry on. And I suspect that this this will be

0:06:32.320 --> 0:06:35.680
<v Speaker 3>a broader conversation that President elect Trump will have with

0:06:35.880 --> 0:06:40.440
<v Speaker 3>President she that said, we're still back to square one

0:06:40.720 --> 0:06:46.360
<v Speaker 3>about how do you buy us TikTok, keep it let up,

0:06:46.600 --> 0:06:50.919
<v Speaker 3>prevent a ban, and comply with the legislation and the

0:06:50.960 --> 0:06:52.080
<v Speaker 3>Supreme Court ruling.

0:06:52.400 --> 0:06:55.360
<v Speaker 4>And so I'm sure they'll be really and dealing going on,

0:06:55.440 --> 0:06:56.320
<v Speaker 4>and there always is.

0:06:56.360 --> 0:06:59.960
<v Speaker 3>But the point is there are some fundamental criteria necessary

0:07:00.120 --> 0:07:03.200
<v Speaker 3>to make the deal. And that's the key, and that's

0:07:03.200 --> 0:07:05.919
<v Speaker 3>where Project Liberty comes in. Because we've been building this

0:07:06.040 --> 0:07:08.520
<v Speaker 3>alternative tech stack for the last five years.

0:07:08.800 --> 0:07:10.920
<v Speaker 4>We're in the right place at the right time.

0:07:11.080 --> 0:07:13.040
<v Speaker 1>Frank, have you been in contact at all with the

0:07:13.040 --> 0:07:14.920
<v Speaker 1>Trump administration or the Trump transition.

0:07:15.640 --> 0:07:17.960
<v Speaker 3>Yes, as I just mentioned. You know, Kevin, who's my

0:07:18.080 --> 0:07:21.720
<v Speaker 3>partner on this, has gone Tomorrow logo with like two

0:07:21.760 --> 0:07:24.280
<v Speaker 3>weekends in a row now to be in touch with

0:07:24.560 --> 0:07:28.360
<v Speaker 3>all of the players there, the President elect himself and also.

0:07:28.160 --> 0:07:28.800
<v Speaker 4>His key team.

0:07:29.240 --> 0:07:32.640
<v Speaker 3>So we're we from the very outset here, wanted to

0:07:32.680 --> 0:07:36.520
<v Speaker 3>make sure that the Biden administration and the incoming Trump administration,

0:07:36.920 --> 0:07:39.920
<v Speaker 3>and of course both President Biden and President Elect Trump

0:07:40.080 --> 0:07:41.720
<v Speaker 3>knew exactly what we're up to it.

0:07:41.800 --> 0:07:44.280
<v Speaker 4>We don't want any surprises here. We want to help.

0:07:45.000 --> 0:07:47.720
<v Speaker 3>We want to be part of the solution to keep

0:07:47.760 --> 0:07:51.920
<v Speaker 3>TikTok lit up, avoid the band, and that's what President

0:07:51.960 --> 0:07:54.040
<v Speaker 3>Biden and President elect Trump want as well.

0:07:54.400 --> 0:07:57.120
<v Speaker 4>So let's make a deal. Let's get this done.

0:07:57.280 --> 0:07:59.920
<v Speaker 1>We have the solution, all right, Well, they're president elect

0:08:00.080 --> 0:08:01.880
<v Speaker 1>has said he needs time to review this. Of course,

0:08:01.920 --> 0:08:04.240
<v Speaker 1>he's inaugurated on Monday. Frank, We're going to catch up

0:08:04.240 --> 0:08:06.400
<v Speaker 1>with you sometime soon in the future once we get

0:08:06.440 --> 0:08:09.360
<v Speaker 1>more clarity on what the potential valuation could be. Frank

0:08:09.440 --> 0:08:13.080
<v Speaker 1>McCourt junior, the founder of Project Liberty and executive chairman

0:08:13.120 --> 0:08:15.640
<v Speaker 1>of McCourt Global, who has said that he would bid

0:08:15.920 --> 0:08:19.000
<v Speaker 1>for those us A TikTok assets along with Kevin O'Leary

0:08:19.000 --> 0:08:21.760
<v Speaker 1>and some other investors, should he be given the chance