Byron Allen Takes McDonald's to Court Over Ad Dollars
Diehard fans of old school stand-up comedy will recognize Byron Allen. We’re talking all the way back to the 70s. Eighteen-year-old Allen got a preternaturally early foot into the comedy scene when he became the youngest comedian to perform on The Tonight Show Starring Johnny Carson. He also found his love for TV in the process and has since been heavily involved with all number of television ventures.
Even for those of you who don’t recognize him by name, you’ll be familiar with the work he’s been involved with. He founded Entertainment Studios, one of the largest independent producers and distributors of film and television. Among the various comedy shows, game shows, and talk shows that the studio puts out, it also now owns The Weather Channel.
But lately, Allen has been taking on an opponent in an entirely different industry: McDonald’s. How did he end up in court against the burger giant? Let’s rewind.
Byron and the Burger Giant
Allen's conglomerate of media properties (known as the Allen Media Group) includes various networks that offer lifestyle programming. These networks, launched around 2009, feature content such as courtroom dramas, comedies, and travel, food, pet, and automotive shows. Allen Media Group targets a general audience rather than a specific demographic group. In 2018, Allen acquired the Weather Group, which owns The Weather Channel.
On the other side, McDonald's spends hundreds of millions of dollars annually on national media advertising. McDonald's works with several advertising agencies to plan and buy advertising on television programs. Two key agencies in this case are OMD Worldwide, which is responsible for evaluating general market media advertising opportunities, and Burrell Communications, tasked with targeting the African American consumer market.
Complaint and Initial Dismissal
A few years ago, Byron Allen's companies sued McDonald's for $100 million, alleging fraud and false promises regarding McDonald's commitment to increase spending with black-owned media. They alleged that McDonald's relegated them to Burrell, limiting their access to the larger general market advertising budget due to racial discrimination.
In their court filings, Entertainment Studios outlines the interactions between themselves and these agencies, highlighting their claims that they were unfairly restricted to a less favorable advertising tier because of their African American ownership. The lawsuit was based on a 2021 press release where McDonald's pledged to boost its diversity spend, including increasing its advertising with black-owned media from 2% to 5% by 2024. Allen's companies, which own 90% of black-owned media in the U.S., submitted a $30 million proposal to McDonald's, which was largely rejected, prompting the lawsuit.
On February 2, 2024, the case was dismissed by California Superior Court Judge Mel Red Recana, who deemed it premature since McDonald's still had until the end of 2024 to fulfill its commitment. McDonald's stated that it still planned to meet its pledge, but Allen's legal team was skeptical and appealed the dismissal to federal court, insisting the company has not yet met its obligations.
Revived Suit Will Go to Trial
Last week, U.S. District Judge Fernando M. Olguin ruled that the lawsuit can proceed to trial. The judge described the decision to allow the case to proceed as a “close call,” emphasizing that the claims would benefit from a full hearing by a jury. He noted that the trial court has the discretion to deny a well-supported motion for summary judgment if it believes the case merits a comprehensive examination.
Allen welcomed the judge’s decision, asserting that there is overwhelming evidence against McDonald’s, which has faced similar allegations of racial discrimination from Black executives, franchisees, and its global head of security. He has called for the resignation of McDonald’s CEO Chris Kempczinski, citing alleged racist text messages about Black and Hispanic people.
In response, McDonald’s states that its advertising investments align with its business strategy and target audiences. The company highlighted its commitment to diversity, noting plans to increase its national ad spending on Black-owned media from 2% to 5% by 2024, alongside increased investments in Hispanic, Asian-American, women, and LGBTQ-owned platforms.
A spokesperson for the burger giant said: “We are prepared to show that this case is utterly baseless. McDonald’s invested in media properties that aligned with the company’s business strategy and, like any other rational business, declined to invest in those that had low ratings or failed to reach the company’s target audiences.”
The trial will provide a platform for both parties to present their arguments, with Allen seeking to demonstrate systemic racial biases in McDonald’s advertising practices and the fast-food chain defending its strategic business decisions. As the case moves forward, it underscores ongoing discussions about corporate responsibility and diversity in advertising.
Related Resources:
- Florida Jury Awards 8-Year-Old $800,000 for McNugget Burn (FindLaw's Law and Daily Life)
- The McDonald’s Hot Coffee Case: Separating Fact From Fiction (FindLaw's Learn About the Law)
- Advertising Do's and Don'ts (FindLaw's Learn About the Law)
