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You really think if they called it a 'Greek party' instead there would've been no 'offense' taken?

Um, maybe? There's a whole list of unacceptable types of parties for companies to host.

Greek may have generated less uproar, but that's not the word they chose.

What about just "College Olympics"? (If olympics is not a trademarked word).

Point is, as long as it's a pong party someone would've still extrapolated it into Something For The Perpetually 'Offended' To Be Angry About(tm)