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<\/p>\nA new $10 billion lawsuit alleges McDonalds engaged in racial\u00a0discrimination by refusing to advertise on the networks of Entertainment Studios and Weather Group, which are owned by Black media entrepreneur Byron Allen and includes networks such as the Weather Channel.<\/p>\n
The lawsuit, filed Thursday in Los Angeles Superior Court, alleges the fast-food chain has a “tiered advertising structure that differentiates on the basis of race,” according to a press release that accompanied the complaint.\u00a0The company is seeking $10 billion in damages and wants the case tried in front of a jury.<\/p>\n
The complaint alleges that while most of McDonald’s advertising budget is allocated for the “general market,” it maintains a “separate ‘African American’ tier, run by a different advertising company, “with\u00a0a much smaller budget and less-favorable pricing and other terms.”\u00a0<\/p>\n
How much smaller? “McDonald’s\u00a0President and CEO\u00a0Chris Kempczinski\u00a0makes approximately\u00a0$11 million\u00a0per year, which is more than double what\u00a0McDonald’s\u00a0spends per year on all of Black-owned media combined,” Allen’s networks say.<\/p>\n
USA TODAY has reached out to both McDonald’s and Allen’s companies for comment.<\/p>\n
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"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," Entertainment Studios owner Byron Allen said. "The economic exclusion must stop immediately." (Photo: Robert Hanashiro\/USA TODAY)<\/span><\/p>\n In its complaint, Entertainment Studios says it was never asked to respond for requests for proposals from the white-owned ad agency that allocates the general market budget, shutting them out of the opportunity to win its business. “Instead, Entertainment Studios was forced to compete with African American media companies in the less-favorable African American tier.”<\/p>\n In addition, it alleges\u00a0McDonald’s has refused to advertise on the 12 networks of Entertainment Studios or even the Weather Channel which Allen bought in 2018 and does not target any ethnic group.<\/p>\n The complaint notes that Allen personally took the issue of McDonald’s discriminatory ad practices up with its chief marketing officer \u2013\u00a0to no avail.<\/p>\n “This is about economic inclusion of African American-owned businesses in the U.S. economy,” said Allen in a statement that accompanied the lawsuit. “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.”\u00a0<\/p>\n On Thursday, the same day the lawsuit was filed, McDonald’s announced it was allocating more ad dollars to diverse-owned media and embarking on multi-year partnerships with them.<\/p>\n “McDonald\u2019s total investment in diverse-owned partners \u2013 including Black,\u00a0Hispanic, Asian Pacific American, Women and LGBTQ-owned platforms \u2013\u00a0will more than double, moving from 4% to 10% of national advertising spend between 2021 and 2024,” it said in a press release.\u00a0“Spend with Black-owned properties, specifically, will increase from 2% to 5% of national advertising spend over this time period.”<\/p>\n