October 1, 2022

Lawsuit Accuses McDonald’s of Racially Discriminatory Ad Spending

Two companies owned by media mogul Byron Allen have filed a lawsuit against McDonald’s Corp. , accusing the fast-food giant of discriminating against Black-owned media companies.

Entertainment Studios Networks Inc. and Weather Group LLC filed the complaint in Superior Court of California, seeking $10 billion in damages. The lawsuit targets what the companies allege are the restaurant chain’s “discriminatory contracting process and refusals to advertise on Plaintiffs’ networks on the basis of race.”

The suit marks the latest move by Mr. Allen, who is Black, to pressure large U.S. corporations to spend more ad dollars on Black-owned media companies. His Allen Media Group/Entertainment Studios produces movies and owns more than a dozen television stations as well as the Weather Channel and 10 digital-TV networks, such as Pets.TV and Cars.TV.

The lawsuit alleges that McDonald’s spent approximately $1.6 billion on U.S. TV ads in 2019 and estimates that less than $5 million, or 0.31%, of that budget was spent on Black-owned media. The complaint also alleges that McDonald’s hasn’t advertised on Entertainment Studios’ lifestyle networks since they were launched in 2009 but has purchased significant advertising on similarly situated, white-owned networks.

Mr. Allen has previously called on advertisers to spend at least 2% of their budgets with Black-owned media companies, a target he later increased to 5%.

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