The lawsuit alleges that McDonald’s allocates only a small percentage of its marketing budget to Black-owned media companies, despite African-Americans comprising 40% of the food chain’s clientele.
A recently filed lawsuit alleges that McDonald’s discriminated against Black-owned media companies while allocating its advertising budget.
According to The Hill, the lawsuit was filed Thursday in California Superior Court by Entertainment Studios Inc. and Weather Group LLC, both of which are owned by Black media mogul Byron Allen.
The complaint alleges that, of the $1.6 billion McDonald’s spent on television advertisements in 2019, less than $5 million went towards Black-owned media. This is in spite of African-Americans accounting for more than 40% of McDonald’s customers in the United States.
“In fact, McDonald’s spending on African-American-owned media is less than half of what it pays CEO, whose compensation in 2020 exceeded $10 million,” the lawsuit states.
The lawsuit claims that, since Entertainment Studios was launched in 2009, McDonald’s has repeatedly refused to purchase advertising space, despite that, “during the same time period, McDonald’s purchased significant advertising on similarly situated, white-owned networks.”
“This structural racism is pernicious and deplorable in its own right, but McDonald’s adds insult to injury by falsely labeling Entertainment Studios as an African America media company that produces content for African American audiences,” the lawsuit says.
“In doing so, McDonald’s shut the door on Entertainment Studios for McDonald’s general marketing budget,” it adds. “This is intentional racial stereotyping and discrimination.”
“Television companies like Entertainment Studios and Weather Group depend on advertising revenue to survive,” the lawsuit says. “It is the lifeblood of their business. By depriving access to one of the largest advertising budgets in the world, McDonald’s discriminatory treatment of Entertainment Studios and Weather Group has caused, and continues to cause, significant damage.”
McDonald’s sent The Hill a statement in which the company reaffirmed its commitment to both Black franchisees and diverse markets.
“Together with our franchisees, we have doubled down on our relationships with diverse-owned partners,” McDonald’s wrote.
“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,” McDonald’s said. “We will review the complaint and respond accordingly.”
Byron Allen, the owner of both Entertainment Studios and the Weather Group, said that McDonald’s effectively profits off its Black customers while giving little back to the same community.
“This is about economic inclusion of African American-owned businesses in the U.S. economy,” Allen said in a 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.”
As LegalReader reported in March 2020, Allen had previously tried to sue Comcast for refusing to carry his channels; Allen also claimed discrimination, although his complaint was dismissed by the United States Supreme Court.