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Kevin Mayer in Talks to Join RedBird Capital

LOS ANGELES — Kevin A. Mayer, who resigned as TikTok’s chief executive in August after three months on the job and who previously was a candidate to run the Walt Disney Company, is closing in on a new gig.

Mr. Mayer, 58, is in advanced talks to join RedBird Capital, a private investment firm with holdings in sports, entertainment and financial services, according to two people briefed on the matter who spoke on the condition of anonymity because an agreement was not finalized. RedBird was founded in 2014 by Gerry Cardinale, a former Goldman Sachs executive who is known for building businesses — with his 2001 creation of the YES regional sports network, which broadcasts New York Yankees games, with the Steinbrenner family as a prime example. RedBird manages about $4 billion in capital.

The specific role that Mr. Mayer has been discussing with RedBird was unclear. RedBird declined to comment, as did Mr. Mayer.

Before his interlude at TikTok, the short-form viral video app, Mr. Mayer served as Disney’s top streaming executive, overseeing the successful rollout of Disney+ last year. But he spent most of his 20-plus years at Disney as a deals maven. Mr. Mayer engineered the company’s blockbuster purchases of Pixar, Marvel and Lucasfilm. He also implemented Disney’s $71.3 billion purchase of 21st Century Fox assets, which brought Hulu and Hotstar, an overseas streaming service, under Disney control.

Mr. Mayer’s résumé suggests that RedBird’s aspirations in the media arena are more significant than previously realized. Mr. Cardinale’s firm (named for the songbird suggested by his last name) has mostly flown under the radar; early investments included Aethon United, a Texas natural gas producer, and TierPoint, a Missouri data center operator.

In February, however, RedBird unveiled an investment in Skydance Media, a fast-growing film, television and gaming studio founded by David Ellison, whose father is the Oracle billionaire Larry Ellison. (Oracle is now in the middle of a potential TikTok transaction intended to address the Trump administration’s concerns about the app’s ties to China.)

Mr. Cardinale’s firm also owns part of the YES network — a stake that links RedBird to Amazon’s streaming division. Last year, an investment group that included Amazon, Sinclair Broadcast Group, RedBird and Yankee Global Enterprises bought YES from Disney for an estimated $3.5 billion.

RedBird has also been increasingly active in sports.

Last month, RedBird bought the rowdy XFL football league in partnership with the actor Dwayne Johnson and his business partner, Dany Garcia. In July, RedBird purchased the Toulouse Football Club, a French soccer team. Also in July, RedBird joined with Billy Beane, the Oakland Athletics executive, to start a special purpose acquisition company, or SPAC, dedicated to sports.

Also known as “blank check” companies, SPACs raise money without having a detailed business plan. They have become hot investment vehicles as investors look for opportunities created by the upheaval of the coronavirus pandemic. RedBird’s sports SPAC raised $575 million, positioning it to pursue acquisitions (English soccer is seen as a potential hunting ground) worth $5 billion or more when teaming with other investors.

Mr. Mayer was a logical choice to succeed Robert A. Iger as Disney’s chief executive. But the company’s board of directors passed him over in February, instead promoting Bob Chapek, the lower-profile chairman of Disney’s theme parks and consumer products businesses. Eager to run his own show, Mr. Mayer jumped at the chance to serve as chief executive of TikTok, which exploded in popularity during the pandemic. He was also named chief operating officer of ByteDance, the Chinese conglomerate that owns the app.

TikTok faced deep distrust across the U.S. government because of its Chinese ownership. Mr. Mayer’s presence was supposed to help assuage those concerns. But TikTok unexpectedly became a geopolitical piñata amid worsening U.S.-China tensions. President Trump signed an executive order to block TikTok if ByteDance did not sell the app’s U.S. operations.

TikTok was shocked by the order, in part because it had been working behind the scenes to satisfy the White House by holding talks with investors and others to reduce its Chinese ownership.

Mr. Mayer resigned on Aug. 26. “I understand that the role that I signed up for — including running TikTok globally — will look very different as a result of the U.S. administration’s action to push for a sell off of the U.S. business,” he wrote in his resignation letter.

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How TikTok’s Owner Tried, and Failed, to Cross the U.S.-China Divide

The Chinese entrepreneur behind TikTok took ample precautions when he set out to straddle the tech world’s most treacherous divide: the one separating China’s tightly controlled internet from the rest of the planet.

He made TikTok unavailable in China so the video app’s users wouldn’t be subject to the Communist Party’s censorship requirements. He stored user data in Virginia and Singapore. He hired managers in the United States to run the app and lobbyists in Washington to fight for it on Capitol Hill.

None of that counted for much in the end. With TikTok now negotiating a sale to Microsoft under intense pressure from President Trump, the digital wall between China and the United States is proving to be higher than ever at this moment of widening conflict between the two countries.

Only this time, it is the U.S. government, not China’s, putting up the barricades — an escalation that could foretell an even more restrictive time ahead for companies in both countries.

ByteDance, the eight-year-old Chinese social media giant behind TikTok, is China’s first truly global internet success story. The company’s founder, Zhang Yiming, 37, began pushing to expand overseas early in its existence, believing that only a company with worldwide reach could remain on the technological bleeding edge.

But TikTok ended up resonating with American teenagers at a time when even a platform for short viral videos is subject to political scrutiny. Under China’s leader, Xi Jinping, the Communist Party has emphasized its ultimate authority over Chinese people and businesses. Suspicion never dissipated that TikTok — no matter how many non-Chinese executives it put in charge — might be unable to withstand pressure from Beijing to surrender user data or manipulate content.

Similar doubts already hang over many other Chinese tech companies. TikTok’s sudden change of fortune could force them to re-evaluate their own international ambitions.

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Credit…Shannon Stapleton/Reuters

Chibo Tang, a partner in Hong Kong at the venture capital firm Gobi Partners, said that, increasingly, his advice to Chinese tech companies is to steer clear of the United States when expanding overseas — to follow instead the Chinese government’s diplomatic overtures and investments in places such as Southeast Asia, the Middle East and Africa.

“If you want to go out and tackle more difficult markets, sure, but obviously there’s consequences and additional costs,” Mr. Tang said. “Going forward, Chinese entrepreneurs in these tech companies should be aware of that.”

One unnamed entrepreneur put ByteDance’s position in even starker terms to the Chinese tech blog Huxiu on Monday: “Once the U.S. business is lost, half of the space for thinking about globalization has vanished.”

As uncertainty swirled on Sunday about whether Mr. Trump would allow Microsoft to continue negotiations with TikTok, ByteDance issued a late-night statement in China reiterating its commitment to going global.

“In the process, we are facing all kinds of complex and unimaginable difficulties,” the company said. The statement cited the tense geopolitical environment, culture clashes and, in an unusually direct jab at a competitor, “Facebook’s plagiarism and smears.”

Facebook is rolling out a TikTok-like feature called Reels on Instagram, which it owns. The company’s chief executive, Mark Zuckerberg, has also argued that undermining American tech companies with excess regulation could allow Chinese rivals to export their own, very different values to the world. Facebook declined to comment on ByteDance’s statement.

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Credit…Hiroko Masuike/The New York Times

For Mr. Zhang of ByteDance, TikTok’s run-in with the Trump administration has been an education in politics, though hardly his first.

Mr. Zhang falls on the geekier side of the tech founder spectrum. He repaired computers in college, and in past interviews, he appears most at home talking about algorithms and the flow of information. He is not a Communist Party member, he told The Atlantic magazine recently.

For many years, he echoed Mr. Zuckerberg in saying he ran a tech company, not a media outlet, which meant he should not be imposing his own judgments over content.

“I can’t accurately decide whether something is good or bad, highbrow or lowbrow,” he told the Chinese business magazine Caijing in 2016.

Mr. Zhang may have thought he was insulating himself in China. But the perils of that technology-driven approach were made clear in 2018, when the Chinese authorities shut down one of ByteDance’s oldest products, a humor app called Neihan Duanzi, for spreading vulgar material.

“For a long time, we put too much emphasis on the role of technology and didn’t realize that technology must be guided by core socialist values,” Mr. Zhang wrote in a public letter of apology.

ByteDance’s popular news aggregator app, Toutiao, had also been under fire for saucy content. In response, Toutiao began featuring more stories about Mr. Xi at the top of its feed.

By then, ByteDance had already begun expanding in Japan, India, Southeast Asia and beyond. TikTok was released in 2017 as the international edition of Douyin, one of ByteDance’s Chinese video apps.

TikTok had some early scrapes with foreign governments. In 2018, Indonesia temporarily blocked it for hosting inappropriate content. Despite the challenges, Mr. Zhang said at an event in Beijing that year that going global was the only way to access the talent and resources needed for long-term success.

He said he had studied another Chinese company’s rapid growth overseas to see how it could be done.

Which company? Huawei.

His choice was prescient in hindsight, though perhaps not in the way he intended. The Trump administration has for years sought to kneecap the giant Chinese maker of telecommunications equipment and smartphones. It, too, has been called a national security threat by White House officials.

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Credit…Lam Yik Fei for The New York Times

International growth was top of mind when Mr. Zhang began courting Musical.ly, a Chinese-made lip-syncing app that had found success in the United States and Europe. In late 2017, ByteDance agreed to buy Musical.ly for around $1 billion. ByteDance would later merge the app into TikTok, giving it a toehold in the West that would eventually propel it to wider success.

According to people with knowledge of the matter, the two parties did not approach the Committee on Foreign Investment in the United States, or CFIUS, to seek its blessing beforehand — a decision that would later come back to haunt ByteDance.

CFIUS (pronounced SIFF-ee-yuss) typically evaluates foreign deals involving an American business for possible national security risks. But it also claims jurisdiction over deals between foreign businesses that have significant American operations.

As TikTok became a smash hit in the United States, concerns arose about whether the app was censoring content that might offend Beijing. Late last year, The New York Times and others reported that CFIUS was looking into the Musical.ly deal. Washington politicians also began voicing fears that TikTok could be a conduit for China to meddle in American elections.

With pressure building, some of Mr. Zhang’s investors and advisers offered ideas for putting distance between TikTok and ByteDance, including reorganizing TikTok’s corporate or legal structure.

In an interview in November with The Times, Alex Zhu, a founder of Musical.ly who was then the head of TikTok, said the company wouldn’t rule out such changes.

“We continuously look at the company structure and optimize the structure,” Mr. Zhu said.

But instead of a major restructuring, Mr. Zhang opted for personnel changes. This spring, he reshuffled ByteDance executives in China and said he would personally devote more time and energy to Europe, the United States and other markets. In May, Liu Zhen, a former Uber executive in China who had been overseeing ByteDance’s global expansion, left the company. Mr. Zhu was replaced as TikTok’s head by Kevin Mayer, a veteran Disney executive in the United States.

ByteDance also embarked upon a lobbying push in Washington to sell the idea that TikTok’s allegiances were with the United States, not China. In meetings with lawmakers, lobbyists emphasized the app’s light, uplifting fare and the fact that many of its top leaders were American residents.

Last month, when American technology companies including Facebook and Google began reassessing their operations in Hong Kong in the wake of a new security law that gave the Chinese government greater powers in the territory, TikTok went further, announcing that it would stop operating in Hong Kong completely.

The move let TikTok demonstrate its willingness to stand up to Beijing, as its head of U.S. public policy later emphasized in an email newsletter to Capitol Hill. But Hong Kong had not been a major market for the app, making the decision look more like a publicity stunt than a self-sacrifice made on principled grounds.

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Credit…Christopher Lee for The New York Times

The Trump administration’s scrutiny continued unabated. After Mr. Trump failed to draw huge crowds at a June re-election rally in Tulsa, Okla., TikTok users claimed to have pulled off a prank by registering for tickets and then not attending the event. In early July, Secretary of State Mike Pompeo floated the idea of banning the app over security concerns.

Within weeks, Microsoft said it had received Mr. Trump’s go-ahead for pursuing a deal to buy TikTok’s U.S. operations. CFIUS had decided to order ByteDance to divest.

In a letter to ByteDance’s employees on Monday, Mr. Zhang made the recent turmoil sound more like a technical matter than an existential threat brought about by hostile geopolitical forces.

“Although we repeatedly emphasized that we are a private company, and that we are willing to make more technical changes to address the concerns, CFIUS still decided that ByteDance had to sell TikTok’s U.S. business,” Mr. Zhang wrote. “We do not agree with this decision, because we have always insisted on guaranteeing users’ data security, the platform’s neutrality and transparency.”

Lin Qiqing contributed research.

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Disney’s Head of Streaming, Kevin Mayer, Becomes TikTok C.E.O.

LOS ANGELES — The Walt Disney Company’s top streaming executive, Kevin Mayer, resigned on Monday to become the chief executive of TikTok, the app for making and sharing short videos that has exploded in popularity during the coronavirus pandemic.

Mr. Mayer, 58, will also serve as chief operating officer of ByteDance, the Chinese conglomerate that owns TikTok. “I was happy with my job at Disney,” Mr. Mayer said by phone. “The magnitude of this opportunity was just something I couldn’t pass up.” He cited gaming and music as two expansion possibilities. (He sounded considerably less eager to post TikToks of himself.)

TikTok’s app has been downloaded about 1.9 billion times worldwide, including 172 million downloads in the United States, according to Sensor Tower, an app data firm. And its surging popularity has increased during the pandemic. In the first quarter of this year, it was downloaded 307 million times, more than any other app in the world, according to Sensor Tower data.

That popularity has made TikTok by far the biggest digital success for a Chinese-owned company in the Western world. As a result, it has faced deep distrust across the U.S. government. Several government agencies, including nearly all branches of the military, have barred employees from downloading or using the app. In March, Senator Josh Hawley, a Republican from Missouri, proposed legislation to bar any federal employee from using the app.

“.@tiktok_us previously told me they couldn’t attend hearings and testify because executives were located in #China,” Mr. Hawley wrote on Twitter after Mr. Mayer’s hiring was announced. “But this new executive lives in the USA. I look forward to hearing from him. Under oath.”

Both Republicans and Democrats have questioned the Chinese government’s influence over the app. Senator Chuck Schumer of New York, the Democratic minority leader, and Senator Tom Cotton, Republican from Arkansas, co-wrote a letter to the director of national intelligence in October, requesting a review of the national-security implications of TikTok’s expanding influence.

TikTok has meanwhile hired a number of American executives and employees to run its business and review content on its app. Vanessa Pappas, a former YouTube executive who joined TikTok as one of its American chiefs last year, said in a November blog post that the company’s United States-based team would call the shots on TikTok’s U.S. business, including by setting specific rules for American users.

Now Mr. Mayer will provide a clear link between TikTok and ByteDance’s leadership in Beijing, with his dual roles at the two companies.

Mr. Mayer’s departure from Disney is not entirely a surprise. Disney’s board of directors passed over him this year when it was looking for a successor for Robert A. Iger, who abruptly stepped down in February. (Mr. Iger remains executive chairman, with a focus on the creative process.) Many people in Hollywood and on Wall Street had viewed Mr. Mayer as the logical internal candidate because the future of Disney rests on its ability to transform itself into a streaming titan. The top job, however, went to Bob Chapek, the lower-profile chairman of Disney’s theme parks and consumer products businesses.

“Kevin has had an extraordinary impact on our company over the years,” Mr. Chapek said in a statement. “Having worked alongside Kevin for many years on the senior management team, I am enormously grateful to him for his support and friendship.”

Despite being passed over, Mr. Mayer had indicated that he was in no hurry to leave. There is no business more important to Disney than streaming, and Mr. Mayer has relished working on services like Disney Plus, which rolled out in November and now has about 55 million subscribers — a runaway hit. Disney Plus will arrive in parts of Asia and Latin America this year. Hulu, which has about 30 million subscribers, and Hotstar, the leading streaming service in India, have also been part of Mr. Mayer’s portfolio.

Mr. Mayer is best known as Disney’s longtime deals maven. Before running the direct-to-consumer and international division for the past two years, he served as Disney’s chief strategy officer, helping to orchestrate the purchases of Pixar, Marvel, Lucasfilm, most of 21st Century Fox and BamTech, a technology company that specializes in streaming video.

Mr. Mayer joined Disney in 1993 before leaving in 2000 to run Playboy.com. He soon returned to Disney to work on Go.com, a web portal that eventually failed, and other Disney websites, including ESPN.com, before moving to strategic planning.

Disney named Rebecca Campbell as Mr. Mayer’s successor. She has been ascending quickly. Just last year, she was named president of the Disneyland Resort in Anaheim, Calif. Before that, Ms. Campbell had a senior leadership role at Disney’s Europe, Middle East and Africa operation; she worked on the launch plan for Disney Plus. Disney also named a new chairman for theme parks and consumer products: Josh D’Amaro, who was president of Walt Disney World in Orlando, Fla.

ByteDance, founded in 2012, has quickly become a major player in the global tech industry with a number of wildly popular apps, including Douyin, in effect the Chinese version of TikTok, and Toutiao, a news aggregator that has run afoul of Chinese regulators for its sometimes racy content. Zhang Yiming, 37, its secretive founder and chief executive, has quickly become one of the richest and most influential people in China. While scrutiny of ByteDance increases with its size, his comments have resembled those of Mark Zuckerberg, Facebook’s chief, arguing that ByteDance is a tech company, not a media company.

A TikTok spokesman on Monday stressed that TikTok was not owned by a Beijing-based company. Instead, its parent company, ByteDance Ltd., is incorporated in the Cayman Islands, though he could not say how many people are based there. That entity owns TikTok and all of the businesses in China, he said.

Mr. Mayer will remain in his current home in Los Angeles, though he will travel frequently to Bytedance’s headquarters in Beijing, as well as TikTok’s major offices in New York, London, Japan and India, the spokesman said.

Brooks Barnes reported from Los Angeles, and Jack Nicas from Oakland, Calif.

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