A federal court judge in California has reversed a ruling dismissing media mogul Byron Allen’s $10 billion lawsuit charging that McDonald’s discriminated against Black-owned media in buying advertising.
In a new order entered Friday (January 21), Judge Fernando Olguin denied McDonald’s motion to dismiss without prejudice and said McDonald’s has to answer Allen’s complaint by January 27.
The judge said the ruling dismissing the case relied on materials that shouldn’t have been considered by the court.
According to the lawsuit, originally filed in May, McDonald’s intentionally discriminated against Allen’s Entertainment Studios and Weather Group through a pattern of racial stereotyping and refusals to contract.
“We look forward to presenting our enormous evidence in court, which will prove the systemic racism at McDonald’s,” Allen said. “And I firmly believe the board at McDonald’s should fire CEO Chris Kempczinski immediately.
Allen’s lawsuit says that McDonald’s buys most of its advertising as part of a general market group and has a separate tier for Black businesses with a smaller budget and less favorable pricing.
About the time the lawsuit was filed, McDonald’s announced that it planned to increase the ad dollars it spends with diverse-owned media companies from 4% currently to 10% by 2024. Spending with Black-owned properties will increase from 2% to 5%. ■
Broadcasting & Cable Newsletter
The smarter way to stay on top of broadcasting and cable industry. Sign up below
Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.