© Reuters. FILE PHOTO: McDonald’s restaurant logo is seen as McDonald’s Corp. reports fourth quarter earnings, in Arlington, Virginia, USA, January 27, 2022. REUTERS / Joshua Roberts / File Photo
By Jonathan Stempel
(Reuters) – McDonald’s Corp (NYSE:) has been ordered by a US judge to defend against media entrepreneur Byron Allen’s $10 billion lawsuit alleging the fast-food chain is “racially prejudiced.” by not advertising with black-owned media.
In a decision Friday, US District Judge Fernando Olguin in Los Angeles said Allen could try to prove that McDonald’s violated federal and California civil rights laws by arguing that his networks did not eligible for “most” of its advertising dollars.
Allen accused McDonald’s of downgrading Entertainment Studios Networks Inc and Weather Group LLC, which owns the Weather Channel, to “African-American” levels with a separate ad agency and much smaller advertising budgets, stripping them away. tens of millions of dollars in their annual revenue. .
While not ruling on the merits, Olguin cited allegations that Entertainment Studios since its founding in 2009 had repeatedly and unsuccessfully tried to get a contract from McDonald’s, whose corporate culture “analyses” racism” harmed Allen.
“Taken together and construed in the plaintiffs best interests,” Olguin writes, “the plaintiffs allege the facts are sufficient to support inferences about intentional discrimination.”
In a statement Tuesday, McDonald’s attorney Loretta Lynch asserted that the Chicago-based company views the lawsuit as “about revenue, not race” and believes the evidence will show no discrimination discrimination.
“The plaintiffs’ baseless allegations ignore both McDonald’s legitimate business reasons for not investing more in their channels and the company’s long-standing business relationship with many,” she said. other diversified owned partners.
Allen, in a statement, said the case was “about the economic inclusion of African-American businesses in the U.S. economy. McDonald’s takes billions of dollars from African-American consumers and mostly like giving nothing back.”
The lawsuit says Blacks represent 40% of fast food customers, but McDonald’s spent just 0.3% of its $1.6 billion advertising budget in 2019 on owned media. of the Blacks.
In May 2021, McDonald’s pledged to increase national ad spend on black-owned media to 5% from 2% in 2024.
Olguin dismissed an earlier version of Allen’s lawsuit last November, finding no evidence of intentional and intentional discrimination against his companies.
The lawsuit is Entertainment Studios Networks Inc et al v McDonald’s Corp, US District Court, Central District of California, number 21-04972.