Verizon executives are claiming that Byron Allen has issued threats against the company, citing allegations of racism.
Allen, who recently settled a $10 billion lawsuit against McDonald’s over racial discrimination, has reportedly threatened similar actions against Verizon after opting out of a $15 million annual advertising deal with the telecom firm.
This 64-year-old comedian-turned-media executive has indicated intentions to withdraw advertisements, which Verizon’s CEO Hans Vestberg and Chief Marketing Officer Leslie Barland have called “racist.”
However, insiders at Verizon believe the claims lack merit and consider Allen’s threats to be an attempt at extortion by his company, Allen Media Group (AMG).
In a discussion with the Post, Joseph Ruggiero, Senior Vice President and Advisor at Verizon, confirmed the company’s concerns about a potential smear campaign and emphasized that they won’t back down.
“AMG is making groundless threats to publicly tarnish Verizon and its executives unless we comply with their demands,” Ruggiero stated. “We do not accept these ironic intimidation tactics.”
Neither Allen nor AMG have responded to requests for comment.
Verizon first heard about Allen’s recent threats through contacts in the industry, with those involved sharing details on the condition of anonymity.
According to sources, the dispute began when Verizon aimed to negotiate a long-term advertising contract with AMG, which would have involved $15 million in annual ad spending.
Although neither party signed the contract, Verizon continued to allocate $15 million towards advertising, according to sources.
Verizon has now reassessed its budget and notified AMG that it needs to reduce its spending by 30%, cutting the annual budget down to $5 million.
This decision stemmed from economic fluctuations affecting advertising expenditures, a source familiar with the situation noted, dismissing any allegations of racial bias against Verizon.
Ruggiero added, “Despite having invested tens of millions into AMG over the years, supporting small businesses and fostering economic development in the communities we serve, we feel this is unwarranted.”
Notably, in 2021, Verizon and AMG had partnered to announce a Black-owned media summit aimed at enhancing advertising spending for Black media companies.
Allen had openly expressed pride in working with Verizon, emphasizing the need for economic inclusion in Black-owned media while commenting on the trade imbalance between corporate America and Black communities.
Former Chief Media Officer John Nitti highlighted that Verizon had been addressing issues of diversity and equity over the years, claiming to strive for meaningful progress.
However, the political landscape has shifted, especially following President Trump’s orders to dismantle diversity, equity, and inclusion (DEI) programs at federal agencies. FCC Chairman Brendan Carr indicated that the elimination of DEI initiatives would influence merger approvals.
In May, Verizon’s $20 billion merger with Frontier Communications was cleared just days after they agreed to terminate their DEI program.
Allen had previously settled a discrimination lawsuit with McDonald’s for an undisclosed amount, following a significant legal battle that began with his accusation against the fast-food chain for excluding Black media from its advertising budget.
Over the years, Allen has been involved in a number of successful lawsuits against major media companies related to racial discrimination, including a prominent case with NBC that reached the U.S. Supreme Court.
He has also reached settlements with other firms, such as DirectV and Charter Communications, involving similar claims.
