Media mogul Byron Allen goes ahead with $10B racial discrimination lawsuit against McDonalds

Media mogul Byron Allen goes ahead with $10B racial discrimination lawsuit against McDonalds – accusing it of only spending $5M advertising with black-owned firms out of $1.6B budget

  • Media mogul Byron Allen’s alleges McDonald’s allocates them just 3 percent of its $1.6billion advertising budget to black-owned networks
  • Allen – the owner of AMG Entertainment Studios and the Weather Group – initially sued McDonald’s on similar grounds last December but the case was thrown out
  • Allen said since AMG Entertainment Studio’s founding in 2009  it has tried repeatedly and unsuccessfully to obtain a contract from McDonald’s
  • McDonald’s denied the allegations, and its attorneys pointed out that the green-lighting of Allen’s lawsuit did not mean the accusations had merit 

Media mogul Byron Allen’s $10billion racial discrimination lawsuit against McDonald’s was given the green-light to proceed by a US court on Friday, nearly a year after it was dismissed last December.

Allen alleges McDonald’s intentionally chooses not to pay to place advertisements on black-owned networks – including his own AMG Entertainment Studios and Weather Group – costing the networks millions in potential annual revenue.

He alleges that despite black people making up 40 percent of the fast food market, McDonald’s relegates black-owned networks to an ‘African American tier’ and allocates them just $5million – .3 percent – of its $1.6billion advertising budget.

Media mogul Byron Allen's alleges McDonald's allocates them just 3 percent of its $1.6billion advertising budget to black-owned networks

Media mogul Byron Allen’s alleges McDonald’s allocates them just 3 percent of its $1.6billion advertising budget to black-owned networks

McDonald's denied the allegations, and its attorneys pointed out that the green-lighting of Allen's lawsuit did not mean the accusations had merit

McDonald’s denied the allegations, and its attorneys pointed out that the green-lighting of Allen’s lawsuit did not mean the accusations had merit

Los Angeles US District Judge Fernando Olguin did not rule on the case’s merits, but said he felt Allen had the right try to prove his case citing allegations that Entertainment Studios had since its 2009 founding tried repeatedly and unsuccessfully to obtain a contract from McDonald’s, whose ‘racist’ corporate culture harmed him.

‘Taken together, and construed in the light most favorable to plaintiffs, plaintiffs have alleged sufficient facts to support an inference of intentional discrimination,’ Olguin wrote in his decision.

An attorney for McDonald’s, Loretta Lynch, reiterated that Olguin did not rule on the case’s merits, and insisted the allegations were baseless.  

‘[The decision] has nothing whatsoever to do with the merits of the case, but simply allows Mr. Allen to continue to try, as he has for more than a year now, to substantiate his speculative and conclusory claims,’ Lynch said, ‘We believe the evidence will show that there was no discrimination and that Entertainment Studios’ claims are meritless.’ 

Allen, in a statement, said the case was ‘about economic inclusion of African American-owned businesses in the U.S. economy. McDonald’s takes billions from African American consumers and gives almost nothing back.’

Olguin dismissed an earlier version of Allen’s lawsuit last November, finding no proof of intentional and purposeful discrimination against his companies.

In May 2021, McDonald’s pledged to boost national ad spending with Black-owned media to 5 percent from 2 percent by 2024.

Allen said since AMG Entertainment Studio's founding in 2009 it has tried repeatedly and unsuccessfully to obtain a contract from McDonald's

Allen said since AMG Entertainment Studio’s founding in 2009 it has tried repeatedly and unsuccessfully to obtain a contract from McDonald’s

Allen’s lawsuit is not McDonald’s first accusation of racial discrimination. 

In 2020, dozens of black franchise owners accused the fast food giant of sending them on a ‘financial suicide mission’ by forcing them to open their restaurants in poor black neighborhoods.

‘McDonald’s proclaims a commitment to racial equality, profits from its black customers, yet places black franchisees in locations that are destined to fail,’ the complaint filed in Chicago said.

McDonald’s denied the claim, and the suit was dismissed in 2021. 

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