The Biz: Court Upholds TikTok Ban, UFC’s Billion-Dollar Hopes, Market Watch & More

The Bell Tolls For TIkTok
The United States Supreme Court upheld the so-called “TikTok Ban” in a decision released Friday,.
The court heard arguments Jan. 10 in TikTok v. Garland, a suit that seeks to reverse the Protecting Americans from Foreign Adversary Controlled Applications Act.
Under the law, passed by overwhelming bipartisan majorities in the House and Senate in 2024, TikTok’s owner, ByteDance— which has extensive ties to the government of the People’s Republic of China and the Chinese Communist Party — must divest from TikTok by Jan. 19 or the app will become unavailable in the United States. Proponents of the law say that ByteDance collects user data which it may share with the Chinese government and uses its algorithm to center information favorable to Chinese interests. TikTok has been implicated in numerous misinformation and disinformation efforts which the U.S. intelligence community says is a CCP effort to foment unrest and distrust in the U.S..
During oral arguments, Supreme Court justices seemed warm to the position. The U.S. government has long had policies that prevent adversarial foreign governments from owning and operating traditional broadcasters and, for good or ill, TikTok and other social media outlets are replacing those old-school news sources. Free speech advocates and a group of TikTok creators who joined the suit argued their First Amendment rights would be infringed by the ban. The court looked askance at that line of thought.
The Friday opinion came as a bit of a surprise, timing-wise. The court did not issue a ruling Jan. 15, the only scheduled release date for opinions this week,. Justices did ask U.S. Solicitor General Elizabeth Prelogar for the government’s position on a ruling that could come after the ban goes into effect Jan. 19. She said she understood if the court needed more time but that the preference is the ban would go into effect Sunday. Notably, that’s the last full day of the Biden Administration. In his first term, President-elect Donald Trump supported the TikTok ban, but his position has apparently changed and he’s now publicly mooted the idea he could use executive action to reverse the law. He invited TikTik CEO Shou Chew to his inauguration.
TikTok has become a valuable resource in music. Unsigned artists have leaped to widespread popularity by going viral. Users (and labels) find it extremely worthwhile for music discovery and established artists use it as yet another avenue for fan outreach.
As the ban looms, TikTok lovers have left for other, similar sites, including Xiaohongshu, usually known in the Anglosphere as “RedNote,” though the more accurate translation as “Little Red Book,” the English sobriquet for CCP founder Mao Zedong’s Quotations.
In His Feelings? Drake Drops One Suit, Files Another Against UMG
Canadian rap star Drake dropped his lawsuit against Universal Music Group and Spotify, in which he alleged the companies conspired to artificially inflate spins for Kendrick Lamar’s diss track “Not Like Us.” And then he almost immediately filed a new suit, alleging UMG defamed him.
Drake accuses UMG — which, by the way, owns his label Republic Records — of promoting a “false and malicious narrative” in the lyrics, artwork and music video of the Lamar single.
Filed in a New York court, the suit goes to great pains to emphasize Drake is taking on UMG rather than Lamar.
“Drake filed a lawsuit against his label, Universal Music Group, to hold UMG accountable for knowingly promoting false and defamatory allegations against him,” Drake’s law firm Wilkie Farr & Gallagher said in a statement. “Beginning on May 4, 2024 and every day since, UMG has used its massive resources as the world’s most powerful music company to elevate a dangerous and inflammatory message that was designed to assassinate Drake’s character, and led to actual violence at Drake’s doorstep. UMG wants the public to believe that this is a fight between rappers, but this lawsuit is not brought against Kendrick Lamar. This lawsuit reveals the human and business consequences to UMG’s elevation of profits over the safety and well-being of its artists, and shines a light on the manipulation of artists and the public for corporate gain.”
In Other UMG News…
Hedge-fund king Bill Ackman of Pershing Square Holdings has been pushing for UMG to leave Amsterdam’s Euronext exchange and relocate its headquarters stateside after Israeli soccer fans were attacked in the city in November. It doesn’t appear he’ll get his wish, though the recording giant did file an application to be traded on a U.S. exchange.
Pershing Square holds roughly 7.6% of UMG stock and Ackman sits on the board. Under Pershing’s contractual rights, it can force a U.S. listing, but cannot insist on a delisting elsewhere.
In its regulatory filing, UMG asked for a waiver of a 120-day filing requirement. UMG is expected to show up on a U.S. market later this year.
Sirius Problems … Or Opportunities?
Shares of Sirius XM — which represents basically the entire satellite radio market — lost more than half their value in 2024, which a shrinking subscriber base and thus declining revenues. In its first earning call of the year, it revised its 2025 projections downward once again.
Still, market-watchers think the company has some upside. Gas prices are dropping, which results in more driving, and more companies are calling their employees back into the office, increasing commuting times. Since radio — even satellite radio — is heavily dependent on in-car listening, Sirius may see a recovery. Warren Buffett’s Berkshire Hathaway, which owns more than one-third of the company already, added shares in both October and December, signaling the Oracle of Omaha sees something in the augurs.
A Billion Per Year For UFC?
UFC’s TV deal with ESPN — a five-year agreement totaling a reported $1.5 billion — expires in 2025 and the mixed martial-arts giant is shopping its broadcast rights. According to Bloomberg, the promotion wants its next deal in the $1 billion per annum range.
The report says a bevy of streamers are interested, including Netflix, which dipped its toe into the combat sports game with its stream of the Jake Paul-Mike Tyson boxing match and is now the streaming home of Monday Night Raw, the weekly flagship of WWE, also owned by UFC’s corporate parent TKO. Netflix will also broadcast the pro wrestling leader’s premium live events — what were once known as pay-per-views, including Wrestlemania — outside the U.S. NBC’s Peacock continues to be the PLE home for WWE stateside. The NBC-owned USA Network broadcasts WWE’s Smackdown on Friday. Development brand NXT is shown on over-the-air network The CW.
We mention this because the mix of streamers, cable and traditional broadcast — which necessarily provides WWE fans with a host of (frankly sometimes confusing) options — opens a lot of doors for new viewers to find the product. UFC may seek to copy the model of his corporate sibling.
Opry Parent Gets Into Festival Biz
Opry Entertainment Group — the subsidiary of Ryman Hospitality Partners that focuses on live entertainment and venue operations — is the new majority owner of festival producer Southern Entertainment.
The Charlotte-based promoter’s festival portfolio includes Carolina Country Music Fest in Myrtle Beach, South Carolina; Barefoot Country Music Fest in Wildwood, New Jersey; Lovin’ Life Music Fest in Charlotte, North Carolina; the Greenville Country Music Fest in Greenville, South Carolina; and the upcoming Field & Stream Music Fest in Winnsboro, South Carolina, returning in 2025 after country stars Eric Church and Morgan Wallen bought and revived the entire Field & Stream brand, including the eponymous magazine and associated festival.
OEG’s venues include the Grand Ole Opry House and Ryman Auditorium in Nashville and ACL Live in Austin. Its portfolio also includes WSM Radio, Blake Shelton’s Ole Red Brand and Category 10, the new Luke Combs-inspired bar and venue in Nashville.
Under the deal, OEG’s artist development programs will be integrated into Southern Entertainment’s country music festivals and the teams also “plan to develop additional artist-centered experiences in the years ahead,” according to a statement.
Market Watch
Live Nation shares increased more than $5 this week, trading at $134.80 midday Thursday, bolstered by rosy outlooks from major analysts, who anticipate strong numbers when the live giant reports 2024 earnings at the end of the February. Institutional investors and hedge funds have increased their LYV holdings in recent months. … Shares of Sphere Entertainment were up and down throughout the week, but by midday Thursday were trading at $41.93, up about $1.50 from last week’s close. JP Morgan Chase made a big buy this week, but analysts remain mixed with a near even split on buy, sell and hold recommendations from the major houses. … Endeavor continues hopping up and down, but all that jumping just keeps you in place: at midday Thursday, shares were trading at $30.32, more or less where they closed last week. Top executives continue to sell shares and the company continues to shop and sell assets as it prepares to go private. Its subsidiary TKO — which will remain public even after Silver Lake takes Endeavor private — was trading at $143.77 midday Thursday, up $1.48 from last Friday’s close. … Ryman Hospitality jumped nearly $3 when markets opened Wednesday, investors likely feeling bullish after the aforementioned OEG festival news. Trade volume, however, is relatively slow on the stock. The company reports earnings Feb. 21.
