Media mogul Byron Allen has a new target in his quest to get more ad revenue for Black-owned media. After a series of lawsuits and threatened lawsuits against major corporations, Allen Media Group is suing McDonald’s Corp., the world’s largest restaurant chain by revenue, for $10 billion in damages, alleging racial discrimination.
The lawsuit accuses the fast-food giant of racial stereotyping and refusing to contract with Allen Media Group’s Entertainment Studios and Weather Group in violation of federal and state law. The suit was filed in the Superior Court Of California in Los Angeles.
McDonald’s responded that it plans to increase ad spending at “diverse-owned” media. “Together with our Owner/Operators, we have doubled down on our relationships with diverse-owned partners. This includes increasing our spending with diverse-owned media from 4 percent to 10 percent and with Black-owned media from 2 percent to 5 percent of total national advertising over the next four years. Once we receive the complaint, we will review and respond accordingly,” McDonald’s said in a statement to Deadline.
This isn’t the first time Byron Allen has called a major corporation out for lack of ad buys in Black media. Allen and other Black media owners joined forces in April to pressure automaker General Motors (GM) for the same reason.
Allen’s Entertainment Studios owns 12 TV networks that are carried by major multichannel video programming distributors. His Weather Group owns The Weather Channel. AMG is also the parent owner of TheGrio.
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According to the latest lawsuit, African Americans represent 40 percent of McDonald’s U.S. sales but African-American-owned media get less than $5 million out of its nearly $1.6 billion in annual TV advertising.
McDonald’s has an annual revenue of $100 billion. The lawsuit charges that the leading global food seller created an “African American” tier and gave smaller budgets and less-favorable pricing to Black media despite appealing to the general market, TheGrio reported.
In a letter to McDonald’s CEO Chris Kempczinski, Allen and other Black media owners urged the company to commit 5 percent-to-15 percent of its $1.6 billion advertising and marketing budget to Black-owned media.
“This is about economic inclusion of African American-owned businesses in the U.S. economy,” Allen said. “McDonald’s takes billions from African American consumers and gives almost nothing back. The biggest trade deficit in America is the trade deficit between white corporate America and Black America, and McDonald’s is guilty of perpetuating this disparity. The economic exclusion must stop immediately.”
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Earlier this year, Allen settled a $10 billion lawsuit filed by his Entertainment Studios against Charter Communications for racial discrimination for refusing to distribute Allen’s channels. A year earlier, Allen agreed to a settlement in a lawsuit against Comcast for racial discrimination over Comcast’s refusal to also distribute his channels.