McDonald's USA and Entertainment Studios Network/The Weather Group (ESN) have settled a pending advertising litigation.

The settlement of a $10bn lawsuit by media entrepreneur Byron Allen averts a trial that was scheduled for 15 July 2025 in Los Angeles federal court, as reported by Reuters.

Allen, the owner of Entertainment Studios Network and The Weather Group, had accused McDonald's of "racial stereotyping" by not including Black-owned media in a significant portion of its advertising budget.

Allen's allegations pointed towards McDonald's categorising Entertainment Studios as a media outlet targeting solely Black viewers, thereby relegating it to a smaller advertising budget instead of the general ad budget.

He also claimed that McDonald's was dishonest about its 2021 pledge to increase national advertising spending with Black-owned media from 2% to 5% by 2024.

According to Allen, he sought business from McDonald's based on this commitment, but his proposals were rejected.

The confidential agreement involves McDonald's continuing its advertising purchases from ESN, aligning with its strategic and commercial goals.

McDonald’s USA said in a statement: “We are pleased that 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.

“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.”

ESN will also drop its lawsuit against the fast-food giant in the US District Court for the Central District of California.

The terms of the settlement remain confidential, and McDonald's has not admitted to any wrongdoing.

Entertainment Studios Network/The Weather Group stated: “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.”

The advertising space purchased by McDonald's from ESN will be priced at market value.

"McDonald’s and ESN reach settlement over advertising litigation" was originally created and published by Verdict Food Service, a GlobalData owned brand.

 

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