McDonald’s is being sued for racial discrimination for allegedly refusing to advertise on the networks of Entertainment Studios Networks Inc. and Weather Group LLC, which are owned by Black comedian-turned-media mogul Byron Allen.
“This case involves both a racially discriminatory contracting process and refusals to advertise on plaintiffs’ networks on the basis of race,” the suit filed Thursday in Los Angeles Superior Court alleges.
The suit, which also alleges civil rights violations, seeks unspecified compensatory and punitive damages.
McDonald’s issued a statement regarding the suit.
“Once we receive the complaint, we will review and respond accordingly,” the statement reads. “Together with our franchisees, we have doubled down on our relationships with diverse-owned partners. This includes increasing our spending with diverse-owned media from 4% to 10% and with Black-owned media from 2% to 5% of total national advertising over the next four years.”
With Blacks representing about 40% of fast-food customers, McDonald’s restaurants earn billions of dollars each year from such consumers, the suit states.
“This money is taken out of the African American community, but not reinvested in any meaningful way,” the complaint alleges.
McDonald’s has refused to advertise on Entertainment Studios’ lifestyle networks since they were launched in 2009, but during the same time period bought significant advertising on white-owned networks, according to the lawsuit.
“This is intentional racial stereotyping and discrimination,” the complaint alleges. “McDonald’s, like much of corporate America these days, publicly touts its commitment to diversity and inclusion, but this is nothing more than empty rhetoric as shown by the racial discrimination in contracting herein.”
According to the lawsuit, McDonald has a primary advertising tier, referred to as “general market,” that constitutes the vast majority of the company’s advertising budget and a separate “African American” tier that has a much smaller budget and less-favorable pricing and other terms.
According to the lawsuit, McDonald’s relegated Entertainment Studios to the less-favorable tier even though the companies own and operate television networks that have general market appeal and do not specifically target Black audiences.
Entertainment Studios owns and operates 12 high-definition television networks that are carried by more than 60 multi-channel video programming distributors, including Comcast, AT&T U-Verse, Charter/Spectrum, DISH Network, DirecTV, AT&T Now and Verizon FIOS. The networks feature lifestyle content with general audience appeal and are distributed to more than 180 million cumulative subscribers in all 50 states, according to a company statement.
In 2018, Allen acquired Weather Group, which owns and operates the cable news network The Weather Channel and the streaming service Local Now.
“This is about economic inclusion of African American-owned businesses in the U.S. economy,” Allen said in a prepared statement. “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.”
Allen founded Allen Media Group/Entertainment Studios in 1993. Headquartered in Los Angeles, it has offices in New York, Chicago, Atlanta and Raleigh and owns 23 ABC-NBC-CBS-FOX network affiliate broadcast television stations in 19 U.S. markets in addition to the dozen 24-hour HD TV networks.