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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.

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Old
10-01-2004, 12:39 PM
  #26
mr gib
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Originally Posted by me2
Perhaps if the players put forward a list of items they consider as revenue and the % of that revenue they will settle for then NHL might listen and both sides might get a deal done before Christmas 2058.
they've done that

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10-01-2004, 02:26 PM
  #27
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Originally Posted by mr gib
how can the players agree to a cap - a share of the total revenues - if the owners don't show them the - real - books - ?
The problem is the two sides agreeing on what is and what isn't "hockey revenue". That's the first gap they have to bridge. And if that many owners aren't using real and truthful numbers in this, they'll have much larger concerns in the future. And I'm not talking about the PA.

Anyways, I'm not saying a cap is what the league needs. There are other solutions that should lead to a healthy NHL. Somewhere in the middle of what the two sides say they want right now. Like I've said, I don't give a damn if one side is perceived to be the "winner" in all this. That's not the issue that needs resolving, even though that is the way it is made out to be by many of us who are quite un-informed.

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10-01-2004, 03:24 PM
  #28
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Originally Posted by cw7
The problem is the two sides agreeing on what is and what isn't "hockey revenue". That's the first gap they have to bridge. And if that many owners aren't using real and truthful numbers in this, they'll have much larger concerns in the future. And I'm not talking about the PA.

Anyways, I'm not saying a cap is what the league needs. There are other solutions that should lead to a healthy NHL. Somewhere in the middle of what the two sides say they want right now. Like I've said, I don't give a damn if one side is perceived to be the "winner" in all this. That's not the issue that needs resolving, even though that is the way it is made out to be by many of us who are quite un-informed.
I tend to agree with what this guy's saying, although because of blind adherence to ideology I side with the NHLPA. I'd have to add that it's not just "revenue" but also "player costs" that is a grey area that needs to be straightened out between the two sides. And given some NHL owners' fondness of fraud, etc. it's probably not going to get solved anytime soon.

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10-02-2004, 01:01 AM
  #29
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Originally Posted by mr gib
they've done that

And what percentage of revenue have the players agreed to limit their salary to? 45%, 50% 55%?

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10-02-2004, 04:53 AM
  #30
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Originally Posted by impudent_lowlife
I tend to agree with what this guy's saying, although because of blind adherence to ideology I side with the NHLPA. I'd have to add that it's not just "revenue" but also "player costs" that is a grey area that needs to be straightened out between the two sides. And given some NHL owners' fondness of fraud, etc. it's probably not going to get solved anytime soon.
Don't you think that first sentence contradicts itself? Not only that but blind adherence kinda shows that you're only willing to look at one half of the equation, the other half be damned. Both halves have to taken into account equally for the discussion/debate to even approach validity (and even then it's tenuous given that we only know a fairly small amount of the info needed to discuss this issue on any significant level).

But blindness (or blind spots if you will) seems to be rampant around these parts. Probably why we almost always end up having the same basic discussions in each thread.

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10-02-2004, 08:53 AM
  #31
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I don't think the problem is having the two sides agree on what is or isn't revenue and player costs. I think those things can be handled in pretty short order by looking at the CBAs of other sports leagues. Some tweaking to fit hockey would be done but it wouldn't take that long.

The problem is the fundamental difference the two sides have right now...it is not that the players association doesn't agree with the revenues/costs the NHLPA does not want to talk about revenues and player costs AT ALL. If the NHLPA were to start talking about revenue streams and player costs it starts the union down the slippery slope leading to a solution that binds player salary to revenue (i.e. some sort of cap, significant luxury tax).

They union may disagree with the numbers somewhat and with the Levitt report but the reason we haven't heard any sort of formal rebuttal on the NHLPA's part is because of this. Once they start talking revenues and costs the league will quickly have them at their mercy. Goodenow isn't stupid, he's not going to play into the leagues hands this early in the game...players don't even miss the first paycheque for another couple of weeks. The league did a brilliant job with the URO's the NHLPA gets from every team every year and with the Levitt report. The league wanted the players to vehemently dispute the figures and come out with their own Levitt report and then get down to negotiation. It almost worked and then the NHLPA seemed to stop talking so much about the revenues and costs and how the owners were reporting it and went back to the basic "we want as open a market as we have now. We will not accept a cap." Sure the NHLPA still says they don't believe the numbers but they are not as willing as they were 20 months ago to talk about what the owners should be including in revenue streams (i.e. all luxury box revenue not just for the 50 nights of the year the NHL is in town). The union saw that they were close to tying their own hands in this negotiation and backed off the revenue/cost game.


Last edited by tantalum: 10-02-2004 at 08:57 AM.
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10-02-2004, 09:23 AM
  #32
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And don't forget that in the Levitt Report the auditors had totally unlimited access to the owners' books. And if I remember correctly, Bettman said that it took about a year to thoroughly scrutinize the books for each team and compile the data and complete the report. But with some of the contracts the owners have given out, I'm still very far removed from supporting the owners, let alone the players.

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10-02-2004, 01:36 PM
  #33
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Originally Posted by tantalum
I don't think the problem is having the two sides agree on what is or isn't revenue and player costs. I think those things can be handled in pretty short order by looking at the CBAs of other sports leagues.
I disagree. This is exactly the problem with the Levitt report. He did look at the NBA way of of defining revenues. The NHLPA rejects it for reasons that are fairly obvious. Every team is a complicated business that splits the revenue differently between the rink, or the broadcaster or a similar affiliated business.

An obvious example is in Vancouver. The Levitt methodology severely understates the Canuck revenue. Levitt divided the luxury box and advertising dollars according to attendance at all events rather than reality. Sponsors at GM Place don't pony up because of the Dog shows, concerts or other events at GM Place. They pony up because of the Canucks. The NHLPA doesn't want a slice of the Dog show money, but they don't want the Dog show to get Canuck money either. They don't want a convention of Jehovah's Witnesses to funnel Canuck money into GM Place coffers.

When the Canucks worked out their deal with the BC Lottery corporation, most of the money put up by the Lottery went to board advertising and radio spots. Instead of the team getting 100% of that revenue, it got a lot less in the reports sent to the NHL.

Levitt allocates that revenue by attendance at all GM Place events. If the Molson Indy pulled 200,000 fans through GM Place looking at old cars during the weekend, perhaps 20% of that Lottery money went to GM Place rather than the Canucks. (This would be true even if the advertising on the boards was not even seen by the Indy fan wandering around the GM Place concourse.) The same thing is true of the luxury box revenue. That revenue is divided according to attendance in the Levitt system even though without the Canucks, zero boxes are sold.

Every team situation is different. The Levitt report takes all the teams, declares a formula doesn't fit any situation and pretends that "designated hockey revenues" are actually the revenues that are generated by hockey. That's absurd. In Vancouver, GM Place would not exist without the Canucks. It would not be named GM Place. There would be virually zero advertising revenue if the hockey team was not there. Nobody would buy luxury boxes.

This is why the NHL was embarassed by the Flyer revelations. Under the URO system that artificially divides up the revenues between the affiliated entities, the Flyers lost money. When the Flyers divide up the revenues according to their own business model, the Flyers make money. Which is more accurate?

Or take Vancouver again. They made money even under the Levitt formula. (Cobb was quoted at the time as saying it was $10 million.) When they were looking at selling the team however, the profits balloon to $20 million in 2002-2003. Why? Because the Canucks split the revenues between GM Place and the team differently than Levitt did. Which is more accurate? Who can tell?

You cannot tweak it to fit hockey because there are 30 different business models. The percentage of the revenue allocated to hockey should not be the same in New York as it is in Vancouver. Any artificial division designed to fit all teams will be wrong for virtually every team. The NHLPA is against any artificial division because they can't sort out the real from the unreal.

They want each individual business to decide what their real hockey revenues are and plan accordingly. In fact, all the teams do do that. They generate a single URO that bears no relationship to the way the business is actually structured. Everybody has two sets of books. One is internal that reflects the actual business structure, and the other is for the NHL. The NHL wants to negotiate a one size fits all definition of revenue and the NHLPA wants nothing to do with that.

Quote:
It almost worked and then the NHLPA seemed to stop talking so much about the revenues and costs and how the owners were reporting it and went back to the basic "we want as open a market as we have now. We will not accept a cap."
I don't think it almost worked. The players had no intention of ever agreeing. They wanted the individual reports because they wanted to know how the losses split out given this artificial system. While the system is obviously bogus, the individual team reports allowed the NHLPA to say, "Look at which teams are actually losing the money, even under the bogus NHL system of allocating revenues. These losses have nothing to do with the CBA. A new CBA will not fix the problems that occur because the team does not have a good rink or because they can't sell tickets in Florida or Carolina. The new CBA should not try to fix the problems caused by Ranger, Capital or Blue incompetence."

The NHLPA does not believe the numbers because they are not real.

Tom

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10-02-2004, 01:41 PM
  #34
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Originally Posted by me2
And what percentage of revenue have the players agreed to limit their salary to? 45%, 50% 55%?
i know the 5 percent rollback was a bit laughable but as was said it's a starting point - incidentally the rollback amounted to what the league lost as reported in the levitt report -

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10-02-2004, 01:43 PM
  #35
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Originally Posted by Tom_Benjamin
I disagree. This is exactly the problem with the Levitt report. He did look at the NBA way of of defining revenues. The NHLPA rejects it for reasons that are fairly obvious. Every team is a complicated business that splits the revenue differently between the rink, or the broadcaster or a similar affiliated business.

An obvious example is in Vancouver. The Levitt methodology severely understates the Canuck revenue. Levitt divided the luxury box and advertising dollars according to attendance at all events rather than reality. Sponsors at GM Place don't pony up because of the Dog shows, concerts or other events at GM Place. They pony up because of the Canucks. The NHLPA doesn't want a slice of the Dog show money, but they don't want the Dog show to get Canuck money either. They don't want a convention of Jehovah's Witnesses to funnel Canuck money into GM Place coffers.

When the Canucks worked out their deal with the BC Lottery corporation, most of the money put up by the Lottery went to board advertising and radio spots. Instead of the team getting 100% of that revenue, it got a lot less in the reports sent to the NHL.

Levitt allocates that revenue by attendance at all GM Place events. If the Molson Indy pulled 200,000 fans through GM Place looking at old cars during the weekend, perhaps 20% of that Lottery money went to GM Place rather than the Canucks. (This would be true even if the advertising on the boards was not even seen by the Indy fan wandering around the GM Place concourse.) The same thing is true of the luxury box revenue. That revenue is divided according to attendance in the Levitt system even though without the Canucks, zero boxes are sold.

Every team situation is different. The Levitt report takes all the teams, declares a formula doesn't fit any situation and pretends that "designated hockey revenues" are actually the revenues that are generated by hockey. That's absurd. In Vancouver, GM Place would not exist without the Canucks. It would not be named GM Place. There would be virually zero advertising revenue if the hockey team was not there. Nobody would buy luxury boxes.

This is why the NHL was embarassed by the Flyer revelations. Under the URO system that artificially divides up the revenues between the affiliated entities, the Flyers lost money. When the Flyers divide up the revenues according to their own business model, the Flyers make money. Which is more accurate?

Or take Vancouver again. They made money even under the Levitt formula. (Cobb was quoted at the time as saying it was $10 million.) When they were looking at selling the team however, the profits balloon to $20 million in 2002-2003. Why? Because the Canucks split the revenues between GM Place and the team differently than Levitt did. Which is more accurate? Who can tell?

You cannot tweak it to fit hockey because there are 30 different business models. The percentage of the revenue allocated to hockey should not be the same in New York as it is in Vancouver. Any artificial division designed to fit all teams will be wrong for virtually every team. The NHLPA is against any artificial division because they can't sort out the real from the unreal.

They want each individual business to decide what their real hockey revenues are and plan accordingly. In fact, all the teams do do that. They generate a single URO that bears no relationship to the way the business is actually structured. Everybody has two sets of books. One is internal that reflects the actual business structure, and the other is for the NHL. The NHL wants to negotiate a one size fits all definition of revenue and the NHLPA wants nothing to do with that.



I don't think it almost worked. The players had no intention of ever agreeing. They wanted the individual reports because they wanted to know how the losses split out given this artificial system. While the system is obviously bogus, the individual team reports allowed the NHLPA to say, "Look at which teams are actually losing the money, even under the bogus NHL system of allocating revenues. These losses have nothing to do with the CBA. A new CBA will not fix the problems that occur because the team does not have a good rink or because they can't sell tickets in Florida or Carolina. The new CBA should not try to fix the problems caused by Ranger, Capital or Blue incompetence."

The NHLPA does not believe the numbers because they are not real.

Tom
thank-you

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10-02-2004, 08:38 PM
  #36
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Originally Posted by mr gib
i know the 5 percent rollback was a bit laughable but as was said it's a starting point - incidentally the rollback amounted to what the league lost as reported in the levitt report -
Again, I'll ask again what percentage of revenue did the players agree to limit their salary to?

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10-02-2004, 08:43 PM
  #37
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Again, I'll ask again what percentage of revenue did the players agree to limit their salary to?
well their whole issue is they dont want to tie salaries to revenue.

you know that, why are you wasting time ?

dr

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10-02-2004, 08:59 PM
  #38
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Quote:
Originally Posted by Tom_Benjamin
I disagree. This is exactly the problem with the Levitt report. He did look at the NBA way of of defining revenues. The NHLPA rejects it for reasons that are fairly obvious. Every team is a complicated business that splits the revenue differently between the rink, or the broadcaster or a similar affiliated business.

An obvious example is in Vancouver. The Levitt methodology severely understates the Canuck revenue. Levitt divided the luxury box and advertising dollars according to attendance at all events rather than reality. Sponsors at GM Place don't pony up because of the Dog shows, concerts or other events at GM Place. They pony up because of the Canucks. The NHLPA doesn't want a slice of the Dog show money, but they don't want the Dog show to get Canuck money either. They don't want a convention of Jehovah's Witnesses to funnel Canuck money into GM Place coffers.

Tom
Sure the Canucks bring in more revenue than a dog show, but they should also pay the equivalent increase in rents for the same reasons. If the luxury box aren't really used during dog shows then the full cost should be born by the events that do use them, ie hockey. You see the players claiming more revenue but not claiming the increase in expenses that comes with it. After all the dog show isn't going to want to pay for them if its not using them, doesn't really need them and isn't profitable for them.

What would a $300m building rent for? Unlike houses most of these building are finished as hockey arenas after 30 years (how many 30 year old hockey arenas are there still going around, and how many of those are due for overhauls/replacement). 5% interest on the loan would be $15m, 3% depreciation for another $10m, land taxes+rates+fees for millions, running costs, management fees, profit, etc. I'd think something around $30-40m would not be unreasonable year rental (can you think of a better value). Hockey would, as the most important/"profitable" user bear a disproportionate amount of that rental.


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10-02-2004, 09:08 PM
  #39
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Originally Posted by DementedReality
well their whole issue is they dont want to tie salaries to revenue.

you know that, why are you wasting time ?

dr
Gib seems to think the players have put forward some sort of offer, I just want to know what the % of revenue they'll settle for was.

The players have made no such offer. No will they. They have no serious intention of compromising with the NHL, and the NHL has no serious intention of compromising with them in return. The player won't make an offer either, they want the status quo to reign supreme. In order for that they have to offer 75% of the NHLs revenue and 70% on their calculations. Just making an offer that high would embarass them, so they won't say it publically and will hide behind "market value" and "owners set the salary" statements.

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10-02-2004, 10:51 PM
  #40
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Gib seems to think the players have put forward some sort of offer, I just want to know what the % of revenue they'll settle for was.

The players have made no such offer. No will they. They have no serious intention of compromising with the NHL, and the NHL has no serious intention of compromising with them in return. The player won't make an offer either, they want the status quo to reign supreme. In order for that they have to offer 75% of the NHLs revenue and 70% on their calculations. Just making an offer that high would embarass them, so they won't say it publically and will hide behind "market value" and "owners set the salary" statements.
the players dont care if they only get 55% or if they get 90%, they believe its up to the owners to decide by setting budgets for their team.

the fact is, with all the ways a team can generate revenue (and expenses) the players figure this is the *fairest* way to determine what the owner should pay them, not some artificial cap. if the team can only spend 15m, then so be it.

dr

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10-02-2004, 10:56 PM
  #41
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Originally Posted by DementedReality
the players dont care if they only get 55% or if they get 90%, they believe its up to the owners to decide by setting budgets for their team.
You honestly believe that if the "market" dictated that salaries went down to 25% of revenues, the players would be perfectly happy with that?

Obviously not, and Goodenow all but admitted as much when he talked about how the "offer" they put on the table was against the players' best interests.

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10-02-2004, 11:13 PM
  #42
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You honestly believe that if the "market" dictated that salaries went down to 25% of revenues, the players would be perfectly happy with that?

Obviously not, and Goodenow all but admitted as much when he talked about how the "offer" they put on the table was against the players' best interests.
the players may not be happy, but they would prefer to take that risk. partly because they know the owners wont ever let it get to 25%, the owners have no reason to.

dr

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10-03-2004, 12:27 PM
  #43
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the players may not be happy, but they would prefer to take that risk. partly because they know the owners wont ever let it get to 25%, the owners have no reason to.

dr
dr and tom - get it - the owner's are lurking in the wings with empty wheelbarrows waiting to run to the bank - if they get their - cost certainty - and they won't - you watch how motivated karmanos and wurtz will get -

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10-03-2004, 12:36 PM
  #44
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the players may not be happy, but they would prefer to take that risk.
Exactly. They wouldn't be happy. So when they say it's all about a fair system that gives them what they're worth, they're lying. They want the system that gives them the most amount of money. And they don't seem to care if that happens at the expense of the teams, the league, or the fans.

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10-03-2004, 12:49 PM
  #45
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Exactly. They wouldn't be happy. So when they say it's all about a fair system that gives them what they're worth, they're lying. They want the system that gives them the most amount of money. And they don't seem to care if that happens at the expense of the teams, the league, or the fans.
i've said this many times - not sure if you've boned up with the past history of the down right hatred the owner's and player's feel for each other - the fan's are getting ripped - no doubt about it - don't get me wrong - but - this situation is very very personal - the whole thing just might crumble - which the nhl wants - mark cuban is quoted as saying if the league can get the impasse they want - the new cba will be forced on the player's - then they can cut ticket prices in half - and cut their cost's dramatically - it's deep space - when joe sakic's ripping bettman in the press - wow - case in point - jacobs in boston in '94 personally won a clause that raised free-agency to 32- depending on birthdate - so he could ****** cam neely - source - russ courtnall - team 1040 vancouver -


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10-03-2004, 01:25 PM
  #46
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Exactly. They wouldn't be happy. So when they say it's all about a fair system that gives them what they're worth, they're lying. They want the system that gives them the most amount of money. And they don't seem to care if that happens at the expense of the teams, the league, or the fans.
thats not what i said.

next.

dr

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10-03-2004, 01:28 PM
  #47
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thats not what i said.
No?

Quote:
Originally Posted by DementedReality
the players may not be happy, but they would prefer to take that risk.

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10-03-2004, 01:53 PM
  #48
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No?
you said all they wanted was a system that gives them the most amount of money, i said they want a system where the owners can choose to give them 25% or 100% of the league revenues.

i also said they wouldnt be happy with only 25%, but they would take that risk.

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10-03-2004, 02:23 PM
  #49
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you said all they wanted was a system that gives them the most amount of money, i said they want a system where the owners can choose to give them 25% or 100% of the league revenues.
But we don't even have that system now. We have a system where one GM can make a huge difference for years to come.

I think you'd have to be pretty naive to believe Goodenow's "the players only want what they're worth" rhetoric. It's so blatantly untrue, it's not even funny. If that's true, then why:

1) does Goodenow say his offer was extremely fair for the NHL, yet against the players' best interests?

2) doesn't the NHLPA accept a salary structure based on revenue? You can't really get more fair than that.

3) do players even have agents or demand raises or hold out? From what the NHLPA would have you believe, the owners are just gift-wrapping these massive salaries anyway; the players have no role in increased salaries.

Not one NHL player is losing money, and if they are, it's not because of hockey. Doesn't sound very much like the situation of some teams, does it?

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