Small-Town Festival on a Bonnaroo Budget: Why Karoondinha Failed

Organizers spent thousands on consultants, branding and artist guarantees for a festival that never came close to ticket sales projections.

Siblings Kaleena and Paul Rallis knew they had to spend big to properly brand and market Karoondinha, a first-year festival in their hometown of Centre Hall, Pennsylvania.

Kaleena Rallis said she ended up hiring four separate marketing agencies to work on the festival, plucking down $15,000 to $20,000 in monthly retainers to each firm for professional help with branding, advertising and consumer marketing for the July 21-23 festival headlined by Chance the Rapper, John Legend and Odesza.

"There’s been a lot of time and money invested in building the brand," Kaleena Rallis tells Billboard of the failed festival, which was canceled Tuesday after the Rallis siblings failed to secure a last-minute investor to keep the festival afloat.

Rallis didn't have an exact number on how much was spent on marketing or branding, telling Billboard, "I don't want to think about -- let's just say it was a lot of money," she said of her festival, which only sold a few thousand tickets despite big investments in staffing and a solid artist lineup that would rival any major festival curated by Live Nation and AEG.

Karoondinha was built with high hopes that the three-day event at Penn's Cave and Wildlife Park might outperform this year's Bonnaroo, which attracted 65,000 people daily. The site was home to an underground cave that could be toured by boat, a wolf sanctuary and a wildlife park.

According to investor documents obtained by Billboard, Karoondinha organizers forecasted ticket sales between 25,000 to 30,000 fans but had prepared themselves for a sell out capacity of 70,000 generating $26 million in revenue.

But the Rallis never came close to hitting their most conservative estimates, describing the run up to the festival as a series of disappointments and missteps that ultimately forced them to cancel and scramble to issue refunds. Despite taking down their website and deactivating their Twitter account, neither Karoondinha organizers nor their ticketing partner Eventbrite have notified ticket buyers that the event is canceled nor have they issued instructions on obtaining refunds. Kaleena Rallis did acknowledge to Billboard that Eventbrite advanced her a portion of the ticket sale funds prior to the cancelation -- it's unclear how that decision will affect consumer's ability to get their money back.

Rallis said despite the six-figure branding expenditures, Karoondinha officials were unable to market headliners John Legend and The Roots in Philadelphia or Washington D.C. because of radius clauses.

"That was obviously a challenge because Philadelphia is our biggest nearby market," she tells Billboard. When the first half of the lineup was announced and put on sale in February, organizers were forecasting to sell anywhere between 8,000 to 14,000 tickets. Instead, they only sold a couple hundred tickets.

"We didn’t hit the projections we were conservatively estimating," Paul Rallis tells Billboard. "It wasn't even close."

A follow-up May 2 lineup announcement also flopped, "not moving the needle in a significant way despite a big investment in a lineup that should have resulted in ticket sales," Kaleena Rallis says.

Part of the blame goes to the current festival landscape, Rallis explains, citing increased competition from other festivals in the region. She also points to the collapse of Fyre Festival and Pemberton Festival in British Columbia, saying that weary booking agents put her team on an aggressive payment schedule for artist deposits as a first-year event.

But others close to the festival said the Rallis siblings were taken advantage of by consultants, producers and production companies that collected big monthly fees but didn't deliver much.

"There was no real marketing and no real production," said one publicist who was brought on late last week to help navigate the crisis. "They knew that the tickets weren't moving. In that point in time, the festival should have been reevaluated and shrunken, but it was never done. Instead, everyone kept grabbing retainers and pushing forward."

Rallis had hired Shannon McNevan with Starseed Entertainment to serve as one of the project's main consultants and Drew Pompillio from Dbuyer Inc to serve as lead talent booker. Billboard made multiple attempts to reach out to both men for comment -- McNevan did not return our calls or emails while Pompillio simply told Billboard "no comment."

Chance the Rapper's booking agent Cara Lewis also declined to comment for this story, while John Legend's manager Ty Stiklorius simply told Billboard she was "sad for fans who wanted to see the show." Paradigm agent Keith Shackleford explained that he is very proactive when it comes to vetting first year festivals before he sells them talent, verifying their staging and production companies, site plans and vendor lists to make sure he's not sending his artists into a quagmire.

"I can vet their vendors and make sure all of the production meets our high standards, but I am not aware of what  festival organizers are paying their vendors, unless they ask for my advice " he tells Billboard

Despite the terrible ticket sales, co-organizer Paul Rallis told Billboard that the festival kept building out a site that was far larger, and more expensive than they actually needed. He said an order was placed for 750 portable toilets, but when the vendor found out how few tickets had been sold, advised them to reduce the order to 100 toilets.

"We'd call and get quotes that were far cheaper than what we'd had origiinally ordered," he says. "Looking back, there was a lot of excess that really didn't need to be there."