Byron Allen Reaches Settlement in $10 Billion Lawsuit Against McDonald’s Over TV Advertising

Allen Media Group chief Byron Allen has reached a settlement in the $10 billion lawsuit that he filed in 2021 alleging the fast food giant discriminated against Black-owned media companies in its TV advertising expenditures.

Terms of the settlement were not disclosed. The deal averts a trial that had been scheduled to begin in federal court in Los Angeles next month. The sides announced the agreement in a joint statement issued late Friday.

“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,” McDonald’s USA said in a statement. “Our company’s unique three-legged stool model relies on mutual respect, and we look forward to ESN’s contributions to the betterment of our system.”

Allen’s suit hinged on his assertion that McDonald’s habit of buying ad time on media outlets that target Black viewers was discriminatory because those purchases were made from a budget set aside for what the complaint described as “the African American tier” of outlets. Allen’s suit argued that the practice was damaging to Black media owners because that tier had more limited dollars available than the general tier that the company used for reaching broad-based audiences on the largest networks and platforms.

The suit was filed by Allen Media Group’s Entertainment Studios and Weather Group units.

“We are pleased to find a resolution that maintains our business relationship,” Allen said. “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. Our differences are behind us, and we look forward to working together.”

It’s unclear if the settlement incorporates any larger changes to the fast food giant’s ad buying practices. In December, Allen’s complaint survived a motion to dismiss from McDonald’s when U.S. District Judge Fernando M. Olguin ruled he believed the case was a “close call” that would “benefit from a full hearing.”

Allen has largely prevailed in a series of civil rights lawsuits filed against major players in media and advertising over distribution deals for his channels and ad sales. Allen reached a settlement with Comcast in 2020 after a long-running litigation that went to the U.S. Supreme Court to rule on one aspect of the case. He also reached settlements with DirecTV and Charter Communications.

Allen started his company more than 30 years ago with a single talk show that he hosted. Today, he owns numerous lifestyle channels, the Weather Channel and digital outlets including The Grio and HBCU Go. He has invested in TV stations during the past 10 years but earlier this month tapped investment bank Moelis & Co. to help him sell the collection of 28 network affiliate stations in medium and small markets across the country.