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This memo is presented by beatBread.
beatBread's Deal Comparison Tool helps artists and labels make the best decisions.
A U.K. based label used it for a deal they loved from one of the largest distributors in the industry. But after using the tool, they took another deal.
“They set their business up to be much more robust for both by not giving away an arm and a leg if things went well.” - Peter Sinclair, CEO of beatBread.
According to Peter, this happens 60% of the time. Even the best lawyer might miss the details. Find your best option, even if it’s not beatBread, with the Deal Comparison Tool.
Today's episode comes in two parts. First, a quick 9-minute breakdown from me on how TikTok got caught in the U.S.-China trade war. Second, a partner spotlight with beatBread's Peter Sinclair on their new Deal Comparison tool
Listen to the full episode here or read below for how this TikTok situation will likely play out.
It’s somewhat fitting that a social media platform is a pawn in a much bigger debate. We’re used to seeing media products become loss leaders for their parent companies. But a bargaining chip in a trade war? The game has changed.
In the days surrounding the April 5 deadline for ByteDance to either sell its U.S. operations or face a ban, Vice President J.D. Vance, whose team has led The White House's TikTok negotiations, reportedly proposed a specific ownership structure:
- 50% to new U.S. investors (Blackstone, Andreessen Horowitz, Larry Ellison, etc.)
- 30% to remain with existing U.S. investors like General Atlantic
- 20% to remain with ByteDance
- A license of TikTok’s algorithm to U.S. investors that’s still owned by ByteDance
However, once the Trump administration implemented new tariffs against China, Beijing rejected the deal. The Chinese government flipped the script, using Trump's own "art of the deal" tactics against the U.S. TikTok became the dangling carrot between the two countries.
The derailment wasn't surprising. In March, President Trump acknowledged TikTok's role as a bargaining chip. "Maybe I'll give [China] a little reduction on tariffs or something to get it done. TikTok is big, but every point on tariffs is worth more than TikTok."
Now, with another 75-day extension on the TikTok decision, we're in the middle of a standoff. Neither country wants to get caught blinking. So what happens next?
Scenario 1: Perpetual Limbo
TikTok likely remains in regulatory purgatory until another global event diverts attention from this saga, allowing both governments to save face while avoiding decisive action. The deadline keeps getting punted whenever it’s asked about, like how Cardi B responds when asked about the release of her second album.
Scenario 2: The Compromise A modified 50-50 split emerges between U.S. and Chinese ownership:
- 50% ByteDance
- 30% of current U.S. investors
- 20% of new U.S. investors
- Algorithm remains Chinese-owned but licensed to U.S. operations
Scenario 3: Banned in the U.S.
Very unlikely, but still needs to be mentioned.
Neither Beijing nor Washington would celebrate this 50-50 joint venture-style compromise, but mutual dissatisfaction might be the strongest indicator of the best outcome. The deal that makes everyone equally unhappy is probably the fairest one possible.
Listen to the full podcast episode for more on:
- All the drama surrounding the April 5 deadline
- How is ByteDance performing in 2024 despite these headwinds?
- Why TikTok Shop might struggle if TikTok remains in limbo
Listen here: Spotify | Apple Podcasts | Overcast
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