A federal judge ruled that media mogul Byron Allen’s $10 billion racial discrimination lawsuit against McDonald’s can proceed.
Media mogul Byron Allen accused McDonald’s of “racial stereotyping” by not advertising with the Black press.
Now, United States District Court Judge Fernando M. Olguin says that Allen’s $10 billion discrimination claim against the fast-food giant can proceed, calling the suit “a close call” that should get addressed by a jury.
In a 25-page order, the federal judge said, “At a minimum, this is the type of case where ‘the trial court is permitted, in its discretion, to deny even a well-supported motion for summary judgement, if it believes the case will benefit from a full hearing.’”
Chris Pandolfo of Fox Business reported, “The lawsuit alleges that McDonald’s violated federal and California civil rights laws by deeming Allen’s networks ineligible for the ‘vast majority’ of its advertising dollars.
“Allen accused McDonald’s of relegating his Entertainment Studios Networks, Inc. and Weather Group, LLC, which owns the Weather Channel, to an ‘African American tier’ with a separate, Black-focused ad agency and much smaller ad budget, depriving them of tens of millions of dollars of annual revenue.
“The lawsuit claims that Allen and his companies had requested to be clients for McDonald’s larger advertising arm but were relegated to the smaller Black-only agency because Allen is Black, which Entertainment Studios called ‘blatant and pernicious discrimination.’”
In the lawsuit, Allen claims 40 percent of McDonald’s customers are Black.
However, the suit claims that out of a $1.6 billion advertising budget, McDonald’s spent less than $5 million with the Black press and Black-owned media.
Allen filed his lawsuit the day after McDonald’s vowed to increase national spending with the Black press from two percent to five percent by 2024.
McDonald’s also promised to increase spending with Hispanic, Asian, women and LGBTQ+ owned media entities.
Allen said, “We have overwhelming evidence against McDonald’s—who has been sued by its Black executives, Black franchisees, and their global head of security—for racial discrimination. It is time for the McDonald’s Board of Directors, stockholders, and civil rights organizations nationwide to call for the resignation of CEO Chris Kempczinski, who was caught sending racist text messages about Black and Hispanic people.”
Despite the lawsuit, McDonald’s said that the federal judge’s decision simply meant that neither side had met the requirements for dismissal of the suit at the present time.
McDonald’s said, “We are prepared to show that this case is utterly baseless. McDonald’s invested in media properties that aligned with the company’s business strategy and, like any other rational business, declined to invest in those that had low ratings or failed to reach the company’s target audience.”
Allen, a media veteran, began his distinguished career as a comedian before transitioning into an entrepreneur and executive.
According to the Allen Media Group website, “In 1993, comedian, producer, media mogul, and philanthropist Byron Allen founded his Los Angeles-based global media company, Entertainment Studios. The company has additional offices in New York, Chicago, Atlanta and Raleigh. Allen now owns one of the largest cable network portfolios in the industry featuring ten, 24-hour HD networks (The Weather Channel, Comedy.TV, Cars.TV, ES.TV, JusticeCentral.TV, MyDestination.TV,Pets.TV, Recipe.TV, Local.NOW, and The Weather Channel en Espanol. The company continues to produce and (distribute) Emmy Award-winning and nominated shows, while also selling advertising for 43 broadcast and cable television programs. Entertainment Studios has one of largest libraries of family and advertiser-friendly lifestyle content in the world.”
Additionally, Entertainment Studios has produced major motion pictures like “Hostiles,” “Chappaquiddick” and “The Hurricane Heist.”
According to the Allen Media Group website, “In 2016, Entertainment Studios purchased TheGrio, a digital, video-centric news platform devoted to providing compelling entertainment, news and lifestyle content for African-Americans. TheGrio features aggregated and original video packages, news articles, and blogs on topics that include breaking news, politics, health, business, and entertainment and remains focused on curating engaging digital content and currently has more than 20 million annual visitors.”
Via TheGrio, Allen has found success broadcasting football and basketball games featuring Historically Black Colleges and Universities (HBCUs).
Allen, who was inducted into the Broadcast and Cable’s Broadcast Hall of Fame in October 2019 said, “Entertainment Studios will continue to aggressively look for other opportunities to grow our global media company through strategic acquisitions.”
One of the biggest past acquisitions was The Weather Channel, purchase in the spring of 2018.
The Allen Media Group website said, “In 2019, Byron Allen formed Allen Media Broadcasting and began building the broadcast station group which includes four, “BIG 4” stations. In February 2020, Allen Media Broadcasting acquired an additional 11 stations from the purchase of USA Television. The USA TV portfolio acquisition follows several recent transformative transactions executed by Byron Allen. In August 2019, Mr. Allen personally partnered with Sinclair Broadcast Group to acquire 21 Regional Sports Networks (RSNs) from Walt Disney/FOX corporation for $10.6 billion. In July 2019, Byron Allen acquired Bayou City Broadcasting, which included 4 television stations.”
Although Allen has never strayed away from the Black community when it comes to his media entities, he has never limited his reach to the Black community.
Therefore, McDonald’s relegating his companies to Black media does not fully represent his communications empire.
Regardless, many Black-owned media companies have long criticized corporate America of discrimination against them when they pass out advertising dollars.
Journalist Roland S. Martin has been a long critic of corporate America not advertising with the Black press.
Therefore, many Black media companies are eagerly anticipating the results of Allen’s lawsuit against McDonald’s.
