Lawsuit: McDonald’s advertising budget discriminates against black-owned media companies

The lawsuit alleges that McDonald’s only gave a small percentage of its marketing budget to black-owned media companies, even though 40% of the grocery chain’s customers are African American.

A recent lawsuit alleges that McDonald’s discriminated against black-owned media companies in the allocation of 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 owned by black media mogul Byron Allen.

The complaint alleges that of the $ 1.6 billion McDonald’s spent on television advertising in 2019, less than $ 5 million went to black media. This is despite the fact that African Americans make up 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 that of the CEO, whose compensation exceeded $ 10 million in 2020,” the lawsuit said.

McDonald’s sign. Image via Flickr via Wikimedia Commons / User: Kenny Louie from Vancouver, Canada. (CCA-BY-2.0).

The lawsuit alleges that McDonald’s has repeatedly refused to purchase advertising space since it launched Entertainment Studios in 2009, despite “McDonald’s purchasing significant white-owned advertising on similar networks over the same period.”

“This structural racism is inherently damaging and unfortunate, but McDonald’s insults the injury by falsely identifying Entertainment Studios as an African-American media company that produces content for African-American audiences,” the lawsuit said.

“With that, McDonald’s has closed the door to Entertainment Studios for McDonald’s general marketing budget,” he added. “This is intentional racial stereotyping and discrimination.”

“Television companies like Entertainment Studios and Weather Group rely on advertising revenue to survive,” the lawsuit said. “It is the lifeblood of their business. By blocking 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 reiterating its commitment to both black franchisees and various markets.

“Together with our franchisees, we have doubled our relationships with partners in diverse ownership,” wrote McDonald’s.

“This includes increasing our spending on multi-owned media from 4% to 10% and black-owned media from 2% to 5% of total national advertising over the next four years,” said McDonald’s. “We will look into the complaint and respond accordingly.”

Byron Allen, the owner of Entertainment Studios and the Weather Group, said McDonald’s effectively benefits from its Black customers and gives little back to the same community.

“This is about the economic integration of African American-owned companies into the US economy,” Allen said in a statement. “McDonald’s takes billions of African American consumers and gives almost nothing in return. The largest trade deficit in America is the trade deficit between White Corporate America and Black America, and McDonald’s is guilty of maintaining that inequality. Economic exclusion must stop immediately. “

As LegalReader reported in March 2020, Allen had previously tried to sue Comcast for refusing to broadcast its channels. Allen also alleged discrimination, although his complaint was dismissed by the United States Supreme Court.

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The lawsuit accuses McDonald’s of discriminating against black-owned media companies

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