Fast-food giant McDonald’s Corporation has reached a confidential settlement in a $10 billion racial discrimination lawsuit brought by Byron Allen’s Entertainment Studios Networks (ESN), resolving years of litigation that accused the company of systematically excluding Black-owned media from its core advertising budgets.
Filed in May 2021, the federal lawsuit alleged that McDonald’s maintained a discriminatory, two-tiered ad-buying system—relegating Black-owned media companies like Allen’s to a “separate and unequal” advertising tier.
Allen claimed that despite McDonald’s public pledge to increase advertising spend with Black-owned media from 2% to 5% by 2024, the company failed to meet that commitment, prompting his legal team to take action in both state and federal court.
The June 2025 settlement comes just weeks before the matter was scheduled to go to trial in the U.S. District Court for the Central District of California. In late 2024, Judge Fernando Olguin found that McDonald’s may have violated federal and state civil rights statutes, including California’s Unruh Civil Rights Act, by enforcing ad placement practices that resulted in racially disparate treatment.
Under the settlement terms—which remain confidential—McDonald’s has agreed to purchase advertising at market value from Allen’s portfolio of media brands, including Entertainment Studios and The Weather Channel. Although McDonald’s admits no wrongdoing, the agreement represents a significant shift in how large corporations engage with Black-owned media.
“We are pleased to find a resolution that maintains our business relationship,” said a joint statement from McDonald’s USA LLC, Entertainment Studios and The Weather Channel. “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.”
In a separate statement, McDonald’s USA, LLC explained that the deal reflects a “mutually beneficial commercial arrangement”, consistent with its broader supplier relationships.
“We are pleased that Mr. Allen has come to appreciate McDonald’s unwavering commitment to inclusion,” the company said. “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.”
This resolution also settles a related $100 million case filed at the state level, closing a legal battle that drew national attention to the intersection of corporate responsibility, advertising equity, and racial justice in the media industry.
