Byron Allen’s media companies and McDonald’s settled their $10 billion racial discrimination lawsuit on June 13, 2025, ending four years of litigation roughly a month before a federal jury trial was set to begin in Los Angeles. The terms were kept confidential, and McDonald’s admitted no wrongdoing.1
What Allen’s Companies Alleged
The federal case, Entertainment Studios Networks, Inc. v. McDonald’s USA, LLC, was filed in 2021 by two arms of Allen’s business: Entertainment Studios Networks and Weather Group, the parent of The Weather Channel. The plaintiffs sued under 42 U.S.C. § 1981, the Reconstruction-era statute barring racial discrimination in contracting.
The complaint described a two-track advertising system at McDonald’s. According to the plaintiffs, the company ran most of its television ad spending through a “general tier” aimed at broad-audience networks, while routing a much smaller budget through a separate “African American tier” for outlets targeting Black viewers. Allen’s companies argued the structure sent far less money to Black-owned networks than to comparably sized white-owned ones. They sought $10 billion in damages.
How the Case Reached the Brink of Trial
McDonald’s tried repeatedly to end the case before trial. An early motion to dismiss succeeded in November 2021, but the court allowed the plaintiffs to amend, and a renewed motion was denied in January 2022. In December 2024, U.S. District Judge Fernando M. Olguin denied a further motion to dismiss, calling it a “close call” that warranted a full trial. He set trial for July 18, 2025.
The Settlement Terms
The parties announced their agreement in a joint statement on June 13, 2025. The dollar figure was not disclosed, and it was not made public whether McDonald’s agreed to any changes in how it buys advertising.
McDonald’s USA said it was “pleased that Mr. Allen has come to appreciate McDonald’s unwavering commitment to inclusion” and looked forward to a “mutually beneficial commercial arrangement consistent with other McDonald’s supplier relationships.” Allen said that “many of our preconceptions have been clarified” during the litigation and acknowledged “McDonald’s commitment to investing in Black-owned media properties and increasing access to opportunity.”
The Separate $100 Million California Case
Allen’s companies pursued a second, narrower lawsuit in California state court, and that one did not survive. Filed in May 2023, the $100 million action focused on a specific promise: McDonald’s 2021 pledge to raise national advertising spending with Black-owned media from 2% to 5% by the end of 2024. The plaintiffs said they had submitted a $30 million advertising proposal and received only $2.1 million in revenue, and they argued McDonald’s never intended to meet the goal.
Los Angeles Superior Court Judge Mel Red Recana dismissed the case under California’s anti-SLAPP statute, finding the plaintiffs had not shown a probability of prevailing. He concluded a corporation could not be sued over what amounted to a “pledge in a press release.”
The California Court of Appeal affirmed on March 24, 2025, in an opinion by Presiding Justice Elwood Lui. The appellate court gave several reasons. The 2021 diversity plan set broad goals without specifying how money would be split among particular companies. Allen’s outlets had been pitching McDonald’s since 2013 and could not reasonably claim they were designated beneficiaries of the plan. And because the suit was filed in mid-2023, McDonald’s still had over a year and a half to hit its 2024 target, making any claim of nonperformance premature. The court also rejected the argument that the pledge was “commercial speech” outside anti-SLAPP protection, describing it instead as a statement of corporate social responsibility.
The 2021 Diversity Pledge Behind Both Suits
Both lawsuits pointed back to a May 2021 announcement by McDonald’s USA. The company said it would more than double its national advertising spend with diverse-owned media — including Black, Hispanic, Asian Pacific American, women, and LGBTQ-owned outlets — from 4% to 10% over four years. Within that, McDonald’s specifically committed to raising spending with Black-owned properties from 2% to 5% by 2024. It also said it would form an advisory board, hold annual media partner summits, and build multi-year partnerships with diverse-owned companies.
No public audit confirming whether those targets were ultimately met has surfaced in available reporting.
Why the Comcast Supreme Court Ruling Shaped the Case
Every Section 1981 claim Allen has brought since 2020 has been litigated in the shadow of his own earlier trip to the Supreme Court. In Comcast Corp. v. National Association of African American-Owned Media, decided March 23, 2020, the Court ruled unanimously in an opinion by Justice Neil Gorsuch that a plaintiff bringing a Section 1981 claim must plead and prove race was the “but-for” cause of the injury. In practice, that means showing the adverse decision would not have happened but for the plaintiff’s race. The Court rejected the Ninth Circuit’s lower “motivating factor” standard, under which race needed to play only “some role.”
Justice Ruth Bader Ginsburg concurred but flagged concern about the strictness of the but-for standard, noting it was now the Court’s “default rule.” The case returned to the lower courts and never went back to trial; Allen and Comcast settled in the summer of 2020, with Comcast agreeing to carry three of Allen’s channels on Xfinity and to extend its distribution deal for The Weather Channel and 14 Allen-owned broadcast stations.
That higher pleading bar is what McDonald’s tried, and failed, to use to knock the advertising case out before trial. Judge Olguin’s December 2024 ruling that the case was a “close call” but should reach a jury meant the plaintiffs had cleared the Comcast threshold, at least on the pleadings, and put McDonald’s in front of the prospect of a courtroom fight over its ad-buying structure. The settlement came about six months later.