The Confidential

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Archive for the tag “realignment”

Is ESPN’s Greed Causing it to Lose Profit?

Frank the Tank has a new article up on the Catholic 7’s new television deal showing that basketball has more value in expansion than previously thought.  The Confidential does not disagree.  However, with Fox offering big money for a basketball-only product–and taking that product away from ESPN–it is just the latest example of ESPN’s greed causing it to lose profit.  What this also shows is that ESPN made a killing off its undervalued contract with the Big East and is making another killing off of the ACC contract.

Think about it.  If the Catholic 7 collectively have a fair market value of $3M apiece–that is $21M right there.  TCU, Syracuse, Pitt, West Virginia, Rutgers, and Louisville have values of approximately $18M apiece–given that they were accepted into conferences that needed roughly that (more for TCU/Rutgers/WVU) to break even.  So that is $108M.  Figure ND is worth $6M for its non-football stuff… that is $135M ($21M + $108 + $6M).  And then you still have UConn, USF, and Cincinnati.  Even at $25M total for the three schools, that is $160M.

For that collection of schools, ESPN offered $11M per football school–or $99M/year.  With the hoops schools getting a few million apiece, that is another $20M tops.  So $120M.  $40M less than what the schools ultimately proved to be worth individually.  At the very least.

In the end, ESPN ends up with UConn, USF, Cincinnati, and fodder.  So much for that extra value.  By trying to profit as much as possible off the Big East, ESPN ended up losing most of it.

Sort of.  Some of it went to the ACC, which is also under ESPN’s control.

For now.

Regardless of the veracity of any rumors, there are vultures circling the ACC to see IF it is a carcass.

So the interesting issue is whether ESPN will lose its ACC golden goose also.  Viewed separately, all but a handful of ACC schools are desired by the Big XII, SEC, and Big 10.  Viewed conservatively, BC, Pitt, Syracuse, and Wake Forest are “stuck” in the ACC.  An argument could be made that BC, Pitt, and Syracuse might have value to the Big XII as part of a NE wing with WVU.  Interesting thought.  But let’s assume not.  If conferences making $20M/year (minimum) can find a revenue BOOST in adding the other 10 ACC schools, that must mean that those schools are worth at least $22M apiece or $220M.  Assuming the remaining 4 are worth $11M apiece (50%), that is $264M total.  Minimum.  It is probably much higher.

Well, ESPN is paying an average of $240M per year.  Less extra profit than with the Big East, but still a nice 10% premium above the bare minimum numbers discussed above.

The question this time is whether ESPN will allow the ACC–in its current form–to walk out the door.  For every ACC school that leaves for somewhere other than the SEC, ESPN becomes less relevant and Fox becomes more relevant on the college sports scene.  At some point, ESPN has to protect its place in the college sports game.  It wants to start an SEC Network, not become the SEC Network.  Right?  But, given what has happened at many major corporations, one can never underestimate the stupidity of an organization.  10 years from now ESPN’s college programming might be down to the SEC and 10 different shows where reporters yell at each other about college sports.  Or ESPN could end up overbidding on the Big XII or Big 10 because they put themselves into a desperate situation.  Who knows?

But it does seem like ESPN could save itself a lot of trouble by locking up the ACC.  That gives the network good football and great basketball.  Programming from September to March.  At the very least, something to keep it on pace with Fox.

 

Syracuse, Notre Dame, Pitt, and Louisville fans… get your Big East Conference Tournament tickets here:

Big East Basketball Tournament – All Sessions

ACC fans, get your tournament tickets here:

ACC Basketball Tournament – All Sessions

Notre Dame, The Big East, and the ACC

Well, it looks like the “Catholic 7” that are leaving the Big East are going to be taking the name–The Big East–with them.  As Frank the Tank points out, the Big East name still has value to those schools.  Indeed, Georgetown, Villanova, St. Johns, Providence, and Seton Hall have been part of the Big East for a long time.  In contrast, only Connecticut has a comparatively long history.  In the end, it certainly seems like this is a fair result.

Frank notes that Fox is paying for this move.  So it is yet another defeat for ESPN in the “war” between the two sports programming giants.

The interesting part is what happens with Notre Dame.  If the “Catholic 7” leaves before the 2013-2014 basketball season, what happens to the Fighting Irish?  Do they stay as a part of the diminished Former Big East, with games against UConn, Temple, and the C-USA teams?  Do they go with the Catholic 7 for one year while waiting for the ACC to create a spot?  Will the ACC create a spot for the Fighting Irish?  There are a lot of moving parts here.  In any event, the unlikely event of Notre Dame being in the ACC for the 2013-2014 basketball season is no longer quite as unlikely.

Oh, and let’s not feel TOO sorry for Connecticut, Cincinnati, and South Florida yet.  With all the defections, as well as the desperation for the Catholic 7 to leave and take the naming rights to the Big East, they might be left holding all the NCAA tournament credits and the exit fee fund left behind.  There is talk that this funding will be in the neighborhood of $68 million.  That is better than a sharp stick in the eye, anyway.

In any event, the main thing to keep an eye on is what happens to Notre Dame.  That will have to get resolved pretty quickly.

Conference Realignment–What if the ACC, Big 10, SEC, and Big XII Worked Together?

So far, conference realignment has been about taking… usually in the form of a happy conference (stealing a school), a happy school (happy to be stolen) and–cue the sad trombone–a sad conference (losing a school).  So far, the unhappy conference has usually been the Big East, but the Big XII has lost Missouri, Texas A&M, Colorado, and Nebraska, while the ACC has lost Maryland.  Only the Pac-12, SEC, and Big 10 have been exclusively happy.  In the meantime, there are rumors upon rumors of the ACC being carved up, with fewer (but existing) rumors regarding the Big 10 eying more Big XII schools.  But what if the ACC, Big 10, SEC, and Big XII sat down and worked on a plan that would keep each of these conferences roughly happy, while allowing each conference to arguably expand its market base?

Consider that the Big 10 has eyes on the Southeast market, but is leery of alienating its midwestern base/roots.  While some people talk about expanding to 18 or 20, these additions always involve Michigan and/or Ohio State moving to the eastern side.  On the other hand, the Big XII has a grant of rights that makes it more difficult to pry away a school.  But what if everyone sat down and came up with a plan that would kind of/sort of make everyone happier.

First, the Big XII would give up its GOR rights for Kansas, allowing them to slide to the Big 10.  In exchange, the ACC would give up Pitt, who would slide to the Big XII.  The SEC would give up Missouri.  In exchange for Missouri, the ACC would give up North Carolina State.  Missouri would go to the Big 10.  The Big 10 would be at 16, the SEC at 14.  At 10 members, the Big XII would have the option of taking Cincinnati and USF to move into further new markets (Ohio and Florida), while also adding a conference game.  The ACC could take UConn–adding a new market to replace the NC State “market” lost.  The ACC could also take Temple, adding a private school in the Pennsylvania market.

This would result in:

SEC East: Florida, Georgia, South Carolina, NC State, Vanderbilt, Tennessee, Kentucky

SEC West: Alabama, Auburn, LSU, Arkansas, Mississippi, Miss State, and Texas A&M.

Big 10 West: Nebraska, Missouri, Kansas, Wisconsin, Minnesota, Illinois, Northwestern, Iowa

Big 10 East: Ohio State, Penn State, Maryland, Michigan, Rutgers, Purdue, Indiana, Michigan State

Big XII South: Texas, Texas Tech, Baylor, TCU, Oklahoma, Oklahoma State

Big XII North: West Virginia, Pitt, Cincy, USF, Iowa State, Kansas State

ACC Atlantic: UConn, BC, Temple, Louisville, Clemson, Georgia Tech, Florida State, (ND)

ACC Coastal: Syracuse, Duke, Wake Forest, Virginia, North Carolina, Virginia Tech, Miami, (Navy–same deal as ND, only less money?)

Issues:

Big XII loses Kansas–a major basketball power.  However, Kansas is also terrible at football.  The Big XII stays strong in football at the top by adding Cincy and USF–two beatable teams in great markets for recruiting.  Cincy and USF are on the upswing in hoops too.  Pitt is very established in hoops.  A nice home-and-home pod with Pitt and Cincy for West Virginia.

SEC loses Missouri, but picks up NC State.  A market for market swap that probably hurts the SEC somewhat.  But the SEC adds a school that gives inroads into North Carolina, while further fitting in better on the Eastern side.  If, in 10 years, the SEC and Big 10 decide to carve up the ACC–the SEC has a lure for North Carolina–State is already there.  Meanwhile, NC State is more of an SEC school in terms of football zeal by the fans.  The basketball program could thrive freed from the shadow of Duke and UNC too.

The Big 10 gets a stronger Western flank with Missouri and Kansas.  With both schools freed of games against the powers of the SEC and Big XII, they could thrive.  The divisions finally start to make geographic sense, allowing for a 9 game schedule–7 games inter-division, plus two games against other division.

The ACC loses NC State and Pitt–two decent football programs.  UConn and Temple are a downgrade… but this staves off a loss of the major football powers and the major markets/leaders.

 

Of course, in a perfect world, the existing conferences could sit down and make complete geographic sense.  But that cannot happen.  In the interim, however, the conferences could work to share markets to allow all TV deals to slide upwards.  Although it is will get the most criticism, the Big XII would really be the big winner here.  The adds of Pitt, Cincy, and USF would open up three major recruiting markets, without exactly taking on terrible metro markets (Pitt, Cincy, Tampa).

What do you think?  Even if impossible, does it make sense?

 

 

Big 10 Expansion Petition

Until something more concrete is conceived, please consider signing and sharing this petition against Big 10 expansion:

https://www.change.org/petitions/the-ncaa-presidents-especially-big-10-presidents-stop-the-big-10-from-continuing-its-expansion#share

Whether you are a Big 10 fan that hates the addition of mediocre athletic institutions like Rutgers/Maryland and are otherwise sick of money driving things… or whether you are a fan of an ACC school who hates the idea of joining a midwestern conference… something needs to be done to give the fans power back.  We are the ones that make college athletics interesting, appeal to advertisers, etc.  If we stop caring, the money WILL GO DOWN.  Please stop giving us reasons to care less…

UPDATE: Even Frank the Tank is beginning to wonder about fire behind the rumored smoke.  http://frankthetank.wordpress.com/2013/02/19/b1g-dirty-south-expansion/     Do not complain if something goes down and you did not share your voice before it happened.  The University presidents are too elitist to care, but maybe trustees will hear the message and wonder whether short-term $$$ is worth the long-term move to ambivalence by the fan bases.

ACC Poll Day–If Notre Dame Went All-In with the ACC, Who Do You Like For Team #16

Today is a good day for a poll.  Query–if Notre Dame was to shock the world by going “all-in” for the ACC, giving it 15 teams, who would you like for team #16?  Let’s assume that schools from the SEC, Big XII, and Big 10 are out of the mix because…. they are.  Nobody is taking a pay cut to join the ACC.  It is what it is.

The candidates:

  • Connecticut.  Pros–outstanding hoops (mens and womens) & competent football, with at least one BCS appearance.  Rivalries with Syracuse and Pitt, and a huge rivalry potential with Boston College.  Even Duke-UConn womens hoops would be huge.  Cons–only competent football, not outstanding football.  Geographical overlap with Boston College.  Not a pedigreed football name.
  • Cincinnati.  Pros–new market (southern Ohio), good football recently, and some decent hoops.  Close to Pittsburgh & Louisville for potential rivalries.  Cons–small market, as Ohio is dominated by Ohio State, while neighboring Kentucky is  swallowed by Louisville and Kentucky.
  • Navy.  Pros–national name and a partner for Notre Dame.  Back into the Maryland/DC market.  Cons–terrible hoops in the post-David Robinson era.  Football would not exactly be an upgrade–although it is hard to say that Navy is demonstrably worse than UConn or Cincinnati in the big picture.
  • South Florida.  Pros–outstanding location for football recruiting and potential.  Cons–ACC already has the Florida market in check with Miami and FSU.  Hoops team has not done much, and the football team has underachieved of late.  Not a national name by any stretch.
  • Temple.  Pros–Philly market, good hoops history, and potential for football.  Cons–football has been more bad than good in the modern era, especially in the absence of a certain Mr. Golden.
  • Hybrid craziness.  Let’s say #16 gets to be UConn for hoops, Navy for football, and Johns Hopkins for lacrosse–take it or leave it, folks.  Or some other combination, like VCU for hoops subbing in for a UConn not being happy with a partial membership.

Anyone else out there?  This seems to be the list.

Who do you like and why?

Conference Realignment–ACC Needs to be Wary of History Repeating Itself

Frank the Tank has a new entry for your perusal.  In this latest blog entry, the opinion is that Fox, rather than ESPN, is responsible for the demise of the Big East.  The Confidential disagrees.  Moreover, the Confidential cannot help but think that the ACC needs to be very wary of the destruction of the Big East to prevent, to the extent possible, the demise of our great conference.

As a preliminary matter, there is no doubt that Fox’s entry into the sports networking landscape has been a contributing factor.  If nothing else, the partnership with the Big 10 has dramatically altered the college sports landscape.   Fox’s role in conference realignment is obvious.

But the demise of the Big East began long before the loss of Rutgers, Maryland/Louisville, Notre Dame, and the Catholic-7.  Rather, the demise began with the loss of Pittsburgh and Syracuse.  And, really, the loss of Pittsburgh and Syracuse began with the inability of ESPN and the Big East to negotiate a restructured deal.  While ESPN was willing to ride the Longhorn Network into town to save the Big XII, ESPN did not bother to do anything to save the Big East from demise.  Rather, it allowed (directed?) it’s partner, the ACC, to take two of the Big East’s most valuable properties–Syracuse and Pittsburgh.  Even if Fox was behind every other move that decimated the Big East (see West Virginia, TCU, Maryland, and Rutgers), the reality is that ESPN never stepped up to the plate to save the Big East.

As ESPN continues to lose the rights to major college programs, one wonders if ESPN is going to go the route of MTV.  Once, MTV showed videos… with an occasional non-video show sprinkled in.  At some point, MTV stopped showing videos.  And it’s been decades since this author has cared about MTV.  Every pass through revealed less about “music” and more about reality TV.  Presumably, MTV is still profitable and pleasing to its owners.  Is ESPN going to follow suit and devote more resources to news & shows where reporters yell at each other?   It certainly runs contrary to the prevailing logic that live sports are among the best television products out there because people cannot fast forward through the commercials.

In any event, the question that begs is whether ESPN will step up to the plate to “save the ACC.”   ESPN helped save the Big XII.  But, with every program that moves from the ACC to the Big XII or Big 10, ESPN will lose the exclusive rights to that school.  And one wonders whether Fox will be content to allow ESPN to share in the Big XII and Big 10.  If this is a business battle between Fox and ESPN, Fox seems to be winning.  The Big East was “collateral damage” in that battle.  The ACC needs to ensure that ESPN does not view the ACC as collateral damage.  It is unclear exactly what the ACC can do… but at least being wary of ESPN and history repeating itself is a very small step one.

What do YOU think?  Is ESPN working for or against the ACC these days?


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Notre Dame Unlikely to Play ACC Hoops in 2013-2014

Not much to comment about here… the reports are that Notre Dame is unlikely to get out of the Big East in time for the 2013-2014 season.  At least part of the issue is what is going on with the so-called “Catholic 7” and their formation of a new league.  Notre Dame certainly does not want to be in a hoops conference with the leftovers from the Big East.  But if the Georgetown, Villanova, Marquette, and DePaul group is still around for 2013-2014, the urgency to leave is reduced substantially.

We can expect the anti-ACC (i.e. West Virginia bloggers) to say that this is “proof” that the ACC is about to be raided and/or that Notre Dame is getting cold feet.  If that is true, it will only be dumb luck for those bloggers.  Even a broken clock is right twice a day.  If you throw out rumors every week, you will be bound to get a few right over a long enough period of time.

On another note, Frank the Tank has an interesting update on the Catholic 7 and the Big 10’s possible interest in Johns Hopkins for lacrosse only.  The Confidential continues to ponder whether the ACC should consider Navy for football only.  Another partner for Notre Dame.

 

The ACC’s Lack of a Grant of Rights Needs to Be Addressed

The Confidential is on record as disagreeing with the notion that the Big XII’s grant of rights is impenetrable.  That being said, the Confidential also disagrees with the notion that a grant of rights is merely an exit fee with lipstick.  Depending on the legalese, a grant of rights should be a property transfer, made voluntarily and for consideration, by a school.  It should be much much stronger than an exit fee.  As such, the ACC needs to address its current perceived weakness relative to the Big XII by pursuing, successfully, a grant of rights of some length.

The response is always that a grant of rights is not wanted by the membership.  Who does not want it?  If UNC, Duke, and Virginia do not want the grant of rights, then that tells you everything you need to know about the viability of the ACC.  Maryland did not like the exit fee and now it is in litigation with the ACC.  If these three schools are not bound to each other, and willing to reduce that to paper, then the ACC is doomed.

If those three agreed, one would have to think that Syracuse, Wake Forest, BC, and North Carolina State would be on board immediately.  For the most part, these schools are at risk for being left out when the chairs reshuffle.  Pitt could dabble with the Big XII, but the Big 10 is not an option, so Pitt should also be in favor.  While Virginia Tech–like North Carolina State–is rumored to be attractive to the SEC, it is unclear that the SEC is actually interested in these schools are their first choice.  If UNC and UVa went the Big 10 route, then perhaps a marriage would make sense.  But as long as UVa and UNC are solidly ACC, it is difficult to believe that a separation would be desired by Va Tech and NC State.

So that leaves Georgia Tech, Miami, Clemson, and FSU.  All four duplicate SEC markets (Georgia, South Carolina, Florida).  The Big 10 is not at all likely for Clemson alone.  Georgia Tech, FSU and Miami are possible, but have many reasons that they do not fit the Big 10.  At least not in the same way that North Carolina and Virginia do–proximity and academics.  Plus, Georgia Tech is a clear also-ran in its market.

The Big XII complicates things.  All four schools could make more money in the Big XII.  Probably.  It is unclear why Clemson and Georgia Tech would make $26+M per year for the Big XII.  Again, both are secondary schools in their markets.  And it is not like South Carolina is a big market.  Miami and Florida State are a different story.  Together, they would give the Big XII a strong Eastern flank and presence throughout Florida.  It would likely be worth it for the Big XII to take these two (or perhaps all four).  So these are the four truly “problem” schools.  At the same time, if the ACC had a legitimate plan to increase overall revenue, it is unclear that the monetary difference would be worth the move.  Certainly not in the same sense as Maryland’s move to the Big 10 (a relative no-brainer for a mismanaged athletic department that needs money badly and had the one thing the Big 10 needs–a new market).  But joining the Big XII would mean a grant of rights.  So, while it is unlikely that the SEC would come calling for Florida State or Clemson, a grant of rights with the Big XII would take them out of consideration.  Of course, a grant of rights with the ACC does the same thing.  So, yeah, the hesitance is there.

So this is the point where the ACC and ESPN need to sit down and talk seriously.  Without a grant of rights, the ACC is at a real risk of dissolving or turning into something unrecognizable.  If that happens, the good ACC markets will be divided between the Big 10, Big XII, and SEC.  If 10 teams leave the ACC, but only two go to the SEC (i.e. 6 to the Big XII and 2 to the Big 10), that means that 80% of those schools will shift over to conferences with a significant Fox relationship.  If Fox throws more money at these conferences, ESPN will be marginalized further with the lucrative college sports market (and ad revenue generated).  If ESPN is cool with that, so be it.  But if ESPN is not, then they need to step up to the plate and agree to something to make the ACC stronger.   And, by stronger, the ACC needs something tangible to convince everyone in the ACC to be willing to sign a grant of rights.

The length does not matter.  A five-year grant of rights would be enough to at least quiet the realignment talk a little.  It is shorter than the Big XII’s current grant of rights, meaning that schools with an eye on other conferences will still have an edge.  But it would allow for a bit of a “cease fire” and chance for the ACC to rebrand itself with its new additions.

If anyone does not want a grant of rights for even a relative short period, then it is clear that the ACC is not long for this world.  It is what it is.

ACC Winter Meetings Update- Future ACC Basketball Tournament Sites

Finally, we have some news out of the ACC Winter Meetings! Swofford has been FAR too quiet the past few days despite all of the realignment rumors that have been picking up speed in this blog and others. Fortunately, as any ACC member knows, silence from John Swofford and the ACC can be a good thing. HE’S UP TO SOMETHING.

ESPN just posted an article regarding  ACC Basketball Tournament sites and the possibility of future tournaments in New York City. What do you guys think about that? While I’m an NC native and a current resident, I’ve never liked the tournament being in Greensboro. Sure, I love the history, and the location is pretty convenient for me, but it just hasn’t seemed like the right place for the past few years. The league’s membership has grown and changed and so has its footprint. The location of its tournament must reflect that.

I’ve recently been a proponent of the conference expanding to 16 teams. Once we got beyond 10, scheduling  just became too difficult and unwieldy. With 16 teams, you can split up into four pods and play 9 conference games in football. That means you can play your entire pod (3 games), another full pod (4 games) and half of a third pod (2 games) each year. Under that configuration, teams would be able to see each other at least once every other year and play a game at every team’s home at least once every four years. That’s way better than things are now. Under the new scheduling rotation and current divisional model, it may take UNC up to 8 years to play Wake Forest, a longtime rival who’s campus is just 80 miles down the road from Chapel Hill. So how would these pods look?

Tobacco Road                    Deep South                Mid-Atlantic              North

North Carolina                        Miami                              Virginia                           Boston College

NC State                                     Florida State                  Virginia Tech              Syracuse

Wake Forest                             Georgia Tech                 Pittsburgh                    Louisville

Duke                                            Clemson                           West Virginia              Notre Dame

You’ll notice that I have West Virginia and Notre Dame in there. I believe that WVU has always belonged in the ACC and that ND WILL be forced to join a conference at some point. Its conference of choice is the ACC. They have proven this by taking partial membership with us over the Big 12 and rejecting the B10 on numerous occasions. If superconferences were to be logically created (and they probably won’t be), then the Big 12 would be the next to fall (not the ACC) and WVU would be free to join without the grant of rights restriction (which could just as easily be broken if 5 or more Big 12 members wanted to leave).

All that to say, is that it is imperative that the league shake its “Tobacco Road” bias image. That is why I propose that the tournament develop a permanent rotation between four cities: Orlando (ESPN Wide World of Sports Complex- Deep South POD), Raleigh (PNC Arena- Tobacco Road POD), DC (Washington Wizards Arena- Mid-Atlantic POD), Brooklyn (Barclays Center- North POD). Not only do these cities provide a variety of entertainment, dining and housing options for fans, but they also come with a significant corporate population and satisfy the fan bases of each “pod.” No longer would the ACC tournament be seen as a place where the North Carolina schools are given an advantage. With a strict, set rotation, fans could expect their favorite team to have an unbiased leg-up on the competition once every four years. This would also ease with travel plans for fans and teams and leave the league to work on more important matters such as re-branding itself and marketing its product.

What do you think? While we haven’t heard much yet, the news out of Florida (the location of the ACC Winter Meetings) is encouraging. John Swofford seems to be more willing to stray from the past, as seen with the addition of Louisville, than ever before and this can only be good for the future of the conference.

A Doomsday Scenario For the ACC–MrSEC Provides One

In the blogosphere, Mr. SEC is not someone to throw stuff at the walls.  And it is not happening here.  But the blog does have an article about how the Big XII and SEC could work together to kill off the ACC as a viable 5th big conference.

Part of the premise is that if the Big XII took Florida State, Louisville, Clemson, and Georgia Tech (along with say Miami and ND as a partial member for football), it could engage the SEC with a scheduling agreement.  That way the Florida, Kentucky, South Carolina, and Georgia schools would continue playing each other, while Missouri-Kansas, Texas-A&M, etc., could be renewed.  The question that begs is who that helps?  The in-state rivalry games are going to happen.  The difference between calling them “out-of-conference” and “out-of-conference, but part of the scheduling agreement” is minimal.  That still only leaves a certain number of games for other opponents.  In the meantime, we’d never get to see Florida-Texas or LSU-Florida State, because Florida-FSU would be playing every year in the “alliance game.”

This is not to say that the Big 10, Big XII, and SEC could not figure out a number of ways to divide up the ACC.  The bottom line is that being Syracuse and Wake Forest right now is not fun.  Not much room for private schools in the top 4 conferences.  So a viable ACC is needed to sit at the adults table.  At least BC and Pitt occasionally show up elsewhere in some doomsday scenarios.

Really, unless the ACC moves to a Grant of Rights, the expansion issue is going to loom.  Otherwise, the Big XII has a relative strength advantage over the ACC.  And that makes the ACC a target.

What is your opinion?

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