Is the following situation legal?

I have been at my job for a little over 5 years now. A gentlemen (black male) was also hired at the same time as me, with the same title and pay grade but handled more of the sports programs. My old boss retired about a year ago and a new one was recruited from within to replace him. We don't have the most amiable of relationships and he clearly favored my male counterpart. Even so I continued to just do my job to the best of my ability and figured my work would speak for itself. Just last week I was called into my boss's office and told he is creating a new position of recreation manager and was giving it to the male. I'll admit I didn't handle it well. When I stated that I not only have a Bachelor's degree, but am currently attending school to obtain my masters, have 16 years supervisory experience and my programs are more successful and profitable, I got no response. I suggested it was because he was a male and my boss said that was incorrect. He then went on to state that