One month before the case was to go to trial, McDonald’s Corporation settled with media mogul Bryon Allen, who in 2021 sued the fast-food giant, alleging it discriminated against Black-owned media in advertising spending.
As chief of Allen Media Group, Allen argued that McDonald’s, whose headquarters is based in Chicago, bought discriminatory ad time on media outlets that target Black viewers based on a set-aside for “the African American tier” of outlets.
Allen’s suit argued that the alleged practice was damaging to Black media owners because that tier had more limited dollars available than the general tier that McDonald’s used for advertising with networks and other media that reach broad-based audiences.
Black consumers reportedly make up 40 percent of McDonald’s U.S. sales, which in 2020 was over $10 billion.
According to Allen’s lawsuit, the advertising budget for McDonald’s is $1.6 billion. However, Black outlets only receive a paltry $5 million in advertising dollars despite McDonald’s using the Black community for cultural influence, according to the lawsuit that was first reported by Grio.
McDonald denied the allegations, and the case was set to go to trial July 15 after years of pre-trial discovery proceedings. But last week, McDonald’s and the Allen Media Group announced a settlement, whose terms were not disclosed.
In a joint statement issued late Friday, McDonald’s said, “We are pleased that Mr. Allen has come to appreciate McDonald’s unwavering commitment to inclusion, and has agreed to refocus his energies on a mutually beneficial commercial arrangement that is consistent with other McDonald’s supplier relationships,” McDonald’s USA said in a statement.
“Our company’s unique three-legged stool model relies on mutual respect, and we look forward to ESN’s contributions to the betterment of our system.”
Allen told Variety, “We are pleased to find a resolution that maintains our business relationship. During the course of this litigation, many of our preconceptions have been clarified, and we acknowledge McDonald’s commitment to investing in Black-owned media properties and increasing access to opportunity. Our differences are behind us, and we look forward to working together.”
After the lawsuit was filed against McDonald’s, Allen sent a letter to McDonald’s CEO Chris Kempczinski. The letter, which demanded the corporation to stop discriminating against Black-owned media, was signed by Earl “Butch” Graves Jr. (President & CEO – Black Enterprise), Roland Martin (CEO, Nu Vision Media, Inc), Munson Steed (CEO of Rolling Out), Todd F. Brown PMP (Founder, Urban Edge Networks HBCU League Pass) and Ebony Media’s Junior Bridgeman, who died in March.
It’s unclear whether the settlement requires McDonald’s to change its ad spending to Black-owned media.
In 2021, McDonald’s pledged to increase its national ad spend with Black-owned media from 2 percent to 5 percent by 2024.
After the announcement, Allen Media Group stated that they submitted a proposal for $30 Million in ad spend to McDonald’s, which was rejected by the company. McDonald’s countered but was only willing to spend a fraction of the proposed amount. That’s when Allen sued McDonald’s for $10 billion, arguing that McDonald’s given their specific estimates in the press release, cannot hit their spending target without Allen.
For decades, Blacks across the country have frequented McDonald’s. The fast-food giant in the 1980s and 90s aggressively courted Black consumers with television and print advertisements that featured them eating their food.
Allen in the past has filed discrimination lawsuits against Comcast, DirecTV, and Charter Communications.
In 2020, Allen’s suit against Comcast went to the Supreme Court after battling through the court system for five years. Allen claimed racial discrimination when a carriage deal between the companies fell through. The Supreme Court dismissed the case, stating Allen needed to prove race was the sole reason for the failed negotiations as opposed to one element. Comcast chose to settle after the case was sent back to a lower court, The Los Angeles Times reports.
A former talk show host who started his media empire more than 30 years ago, Allen’s Allen Media Group owns numerous lifestyle channels, the Weather Channel and digital outlets, including The Grio and HBCU Go.
In the past 10 years, Allen has invested in TV stations. Earlier this month, Allen consulted with investment bank Moelis & Co. to help him sell the collection of 28 network affiliate stations in medium and small markets across the country.