McDonald’s Settles Byron Allen’s $10 Billion Lawsuit Over Excluding Black-Owned Media From Ad Spending

McDonald’s has reached a confidential settlement with media entrepreneur Byron Allen, ending a $10 billion federal lawsuit and a separate $100 million state-level suit that accused the fast-food giant of racial bias in its advertising practices. The lawsuits, filed by Allen’s companies Entertainment Studios Networks and Weather Group, alleged that McDonald’s engaged in "racial stereotyping" by largely excluding Black-owned media from its national advertising budget.

The settlement, announced Friday, comes just weeks before the federal trial was set to begin on July 15 in Los Angeles. It also resolves a related case in Los Angeles Superior Court. While the specific terms remain undisclosed, McDonald’s confirmed that it will now purchase advertisements "at market value" from Allen’s companies, aligning with its broader marketing strategy and business goals. McDonald’s continues to deny any wrongdoing.

Allen’s legal team accused McDonald’s of mischaracterizing Entertainment Studios as catering exclusively to Black audiences, which they said relegated the company to the brand’s minimal ad budget for Black-targeted media instead of its general market advertising pool. “Our differences are behind us,” Allen’s companies stated following the agreement, while also acknowledging McDonald’s renewed “commitment to investing in Black-owned media properties and increasing access to opportunity.”

The lawsuit also claimed that McDonald’s misled the public in 2021 when it announced a pledge to increase national ad spending with Black-owned media outlets from 2% to 5% by 2024. Allen said he took that pledge seriously when pursuing business from McDonald’s, but was ultimately turned away. His media group, Allen Media Group, is responsible for more than 90% of Black-owned media in the United States, according to the suit.

Among the networks under Allen’s portfolio are The Weather Channel, Cars.TV, Comedy.TV, ES.TV, Justice Central, MyDestination.TV, Pets.TV, and Recipe.TV. The legal battle has drawn national attention to longstanding concerns about racial equity in corporate advertising, particularly regarding the underrepresentation of Black-owned outlets in billion-dollar ad campaigns.

Link: Newsbreak