Byron Allen sues McDonald's for $10 billion alleging racial discrimination
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Media mogul Byron Allen is suing McDonald's for racial discrimination and is seeking $10 billion in damages.
Allen Media Group divisions Entertainment Studios Networks, Inc. — parent owner of theGrio — and Weather Group, LLC filed a lawsuit on Thursday, accusing McDonald's of racial discrimination. The filing alleges that McDonald's discriminated against Allen's media entities by refusing contracts and exhibiting a pattern of racial stereotyping.
Read More: Byron Allen push leads to IPG Mediabrands committing at least 5% to Black-owned media
Media mogul Byron Allen (Photo by Getty Images)
Despite McDonald's having an annual revenue of $100 billion, the lawsuit contends that the leading global food seller created an "African American" tier and gave smaller budgets and less-favorable pricing to Black media despite appealing to the general market. The suit charges that the fast-food giant refused to advertise on Allen's digital outlets but readily did so on other white platforms.
McDonald's has a budget of $1.6 billion to spend on advertising. However, Black-owned sites only received a paltry $5 million or 0.3% of these funds according to the suit. This is a sum that is also dwarfed by the approximate $11 million salary of McDonald's President and CEO Chris Kempczinski.
"This is about economic inclusion of African American-owned businesses in the U.S. economy," said Allen, Founder/Chairman/CEO of Allen Media Group. "McDonald's takes billions from African American consumers and gives almost nothing back. The biggest trade deficit in America is the trade deficit between White corporate America and Black America, and McDonald's is guilty of perpetuating this disparity. The economic exclusion must stop immediately."
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Allen is also a signee to a letter directed to Kempczinski over the apparent snubbing by McDonald's. Earl "Butch" Graves Jr. (President & CEO – Black Enterprise), Roland Martin (CEO, Nu Vision Media, Inc), Munson Steed (CEO of Rolling Out), Todd F. Brown PMP (Founder, Urban Edge Networks HBCU League Pass), and Junior Bridgeman of Ebony Media are the other high-profile business leaders and entrepreneurs who are taking McDonald's to task for their practices.
It charges that despite McDonald's being an ever present part of the culture and worth billions, it "has categorically discriminated against Black-owned media companies in its advertising spend. Chris, the very definition of systemic racism is when you are ignored, excluded and you do not have true economic inclusion. Black-owned media companies have become extinct from the lack of ad support from companies like McDonald's."
The letter further notes that Black executives raised this issue "of economic exclusion and systemic racism" to then McDonald's Chief Marketing Officer. However, "the issue was ignored and not corrected."
"We are not surprised that both Black employees/executives as well as the Black franchisees are suing McDonald's for racial discrimination and unfair treatment. And now you are being sued for $10 billion by Black-owned media. Why?? Because we all firmly believe the culture at McDonald's is racist and very toxic," the letter continues.
Media mogul Byron Allen, owner of theGrio, is launching Local Now, a new streaming service that will deliver area news to its users. (Photo by Michele Thomas)
"To be clear, this concerns Black-owned media and not minority-owned media, because "minority" includes White women and large corporations like McDonald's often hide behind and tout their minority/diversity records while continuing not to do business with Black-owned media companies."
The letter ends with a demand that Kempczinski resign effective immediately "if you continue to hold the position that Black-owned media does not deserve meaningful economic inclusion and we are not worth meeting with."
McDonald's Corporation reached out to theGrio with a statement about their desire to increase spending in diverse owned media and reaction to the lawsuit.
"Together with our Owner/Operators, 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. Once we receive the complaint, we will review and respond accordingly."
Additionally, McDonald's shared their announcement about a four-year commitment to Increase national investments in diverse-owned companies from 4% to 10%, forge multi-year partnerships with diverse-owned media and production companies, content creators, and influencers and form an advisory board of external marketing and advertising subject matter experts.
Allen's suit is just the latest show of commitment by him to hold entities accountable. Earlier this month, Allen called for IPG Mediabrands to commit at least 5% to Black-owned media. The leading ad agency vowed to fulfill this pledge by 2023.
Allen's efforts were also successful in April after he called out General Motors in an ad to increase their advertising dollars.
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