McDonald’s became a target of a major lawsuit when two companies owned by media entrepreneur Byron Allen sued the fast-food joint in 2021 for $10 billion. The lawsuit is grounded on racial discrimination allegations against the food joint, which failed to work sufficiently with black-owned media outlets.
Additionally, the lawsuit alleged that 40% of McD’s customer base comprises black people but the food giant devoted less than five million dollars of its advertisement budget to black-owned media. The Golden Arches alleged that it desired to increase spending in diverse-owned media.
However, as per the latest updates, District Judge Fernando M. Olguin ruled that Byron Allen’s lawsuit could proceed to trial as a jury must address the claims. Judge Olguin wrote in a 25-page order,
“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 judgment, if it believes the case will benefit from a full hearing.”
Byron Allen claimed that McDonald’s excluded his Entertainment Studios and Weather Channel from its general-market ad budget, relegating them to a smaller "African American tier" with limited funds, costing the outlets millions in potential annual revenue.
According to Variety, Allen also alleged that there was strong evidence of racial discrimination against the food joint, citing lawsuits from Black executives, franchisees, and its global head of security. He called for the resignation of CEO, Chris Kempczinski, accusing him of sending racist text messages about Black and Hispanic people.
McD, in a statement, said the case was baseless as it had made investments in the media houses that aligned with its strategies, and not those that could not meet its target audience.
A deeper look into Byron Allen’s lawsuit against McDonald’s
The case is based on claims that McDonald’s employs a multi-tiered advertising system, with its larger general-market ad budget managed by OMD Worldwide which primarily benefits white-owned media. Contrary to this, another ad agency, Burrell handled a smaller budget targetting Black audiences.
Byron Allen’s Entertainment Studios and Weather Channel were allegedly confined to this secondary tier solely due to his ownership, despite producing general-content programming.
Allen Media Group cited testimony from its chief revenue officer, Darren Galatt, who stated they were repeatedly directed to work with Burrell instead of OMD, even though their content wasn’t exclusively Black-focused.
According to The Hollywood Reporter, internal emails from OMD executives appeared to reinforce this policy, indicating that McDonald’s advertising decisions for Byron Allen's companies would not go through OMD. Similar testimony came from ReachTV’s Lynnwood Bibbens, who reported being funneled through Burrell despite his network's general content.
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The court found sufficient evidence to support the claim that Byron Allen’s companies were unfairly relegated to the smaller ad tier. This follows a related lawsuit in February 2024, where McDonald’s avoided liability over claims it failed to meet its pledge to increase ad spending with Black-owned media, with the court granting the company more time to fulfill its promise.
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