Lawsuit accuses McDonald's of discriminating against Black-owned media companies

Lawsuit accuses McDonald's of discriminating against Black-owned media companies
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A lawsuit filed Thursday against McDonald’s alleges that the fast-food giant has discriminated against Black-owned media companies in its allocation of advertising spending. 

The legal complaint, which was filed in California Superior Court by Entertainment Studios Networks Inc. and Weather Group LLC, argues that out of McDonald’s $1.6 billion in U.S. television advertising in 2019, less than $5 million, or roughly 0.31 percent, was spent on Black-owned media. 

The entertainment companies, both of which are owned by media mogul Byron Allen, who is Black, note in the lawsuit that this small portion of spending comes despite the fact that African Americans represent about 40 percent of fast food customers. 

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“In fact, McDonald’s spending on African American-owned media is less than half of what it pays its CEO, whose compensation in 2020 exceeded $10 million,” the lawsuit argues. 

The lawsuit goes on to say that since Entertainment Studios launched in 2009, McDonald’s “has refused to advertise” on its lifestyle networks, despite the fact that “during this same period, McDonald’s purchased significant advertising on similarly situated, white-owned networks.” 

“McDonald’s advertising budget for the African American tier is much smaller than the general market (i.e. white-owned media) budget which is not spent on African American-owned media,” the companies add in the complaint. 

“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 states. 

“In doing so, McDonald’s shut the door on Entertainment Studios for McDonald’s general market budget,” the companies add. “This is intentional racial stereotyping and discrimination.” 

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The lawsuit argues that after Allen in 2018 acquired the Weather Group, which includes The Weather Channel, “McDonald’s general market ad agency has not even solicited a bid from The Weather Channel for general market, while McDonald’s has advertised on similarly situated, white-owned networks in the general market tier.” 

“Television companies like Entertainment Studios and Weather Group depend on advertising revenue to survive,” the lawsuit states. “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.”

In response to the lawsuit, McDonald’s USA said in a statement to The Hill, “Together with our franchisees, we have doubled down on our relationships with diverse-owned partners.” 

“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,” the company said, adding, “We will review the complaint and respond accordingly.”

McDonald’s four-year plan, announced Thursday, includes a state commitment of “accelerating the allocation of advertising dollars to diverse-owned media companies, production houses and content creators.” 

In a press release announcing the changes, the restaurant giant said that in addition to increasing its investments in “diverse-owned media companies,” it plans to “forge multi-year partnerships with diverse-owned media” and “form an advisory board of external marketing and advertising subject matter experts dedicated to identifying the biggest barriers to economic opportunity facing diverse partners and putting collective resources behind new programs and initiatives to eliminate them.”