Media entrepreneur Byron Allen sued McDonald's—again. This time, he is alleging that the Chicago-based hamburger chain is not on track to meet a 2021 commitment to spend more of its advertising budget with Black-owned media companies.
McDonald's announced plans in May 2021 to increase its spending with Black-owned media and production properties to 5% from 2%. (You can read the lawsuit below.)
The lawsuit says that Allen's companies, which include properties such as The Weather Channel and Justice Central, represent 90% of the Black-owned advertising market in the country. As such, McDonald's would need to spend more than $50 million annually advertising with Allen's properties to meet its goal, according to the lawsuit. However, McDonald's allegedly only proposed spending “a tiny fraction of its advertising budget” with Allen's companies.
The lawsuit alleges that McDonald's plan was a “self-serving ploy to cast itself as racially sensitive and sympathetic” while misleading the public.
“McDonald’s had no intent to fulfill its commitment,” the lawsuit said. “Its ‘plan’ was and is a fraud.”
The company said in a statement that it will defend itself against Allen’s allegations and “will not be coerced by these in terrorem tactics.”
“While McDonald’s continues to invest in diverse initiatives to create real change in communities, Byron Allen files baseless lawsuits as part of a public smear campaign against our company to try to line his pockets,” it said. “This latest action is straight from his standard litigation playbook, cherry picking allegations to create a false and misleading narrative that is inconsistent with the facts and calculated to distract from the markedly low ratings and reach of his media properties.”
McDonald's advertising spend commitment was part of a broader push to improve diversity and inclusion that the fast-food chain made in recent years. It has also promised to diversify supplier and franchisee ranks, and tied some executive compensation to meeting diversity goals.
The company also said that in the past two years, it has invested millions of dollars with Black-owned media companies as part of its pledge.
The lawsuit was filed on May 4 in California state court in Los Angeles. It asks the court to require that McDonald's comply with its pledge of spending at least 5% of its advertising budget on Black-owned media annually. It also demands an estimated $100 million in compensation for McDonald's alleged “fraudulent and false promises.”
Allen has been sparring with McDonald's for years, and has another discrimination lawsuit against the company pending. Last month, he took out a full-page ad in the Chicago Tribune soliciting support from activist investor Carl Icahn in his fight against “blatant racism” at McDonald's.
