Media mogul Byron Allen, founder of Allen Media Group, has reached a confidential settlement with McDonald’s Corporation in his $10 billion lawsuit alleging racial discrimination in the company’s TV advertising practices. The agreement, announced jointly by both parties, brings an end to a legal battle that had been set to go to trial in Los Angeles federal court next month.
Allen filed the lawsuit in 2021, and in it he accused McDonald’s of excluding Black-owned media companies from its general advertising budget. Instead, the company allegedly relegated those outlets — including Allen’s Entertainment Studios and Weather Group — to a limited “African American tier,” which he claimed had far fewer dollars available. Allen argued this practice unfairly marginalized Black media entrepreneurs and denied them access to broader advertising opportunities.
Inside the Legal Battle
McDonald’s denied any wrongdoing but acknowledged in the settlement that it would continue purchasing advertising “at market value” from Allen’s media companies. While the terms of the settlement remain undisclosed, the resolution also includes Allen’s separate $100 million lawsuit against the fast food giant in Los Angeles Superior Court.
“We are pleased to find a resolution that maintains our business relationship,” Allen said in a statement. “During the course of this litigation, many of our preconceptions have been clarified, and we acknowledge McDonald’s commitment to investing in Black-owned media properties and increasing access to opportunity.”
McDonald’s echoed a similar sentiment, stating: “We are pleased that Mr. Allen has come to appreciate McDonald’s unwavering commitment to inclusion, and has agreed to refocus his energies on a mutually beneficial commercial arrangement that is consistent with other McDonald’s supplier relationships.”
Last December U.S. District Judge Fernando Olguin denied McDonald’s motion to dismiss, stating the case was a “close call” that warranted a full hearing.
The lawsuit highlighted broader industry issues concerning how major advertisers allocate their budgets when it comes to minority-owned media outlets.
Allen has a track record of successfully challenging media giants over equity and access. He previously reached settlements with Comcast, DirecTV, and Charter Communications.
Before the settlement, Allen, whose net worth is estimated to be $735 million, by Bloomberg, had major business and personal moves. Last year, his Allen Media Group has implemented layoffs, impacting staff across various divisions including The Weather Channel, local stations, and digital platforms like TheGrio. These cuts were described as a cost-saving measure to facilitate future growth and acquisitions. The company also sold 28 local TV stations to reduce debt. The proceeds from the sale were expected be used to pay down debt, according to The Hollywood Reporter.
On a personal note, he sold his full-floor condominium at 220 Central Park South in NYC for $82.5 million. He also sold a contemporary mansion in Aspen, Colorado, for $60 million, more than double what he paid for it.
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