According to Deadline, The Byron Allen Media Group (AMG) has sued McDonald’s Corp. for $10 billion in damages and alleges that the company has discriminated against Black-owned media.
This comes as the high-profile businessman continues to come for big corporations who fail to give Black-owned media a fair shot when it comes to the distribution of massive advertising budgets.
Filed in the Superior Court of California in Los Angeles, the lawsuit accuses the fast-food giant of both alleged racial stereotyping and refusing to contract with AMG’s Entertainment Studios and Weather Group in violation of federal and state law.
The suit states that while African Americans represent about 40 percent of McDonald’s U.S. sales, African American-owned media receives less than $5 million out of its circulation of $1.6 billion in annual television advertising.
In the lawsuit, AMG also alleges that the corporation’s refusal to contract is because of racial stereotyping which is the result of an advertising structure that includes a separate “African American” tier which has a smaller budget and less favorable pricing and other terms in comparison to a larger “general market” tier.
Per Allen, the structure is a means of “separate and unequal tracks for Black-owned media companies to earn advertising revenue.”
He also notes that the television networks owned and operated by AMG don’t necessarily have general market appeal nor do they specifically target African American audiences. In the suit, he claims that McDonald’s has refused to advertise on The Weather Channel under its “general tier” since Allen acquired the network back in 2018.
On the other hand, McDonald’s is standing on its commitment to relationships with diverse-owned partners.
“Together with our Owner/Operators, we have doubled down on our relationships with diverse-owned partners,” said the company in a statement. “This includes increasing our spend 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. Once we receive the complaint, we will review and respond accordingly.”
The lawsuit includes a letter to McDonald’s CEO, Chris Kempczinski, where Allen and other Black media owners urge the company to commit five to 15 percent of its advertising and marketing spend to Black-owned media.