By: Christopher Palmeri and Kamaron Leach
Two companies controlled by Byron Allen, the onetime stand-up comic who’s built one of the largest closely held media businesses in the U.S., sued McDonald’s Corp., claiming the fast-food giant is discriminating against Black-owned businesses.
The suit alleges the restaurant company has refused to advertise on some of Allen’s networks, although it does so on other White-owned channels. It says McDonald’s main ad agency hasn’t solicited bids for spots on the Weather Channel, the cable network Allen acquired in 2018. The suit is seeking $10 billion in damages.
McDonald’s spends less than $5 million, or 0.3% of its annual $1.6 billion advertising budget, with Black-owned media companies, according to the suit. The TV producer and entrepreneur, who is African-American, has said advertisers should spend at least 5% of their budgets with companies like his.
Earlier Thursday, McDonald’s released a statement saying it would more than double its national advertising spending on minority- and women-owned media businesses to 10% from 4% between 2021 and 2024. Spending with Black-owned properties will rise to 5% from 2% over the period.
Allen declined to comment on McDonald’s statement.
“We have doubled down on our relationships with diverse-owned partners,” the company said in a email later. “Once we receive the complaint, we will review and respond accordingly.”
Allen’s push is similar to one he launched in March against General Motors Co. The automotive giant said it plans to spend as much as 8% of its budget on Black-owned media by 2025, up from just 1% last year.