Tar Heel Tattler - October 2005
Remember how Tom Sawyer tricked the neighborhood kids into paying him to let them whitewash his aunt’s fence? Tom got an apple, a kite, a dead rat and a string to swing it with, a key that didn’t unlock anything, a kitten with one eye and several other treasures for allowing the boys to fulfill his obligation to Aunt Polly.
ITC^DeltaCom Inc. did Tom a whole lot better. The West Point, Ga.-based telecommunications provider collected $1.9 million from Progress Energy Inc. this summer for letting the power company negotiate a deal to put its name on what used to be the BTI Center for Performing Arts in Raleigh.
What did ITC^DeltaCom give up? A contract that obliged it to pay the city $500,000 to keep the name of a dead company through 2017 on the downtown complex of theaters and music halls. ITC^DeltaCom inherited the contract two years ago when it bought BTI Telecom Corp., its smaller Raleigh-based rival (Tar Heel Tattler, August 2003).
Six years earlier, big spender Peter Loftin, BTI founder and CEO, had agreed to pay the city $3.1 million — $250,000 a year for 10 years, plus $600,000 in telecommunications services — for 20-year naming rights. The merger had erased BTI as an entity, but the contract didn’t allow ITC^DeltaCom to change the arts complex’s name or sell the rights to it without city approval.
Neither ITC^DeltaCom nor Progress would comment on the negotiations leading to the deal. City Attorney Tom McCormick says ITC^DeltaCom had been shopping the rights. Progress expressed interest after its 19-story Two Progress Plaza opened two blocks from the arts complex.
Lee Kimball, vice president of marketing for ITC^DeltaCom, notes that the company still has about 100 marketing and sales employees in Raleigh and denies that it was eager to get out of the contract. “We’re still doing a $50,000 gift in kind. We’re still very much a part of the Raleigh community. We evaluated potential name changes, but it was a great fit with Progress.”
It also is a great fit for the city, which collected about $2 million from BTI and ITC^DeltaCom under the original contract and got a new 20-year deal for $5.6 million from Progress. Even Progress is happy. “We are delighted to add our name to this world-class performing-arts center,” CEO Bob McGehee says.
Then again, Tom Sawyer’s friends were happy to whitewash Aunt Polly’s fence three times — and they paid far less than $1.9 million for the privilege.