Organizers for the three-day Karoondinha festival near Penn State University have canceled the July 21-23 event, telling Billboard in an exclusive interview that costs for the event spiraled out of control while ticket sales never met expectations.
Earlier Tuesday (June 27), organizers took down the festival’s website and deleted the Twitter account and began informing vendors and staff that the event was being called off.
Siblings Kaleena and Paul Rallis raised $5 million from local investors to host Karoondinha at Penn’s Cave & Wildlife Park in Centre Hall, Pennsylvania. Working with Starseed Entertainment’s Shannon McNevin, creative director Steve Gross, and talent buyer Drew Pompillio, the Rallis siblings booked Chance The Rapper, John Legend, Odesza and the Roots to headline the family-friendly festival and forecast tickets sales between 25,000 to 30,000. Despite a stacked lineup and a hefty promotional and branding budget, ticket sales never came close to meeting expectations, and earlier Tuesday, Kaleena and Paul made the decision to pull the plug on the 2017 event.
“The event as planned will not take place July 21-31, 2017,” Paul Rallis tells Billboard. “We’re looking at other options at this moment and hope we can make something happen in some way. We’re not walking away from the vision of the idea in any way, because our commitment is still to make something great happen in this area — it’s just not going to take place on the scheduled days.”
As for refunds, Paul Rallis tells Billboard, “We are looking at that next and have to have some other discussions on what that process will turn out to be.” Tickets were sold through Eventbrite, and Kaleena Rallis did confirm to Billboard that the ticketing company advanced the organizers a portion of the ticket sales, saying, “Our attorney is working through that with Eventbrite.”
Billboard reached out to Eventbrite, which provided the following statement: “We care deeply about the experience people have with Eventbrite and go to great lengths to ensure all customers are treated fairly when an event is cancelled or significantly changed. We have been in communication with the organizers of Karoondinha, which has been postponed. We will work closely with them to process refunds as quickly as possible for those interested in cancelling their orders. Details on timeframe to follow.”
The news comes after a number of high-profile festival cancellations, including Fyre Festival, which had to be shut down after the first day when attendees arrived at a woefully disorganized site. Last month, Pemberton festival in British Columbia declared bankruptcy, instructing fans who wanted a refund to apply as unsecured creditors.
A number of talent agencies said they started to hear something was wrong with Karoondinha several weeks ago and got concerned after calls stopped getting returned. Keith Shackleford with Paradigm, who booked Odesza and Porter Robinson to play at Karoondinha, said he required the organizers to present their business plan and contacts before agreeing to sell acts to the event and required the organizers to pay the artists in advance.
“I can check every vendor the festival is using and every investor or source of money, but deposits are the best form of due diligence,” he tells Billboard.
Kaleena Rallis tells Billboard that one of the reasons the festival failed was because they spent too much on professional fees for marketing, publicity, and site preparation. “There were definitely challenges posed as a result of the fees along the way,” she tells Billboard. “It has affected how we were able to execute the experience we wanted to create.”
They also say the decision to create a multi-stage, three-day festival for 30,000 far outpaced demand and that the event should have been scaled down closer to 8,000 attendees. Not only were ticket sales way off, but sponsorship sales also never came close to expectations, despite paying their sponsorship team $15,000 a month plus commissions on anything that was sold.
“I think what we’ve learned in all of this is that the key part of putting on a successful festival is having a sustainable business model, which we obviously didn’t have going into this,” Paul Rallis says. “The way this was structured in terms of its scale and projections was not sustainable.”
Especially “for a first-year festival,” Kaleena Rallis adds. “Even for some festivals in their second or third year, it’s not sustainable. There’s an oversaturation of festivals all over the country, and it has been a hard year all around, especially for those trying to take a festival to market.”
This article originally appeared on Billboard.