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The Business of Hockey Discuss the financial and business aspects of the NHL. Topics may include the CBA, work stoppages, broadcast contracts, franchise sales, and NHL revenues.

Bettman shares thoughts on Thrashers ownership

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Old
03-26-2010, 02:30 PM
  #451
Alan Jackson
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Originally Posted by kdb209 View Post
If playing a sport were a major factor in becoming a fan of the professional sport, Soccer (The "Next Big Thing", and it's been that on and off since Pele) would be the #1 sport in the US. It's pretty ubiquitous among kids and has been for decades, but it has not resulted in a groundswell of support for pro soccer (MLS or overseas) except, not unexpectedly, in immigrant communites.

So, if pro soccer can't catch on a big way in the States, what chance does hockey have? It is also telling that you note that immigrant communities follow soccer (ie, a sport that they have grown up with and is part of their culture).

That said, the MLS is making some huge strides in several markets, most notably in Seattle. I caught part of the Sounders match last night - the atmosphere was absolutely electric. 37,000 in the pouring rain, singing their collective hearts out. It reminded me very much of a football crowd in Europe.

How would Major League Baseball fare in England or Scotland? How would cricket fare here?

Having hockey fans in a particular market makes things a little easier for the franchise, that's all I'm saying. A lack of interest in hockey is a hurdle for some teams, and I don't know why that's being ignored.


Last edited by Alan Jackson: 03-26-2010 at 02:49 PM.
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03-26-2010, 03:06 PM
  #452
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...and get back to me if they miss the playoffs 3 years in a row.
Support will slip if they struggle that badly. I have no doubt of it. However, they are most likely going to survive that downturn with no trouble, because they have spent the past 19 years developing a loyal, committed fanbase. The Sharks haven't been good by accident, they have given their fans something to cheer for and will reap the rewards in the long term.



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To address your point though, I don't see what the NHL has to "lose" by moving a team from Atlanta to a market where there is demand.
A number of things:
1) The opportunity to develop Atlanta to the level of a Los Angeles or San Jose. Not only losing a huge market, but also there's also a sum>parts equation involved in losing a top-10 market.
2) A shot at a Huge National US TV Deal. It's not an absurd fantasy. The league was in a position to do this 15 years ago, and completely blew the opportunity. For the first time, it appears they have finally gained enough ground to try again.
3) Not just footprint, but the lynchpin of the Southeast Division. There are all sorts of logistical repercussions, from alignment to scheduling to marketing.
4) Credibility. This league is mocked enough already, and there hasn't been a relocation in over a decade.
5) The expansion fee from whatever place they decide to go.

That's five things. I'm sure there are other issues involved.

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I think the NHL believed they could manufacture fans, and I believe it's been more of a struggle that the League would have hoped.
It's probably been more of a struggle than they'd hoped, but it's not been the disaster that some have made it out to be. Carolina, Nashville, Dallas, Tampa, San Jose and Anaheim have all shown that they will support a well-run franchise and can survive the occasional down-year. The three that have done poorly -- Phoenix, Atlanta and Miami -- have had some of the worst experiences of any fanbases in the league. That doesn't make me question the business model, it makes me question the league's foresight when it approved of certain owners.

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03-26-2010, 04:40 PM
  #453
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Originally Posted by kdb209 View Post
I think you overstate it's impact in the US.

Again this may be a case of you viewing things with Maple Leaf colored glasses. This is not meant in any negative sense, but it skews your vision of the sports landscape in the US.
Agreed.

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If playing a sport were a major factor in becoming a fan of the professional sport, Soccer (The "Next Big Thing", and it's been that on and off since Pele) would be the #1 sport in the US. It's pretty ubiquitous among kids and has been for decades, but it has not resulted in a groundswell of support for pro soccer (MLS or overseas) except, not unexpectedly, in immigrant communites.

Unlike youth hockey, kids play soccer for the sake of playing soccer - not necessarily because they are fans of any particular pro team.
Soccer is a funny thing. In Canada (and I wouldn't be surprised if the same applies in the states) soccer has a large particpation rate among kids, but usually younger kids, as it also has a high "abandonment" rate as older kids tend to move to other sports be it baseball, football, hockey or basketball.

My kids both started with hockey and soccer, and both left soccer, with one going to football, and the other to basketball all the while continuing with hockey. So our little microscopic example seems to fit in with the norm in Canada.

But...soccer still is the most popular sport in the world, just not in North America

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My caution on projecting "thoughts and backgrounds" was not meant as just a US vs Canadian thing.

It was pointing out that we, the HFBoards population, who spend an inordinate amount of our free time talking hockey are not necessarily reflective of the "typical" hockey fan in general - not in the US or Canada.
Got it. Apologies if I misunderstood. Thanks for the clarification.

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03-26-2010, 04:56 PM
  #454
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Originally Posted by tarheelhockey View Post
A shot at a Huge National US TV Deal. It's not an absurd fantasy. The league was in a position to do this 15 years ago, and completely blew the opportunity. For the first time, it appears they have finally gained enough ground to try again.
Really? maybe it's my view form north of the border, but I've been hearing about the much coveted US TV market for over 30 years now. At what point does a more realsistic and pragmatic approach start? Does the NHL economic model have to emulate those of the other leagues? Can't it aspire for a unique model that prospers?

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Credibility. This league is mocked enough already, and there hasn't been a relocation in over a decade.
The credibility issue cuts both ways. Some say the NHL loses credibility by trying to "impose" itself on some of those sun-belt, non-traditional markets.

Is having to reloacate that bad? Sure it's not desirable, but the other leagues seem to be ok with it when warranted.

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It's probably been more of a struggle than they'd hoped, but it's not been the disaster that some have made it out to be.
I'm on the fence here. Seems like there's the potential for huge change because of all the finanacial bleeding going on right now. Remember how Bettman kept saying everything was alright in Phoenix when the opposite was true? Makes me wonder if things are actually worse in some places than the reports indicate.

I for one am not a fan of the commisioner or the BoG and owners in general. I think there is too much "good old boys" networking going on at the expense of the game. The game is being tied to too many other interests and it suffers for it. This, I believe, is exactly what's happened in Phoenix.

IMO, Phoenix, could have worked but it was set up for failure by the arena being built in its location and being financed the way it was. The real estate dealings and political connections exposed during the BK proceedsings were astounding. Too many interests relegated the hockey aspect to a low priority in all this.

Just sayin'.

I'd love to learn more deatils about the whole Thrashers situation and why it's having trouble. Can someone point in a direction other than this thread?

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03-27-2010, 11:14 PM
  #455
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Originally Posted by Hamilton Tigers View Post
Really? maybe it's my view form north of the border, but I've been hearing about the much coveted US TV market for over 30 years now. At what point does a more realistic and pragmatic approach start? Does the NHL economic model have to emulate those of the other leagues? Can't it aspire for a unique model that prospers?
The goal of "sudden" expansion (which was much more devastating than "southern" expansion) was that "elusive TV contract."

If you look at the history of the NHL's US TV deals... it worked. They cashed in BIG TIME from ESPN.

But the NHL made a tragic mistake when Fox wanted to challenge ESPN and tried to steal the league from ESPN. The NHL re-upped with ESPN at a lower rate, ESPN crushed FSN and then discarded the NHL.

Even with the banishment to Versus, the NHL is hauling in a ridiculously larger contract than the old NHL did... mainly because they now have teams where 37% of the population of USA/CAN live, where as the 22-team NHL had teams where 24% of the population was.

Those markets (Miami, Phoenix, Atlanta, Columbus, etc) have helped Versus get carried in more markets, and helped Versus make more money.

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03-28-2010, 07:57 AM
  #456
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Originally Posted by KevFu View Post
The goal of "sudden" expansion (which was much more devastating than "southern" expansion) was that "elusive TV contract."

If you look at the history of the NHL's US TV deals... it worked. They cashed in BIG TIME from ESPN.
When they fail to follow up on more lucartive TV deals, I wouldn't say it worked.

Sounds to me like the networks feel they made a mistake.

If they want something akin to the other leagues but they're not even close. Even when they had a successful contract, the networks reverted back to " Uh, no thanks. No one is watching" attirude.

Fact is, national ratings are abysmal.

Regional ratings seem to be another matter, and that approach may work better for he NHL.


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03-28-2010, 10:09 PM
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It's not like the NHL had to give the money back.

The current VS dollar value is a lot closer to the ESPN contract than the pre-ESPN contract.

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03-29-2010, 07:35 AM
  #458
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NFL $4.1 billion
NBA $937.5 million
MLB $900 million
NHL over $72.5 million

http://www.reuters.com/article/idUSN2938763620090629

Less than one tenth of NBA and MLB.

That $72.5m in not much more than two years worth of Phoenix lossses.

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03-29-2010, 11:11 AM
  #459
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Originally Posted by KevFu View Post
It's not like the NHL had to give the money back.

The current VS dollar value is a lot closer to the ESPN contract than the pre-ESPN contract.

Interesting way of putting it. The ABC/ESPN deal started in 1999, paid $120m. The league is getting $48m less... the difference being a value pretty close to the current VS contract value

~$72m - $31m (Fox contract value) = $41m more

http://www.andrewsstarspage.com/NHL-...-broadcast.htm


Those are 1990's dollars, not 2010 dollars btw.

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03-29-2010, 11:52 AM
  #460
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The current VS contract is for $72.5 million.

Plus there's the NBC deal, in which they pay the NHL nothing, has the NHL and NBC splitting advertsisng revenue. No idea what that might be.

Any educated guesses out there?

I wouldn't think it would be much, but I don't know. I'd also assume the the value with the NBC deal lies in the expsosure of the product.

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03-29-2010, 12:20 PM
  #461
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Originally Posted by Hamilton Tigers View Post
NFL $4.1 billion
NBA $937.5 million
MLB $900 million
NHL over $72.5 million

http://www.reuters.com/article/idUSN2938763620090629

Less than one tenth of NBA and MLB.

That $72.5m in not much more than two years worth of Phoenix lossses.
You have to remember that all of those other leagues ONLY rely on the USA tv revenue. The other leagues make basically nothing in Canada. Maybe a few million each.

From what I've read in the past, the NHL makes about $650 million in tv money per season. Includes local and national money.

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03-29-2010, 12:27 PM
  #462
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You have to remember that all of those other leagues ONLY rely on the USA tv revenue. The other leagues make basically nothing in Canada. Maybe a few million each.

From what I've read in the past, the NHL makes about $650 million in tv money per season. Includes local and national money.
I think this recent discourse here was in regards to Atlanta being part of the sun-belt strategy that is all part of trying to land a U.S. national TV contract as the other leagues have done.

I was musing that perhaps that strategy may be misguided and it may behoove the league to seek an alternate startegy since, as you point out, the NHL is more regional and has that substantial Canadian footprint.

That $650m you refer to, is that NHL revenue, or individual club revenue?

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03-29-2010, 12:50 PM
  #463
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Originally Posted by Hamilton Tigers View Post
Really? maybe it's my view form north of the border, but I've been hearing about the much coveted US TV market for over 30 years now. At what point does a more realsistic and pragmatic approach start? Does the NHL economic model have to emulate those of the other leagues? Can't it aspire for a unique model that prospers?
As we discussed in the "NHL vs. Relocation" thread, I think this would be possible and it's interesting to speculate what that unique model might be. However, in the current reality that we are dealing with, the NHL is pursuing a model similar to the NBA. That being the case, a major TV deal is an absolute necessity and we are closer to that today than we have been in a long time.


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The credibility issue cuts both ways. Some say the NHL loses credibility by trying to "impose" itself on some of those sun-belt, non-traditional markets.
This is probably true to some extent. The NHL has done a terrible job of positioning itself in the majority of its non-traditional markets. The ownership groups have ranged from amateurish to criminal, the teams have ranged from mediocre to unwatchable, and the marketing sense has generally been awful. It has all built up an image of the NHL as a bush-league operation, which in turn causes other opportunities in those new markets to wither.

However, I don't think the perception that the NHL is "imposing" itself in these places is true to reality. Gary Bettman didn't helicopter Philips Arena into Atlanta by the dark of night. The expansion process would never have happened if there was not a general belief that a franchise could work in that market -- a belief that is really not discredited by their decade-long struggle, despite the hasty conclusions that certain (other) forumers have jumped to.

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Is having to reloacate that bad?
Yes. Compare to other leagues:

- The NFL has replaced every relocated team (Houston, Cleveland, St. Louis, Baltimore, Oakland) in the modern era with the notable exception of Los Angeles, which we all know will be replaced eventually.
- In the past 25 years, the NBA has seen two disastrous relocations which led to bottom-5 attendance in three markets (Memphis, New Orleans, Charlotte), plus the Seattle relocation which left deep scars akin to the NHL's Hartford move.
- MLB has replaced every relocated team in the past 40 years, with the exception of the Expos who were an unprecedented disaster at the end (playing in Puerto Rico, etc.).

The track record of the other major leagues is not to simply abandon markets as "failed". Relocation isn't a white flag, but rather an unfortunate step in the process of re-expanding, keeping that market in the fold for the long-term. What we have been discussing here is almost unprecedented in the past three decades of major pro sports. It's that bad.

I agree with you that the league has allowed too much riff-raff into the decision-making process. However, I don't think it's so much related to the contractionist-expansionist debate, as to having too many carpetbaggers investing in this business strictly to make a quick buck off a product they don't completely understand. That's a reflection of the NHL's lack of positioning relative to its competitors -- competent investors owners go elsewhere, the NHL gets the leftovers -- and I don't think the situation will improve if the league lowers its horizons to being a merely regional organization.

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03-29-2010, 01:04 PM
  #464
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a major TV deal is an absolute necessity and we are closer to that today than we have been in a long time.
Why do you say that?

Not being too familair with the such deals, I was under the impression that going to VS was not a good thing and that getting nothing from NBC was a bad thing. Aren't NBC's numbers low, and isn't VS's reach limited?


As far as other leagues' relocations go, wasn't the NFL's along the lines of wealthy owners taking adavantage of incentives to move to another location, rather than making a necessary move because their current sitaution was a financially bad one?

I'm not too sure about the NBA moves? Were Vancouver, Seattle and Charlotte losing money, or was it a case of just moving on toe greener pastures??

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However, I don't think it's so much related to the contractionist-expansionist debate, as to having too many carpetbaggers investing in this business strictly to make a quick buck off a product they don't completely understand. That's a reflection of the NHL's lack of positioning relative to its competitors -- competent investors owners go elsewhere, the NHL gets the leftovers -- and I don't think the situation will improve if the league lowers its horizons to being a merely regional organization.
Hmmm... interesting viewpoint and I can see the logic there. On the other hand, I'm of the mind that a guy like Balsillie is exactly what this league needs. He loves the game, its history and its tradition, and don't forget how quickly he was approved unanimously before all the "other stuff" happened. (Not getting into that here!)

Really, Boots Del Biaggio instead of Balsillie?

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03-29-2010, 01:36 PM
  #465
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Not being too familair with the such deals, I was under the impression that going to VS was not a good thing and that getting nothing from NBC was a bad thing. Aren't NBC's numbers low, and isn't VS's reach limited?
A deal with ESPN would trump either of them by a longshot. The current TV deals aren't a total disaster, but they aren't what the league needs to ensure a prosperous future.

I tepidly support the VS decision because they have worked harder to market the NHL than ESPN ever did. But they have made mistakes in other ventures (college football, notably) which might prove to be fatal for their market share. What the NHL really needs is to convince ESPN that it deserves exposure on their flagship station, which is starting to look like a possibility with viewership and attendance finally coming back up. But that's all speculation, since we just don't know what the next phase will be until we get there. I just hope nothing happens to sabotage the progress that has been made since the lockout.


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As far as other leagues' relocations go, wasn't the NFL's along the lines of wealthy owners taking adavantage of incentives to move to another location, rather than making a necessary move because their current sitaution was a financially bad one?
That's exactly it -- the NFL has never simply thrown in the towel and declared their product unmarketable. When an owner moves, for whatever reason, they go back to that city with an expansion team in order to restore those ties (and $$$ flow) rather than just rolling over and letting other leagues pick their carcass. Of course, it helps to be the NFL in those situations.

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I'm not too sure about the NBA moves? Were Vancouver, Seattle and Charlotte losing money, or was it a case of just moving on toe greener pastures??
Seattle and Charlotte were arena issues, but I'm not clear on Vancouver.

To me, the most relevant NBA example is Charlotte. That's a basketball town in the heart of a basketball state, and for years it was the league-leader in attendance while the team was exciting and popular. But a decade of bad ownership was enough to torpedo that whole franchise, and the expansion Bobcats have been the NBA's version of the Thrashers -- absentee owner, poor product, no fans. That night-and-day story should give us some insight on the business dynamics of a pro franchise, which have very little to do with how much the locals enjoy the sport on an abstract level.


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Really, Boots Del Biaggio instead of Balsillie?
I see both of them in the same category -- rich egoists who are only getting into the league to further an agenda. If Balsillie had his way, Pittsburgh would be in the same boat as Hartford.

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03-29-2010, 01:50 PM
  #466
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Originally Posted by tarheelhockey
Seattle and Charlotte were arena issues, but I'm not clear on Vancouver.
Attendance issues and no real chance for the fanbase to develop. We were basically the NBA Atlanta Thrashers, and our attendance was never that high. They were only around for like, 4..maybe 5 years.

Interestingly, we had a higher average than Memphis does now when the Canadian dollar was dipping to 0.64 of the American dollar.

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03-29-2010, 02:11 PM
  #467
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I just hope nothing happens to sabotage the progress that has been made since the lockout.
One encouraging sign comes from the technical side of things. HDTV is making the NHL and hockey more palatable for the novice viewer, who had trouble seeing and following the puck.

"HDTV will have a greater impact on hockey than any other sport," says Matthew Pace, a lawyer with prominent sports law firm Herrick, Feinstein in New York. "You can follow the puck much easier (on HDTV broadcasts). The action is clearer. I think the television future of the NHL is bright."

(snip)

Many Americans complain the game doesn't translate well onto a television screen where the untrained hockey eye, unaccustomed to the flow of the world's fastest game, struggles to follow the puck.

(snip)

"We see that as HD gets more prevalent and more people get it hooked up ... our growth in hockey has been amazing," says Marc Fein, executive vice-president of programming with Versus. "We're seeing very nice ratings from all the hardcore hockey markets but we wouldn't be seeing the growth we're seeing if we didn't have the other markets coming along as well."

All Versus games are available in high definition. And a dramatically growing number of Americans are able to take advantage of that crystal-clear image.

HDTV penetration in the U.S. has gone from 34 per cent of households last year to "slightly under half" today, says Bruce Leichtman, president of television research firm Leichtman Research Group.


http://www.thestar.com/sports/articl...ericans-to-nhl

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03-29-2010, 02:17 PM
  #468
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Interestingly, we had a higher average than Memphis does now when the Canadian dollar was dipping to 0.64 of the American dollar.
The NBA had an identical experience in New Orleans, which drew less than Charlotte, and now with the Charlotte Bobcats who draw less than either.

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03-30-2010, 11:12 AM
  #469
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[QUOTE=Moobles;24800005]Attendance issues and no real chance for the fanbase to develop. We were basically the NBA Atlanta Thrashers, and our attendance was never that high. They were only around for like, 4..maybe 5 years.
QUOTE]

Vancouver last 6 seasons - 1995/96 - 2000/01

After the NBA lockout, attendance at Grizzlies games began to drop slightly, and the team's owners, Orca Bay Sports and Entertainment (who also owned the Canucks), began to lose money. The NBA rejected an initial sale of the team to Bill Laurie (who at that time owned the St. Louis Blues of the NHL) after Laurie openly stated that he would move the team to St. Louis, Missouri. Businessman Michael Heisley then bought the team in 2000 with a promise to keep the Grizzlies in Vancouver. However, attendance at Grizzlies' home games dropped slightly in the 200001 season. Fan support increased after it was widely believed that the team would be moved before the next season but it didn't help. I was surprised that they didn't get more than 6 years to make it work.

The Coyotes have had 13 years and the NHL is trying to save them?! I still don't understand why.

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