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Maxim party promoter sues Speedway over lackluster ticket sales

August 17, 2016

The company that staged the Indy 500 Maxim Party over race weekend this year has sued the Indianapolis Motor Speedway in federal court, claiming that it didn’t do enough to help publicize the sparsely attended event.

Karma International LLC, based in Long Beach, California, charges breach of contract in the lawsuit filed on Tuesday. It says it suffered damages in the amount of $817,500 in lost revenue from unsold tickets and tables at the May 27 party.

According to the suit, Karma and IMS hammered out an agreement before the event allowing the party to use the Indy 500 brand. They both agreed to market the event, taking place at the Pavilion at Pan Am, 201 S. Capitol Ave.

Karma anticipated selling 1,500 tickets to the party at $500 each. It also expected an additional $250,000 from table sales, bringing its total take from tickets and tables to $1 million.

However, sales were lackluster, generating only $182,500, according to the suit.

Karma contends that the IMS didn’t follow through on commitments to promote the event on its social media accounts and to send an email advertising the party to a database list of more than 425,000 music and race fans.

According to the lawsuit, IMS did market the event on social media channels—but only to 8,000 to 10,000 people, a fraction of its full social media reach. And while speedway officials did send a marketing email with information about the party, it was only to 15,000 people.

“Due to [the speedway’s] failure to perform the advertising for the Indy 500 Maxim Party as promised, plaintiff suffered damages in the amount of $817,500 in lost revenue,” the suit reads.

IMS disputed the claims in the suit.

"The claims made by Karma International in this complaint are false, and IMS will vigorously defend against them," Alex Damron, communications director for IMS, said Wednesday afternoon. "As this is pending litigation, we will have no further comment on the matter at this time.” 

Correction: An earlier version of this story incorrectly stated the event was held at the Indianapolis Motor Speedway.
 

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