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Welcome to TVBR's Daily Epaper
Volume 23, Issue 153, Jim Carnegie, Editor & Publisher
Tuesday Morning August 8th, 2006

TV News ®

LIN sees pacing picking up; Puerto Rico sale next month
After reporting Q2 pro forma revenues up 1%, new LIN Television CEO Vincent Sadusky said Q3 is pacing up in the mid single digits on a pro forma basis. At this point, he is expecting Q3 to finish in that up mid single digits area on a pro forma basis. That would work out to a revenue gain for the quarter, including acquisitions, in the low 20% range, so Sadusky is feeling pretty good about how the company is performing after taking over as CEO after the retirement of Gary Chapman. Sadusky said a search is underway to name his own successor as CFO. A big balance sheet moment for LIN could come next month. Sadusky said the company is evaluating offers for its Puerto Rico stations and will likely announce a deal in September. LIN announced earlier this year that it would sell the Puerto Rico operations to pay down some of its debt. Total debt outstanding as of June 30th was 989.8 million, which worked out to leverage of 7.2 times under its credit agreement.

SBS pleased with TV investment
In its second quarter of operating its first TV station, WSBS-TV (Ch. 22, Ind.) Miami, Spanish Broadcasting System (SBS) reported that the operation was on target, generating 1.4 million in Q2 revenues and posting an operating loss of 5.3 million. "Mega TV has established itself as a viable player in the Miami market," SBS CEO Raul Alarcon told analysts in his quarterly conference call. For Q3 SBS is again projecting that the TV stations will lose 5-6 million, but Alarcon refused to be drawn into predicting when it will hit break-even.

Dueling bids for Andrew Corporation
A second bidder is making a play for Andrew Corporation. CommScope has offered to buy the maker of wireless equipment, including broadcast transmitters, for 9.50 per share, or a total value of 1.7 billion. CommScope, a major coaxial cable equipment manufacturer, hopes Andrew shareholders will find its all-cash offer superior to the pending deal to merge Andrew with ADC Telecommunications (6/1/06 TVBR #107). That all-stock deal was initially valued at two billion, but is now worth much less as ADC's stock has plunged in value. Noting that its bid constitutes a 20% premium to where Andrew's stock closed on Friday, CommScope said it hoped the board of directors and Andrew would find it a "superior proposal" to the ADC merger. CommScope said there was no financing condition on its bid - that it had already lined up the money from Bank of America and Wachovia Bank.


Emmis' stock takes a nosedive
Trading volume shot up to about seven times normal as traders bailed out of Emmis stock yesterday, following Friday's after-market announcement that CEO Jeff Smulyan had dropped his 15.25 per share buyout offer. From the starting bell the stock dropped about 20% from Friday's closing price of 14.52 and ended the day down 19.2% at 11.73. In a note to investors, Wachovia Securities analyst Marci Ryvicker said the withdrawal by Smulyan reaffirmed her view that radio stock prices are still a couple of multiples above where they would become attractive for leveraged buyouts. She is now valuing Emmis at 10-12 a share. A similar view came from Mark Wienkes at Goldman Sachs, who put a target of 11 on the stock. Anthony DiClemente at Lehman Brothers issued a new target range of 11-14. None of the analysts are expecting Smulyan to come back with a new offer, nor do they expect anyone else to make a take-out bid for the company, since Smulyan has super-voting stock which could block any such buyout.

Can NY Dem put FCC between CBS and CWA?
Congressional media watchdog Rep. Maurice Hinchey (D-NY) and some of his colleagues have taken note of negotiations between CBS and the Communications Workers of America, and are "...concerned about CBS's desire to consolidate newsrooms and remove news producers from bargaining units, thus enabling corporate interests to infiltrate the newsroom." In a letter to FCC Chairman Kevin Martin, they wrote, "The Writers Guild of America-CBS contract protects workers, as well as audiences. This contract ensures that news producers, those who must apply journalistic standards and make decisions as to which stories are broadcast, remain insulated from corporate influence and maintain independent judgment. Removing these gatekeepers of information from the Guild jeopardizes journalistic integrity, making them more vulnerable to CBS's commercial demands. Without such safeguards, how can the public trust the information they receive?" They continued, "It is the job of the Federal Communications Commission to prevent commercial values from undermining democratic values and ensure that broadcasters serve the public interest. Attempts to maximize profits at the expense of diversity in news reporting threaten democratic values and have drastic consequences for our nation." Talks between CBS and CWA are expected to resume later this month.

TVBR observation: Without taking a stand on this issue one way or the other, we have to say that it is our considered opinion that the FCC doesn't have the first shred of authority to step into the middle of this network/union negotiation.

GOP holds House odds for 2006
Democratic senatorial candidates have a cash edge heading into November, but over at the House of Representatives the advantage runs the other way. But both groups are way ahead of their 2004 totals. With 541.86M in receipts pulled in (compared to 459.89M last election), the Republicans hold a 296.12M to 245.74M advantage. they are also ahead in cash on hand, 199.7M to 167.02M. However, the vast bulk of that advantage is cached in incumbent warchests. Republican defense funds total 176.25M compared to only 118.8M for their Democratic counterparts. Democratic challengers, meanwhile, have 33.68M on hand, compared to only 9.88M banked and ready to spend by Republican challengers. Democrats have a 1M edge when it comes to candidates for open seats, 14.54M to 13.57M.

TVBR observation: The challenger total is a strong sign that Democrats have Republican seats in their sights. The 33.68M is double and then some over 2004, when they only had 14.81M at their disposal. The Republican total is nearly flat, but in fact slightly less than 2004, dropping from 9.95M to 9.88M. We would guess that House candidates will direct a higher percentage of advertising expenditures toward radio than will candidates for statewide office.


Wall Street Media Business Report TM
Q2 2006 Conference Calls
Up quarter for LIN
In his first quarterly conference call as CEO, Vincent Sadusky was able to report to Wall Street that LIN Television had an up quarter. Q2 revenues were up 17% to 99 million. That included some acquisitions, so pro forma revenues were up only 1% - but still up. Sadusky credited the gain in revenues to greater political advertising than expected and better-than-expected revenues from newly acquired stations. LIN took some big one-time charges in Q2, including a 5.6 million charge related to the retirement of long-time CEO Gary Chapman. The big one, though, was a 333.6 million charge for impairment of its broadcast license and goodwill. Because of those big charges, LIN had to report an operating loss of 315.1 million, versus an operating profit of 24 million a year ago.

SBS posts double-digit revenue growth
"We're not seeing a downturn in advertising," Spanish Broadcasting System (SBS) CEO Raul Alarcon told analysts, as he forecast that Spanish media companies would continue to outpace their English brethren. Q2 revenues for SBS were up 10% to 48.8 million, including 1.4 million in revenues from its new TV station in Miami. Radio revenues were up 6% to 47.4 million. Operating income declined 21% to 11.9 million, but that includes the TV loss and some special items. Same station operating income before depreciation and amortization and a gain on the sale of assets was up 20% to 18.3 million. Going forward, SBS is predicting that the TV station will post a loss of 5-6 million in Q3, while radio revenues and radio operating income will both be up in the low single digits, with local pacing stronger than national.

Fisher turns to profit
Fisher Communications had good news for shareholders. The company reported Q2 income from continuing operations of 1.8 million, compared to a loss of 1.5 million a year earlier. Revenues rose 9% to 40.2 million. Much of that was due to the TV operations, including the two big-market ABC affiliates in Seattle, WA, and Portland, OR, but company officials said radio also improved, with local the primary driver. The company is expected to give more detail on the radio and TV divisions when it files its 10-Q with the SEC in a few days. Fisher has deals pending to sell its small-market radio stations and to acquire duopoly full-power TV stations in Seattle and Portland.


Ad Business Report TM

Donchin: eBay system is worth a try
Of course, some networks in the industry are pretty standoff-ish on the new pilot program to test online buying and selling of advertising (admarketpilot.com), which is working with eBay to develop and manage the framework (8/7/06 TVBR #152). They've voiced concerns about everything from losing control of inventory to it not being able to deliver the multifaceted marketing packages that advertisers demand. Yes, an e-media exchange doesn't address deal nuances like product integration, negotiations and strategic planning. However, Andy Donchin, Carat Americas Director of Broadcast Buying, had a few good points. He agrees it's not going to work for everyone, but it's worth exploring. "The growing number of television options may necessitate another means to negotiate it all. As we move forward and we get more and more immersed in the digital area, it's not going to be just ABC, but ABC-3, ABC-4, ABC-5. How are we going to negotiate all of these networks? We would have to add headcount galore." He said the agency side is just looking for alternative systems, and while there are indeed many out there now-from SWMX to DMarc to Spotbuy.tv-the strong will survive. "I firmly believe the system we have in place now works well-the upfront system. But there is definitely enough media out there to maybe support an auction system. I don't think we're going to be buying The Superbowl on an auction, but I think with the explosion of networks out there-HD networks, more cable networks, etc.-this could be a way to handle some of the negotiations." Andy said one of his clients are in the industry test of the system. He adds, "I think it's kind of stupid of us to say from the start it's not going to work. Not only are you going to have some networks that aren't going to want to do it, but some clients as well. But it could work for some on both sides. So let's give it a go and if it fails, it fails. But hey, it could work."

TVBR observation: It's apparent that multiple systems will be in the space from here on out. Yes, the strongest will survive in the end, but as far as auctions for media inventory go, it should be interesting to see who ends up surrendering their inventory-beyond remnant and last-minute scatter-to such a system.

Google in 900M deal
with Fox Interactive

Seeing gold in MySpace and other Internet sites owned by News Corporation's Fox Interactive Media, Google has agreed to a deal whereby it will pay Fox Interactive a minimum of 900 million bucks to be the exclusive search and keyword targeted ad sales provider for those sites from Q1 2007 through Q2 of 2010. The agreement calls for Google to power web, vertical and site specific search for MySpace.com and the majority of Fox Interactive Media properties. Google will be the exclusive provider of text-based advertising and keyword targeted ads through its AdSense program, for inventory on Fox Interactive Media's network. Google will also have a right of first refusal on display advertising sold through third parties on Fox Interactive Media's network. "Our partnership with Google underscores News Corp's continued evolution to become a powerful force in the digital media marketplace. To have come this far and gained this much momentum in just over a year is truly remarkable," said News Corp. COO Peter Chernin in announcing the deal. What all does Fox Interactive include? From the official announcement: "Fox Interactive Media (FIM) is an integrated network of sites offering socially rich media experiences centered on entertainment, news, information and self-expression. The company's network includes Internet assets from News Corp., including the highly trafficked Foxsports.com, Americanidol.com and Fox.com. FIM also owns and operates such category leaders as MySpace.com, the number one social networking site on the Web; Scout.com a dynamic collegiate and pro sports network; and IGN Entertainment, a network of leading gaming and entertainment sites including men's lifestyle site AskMen and premier destination for movie-goers Rotten Tomatoes among others."


Management Business Report TM
The Art of the Interview:
"Hiring the Best"
By Julie Ballard-Lebe, a 19 year veteran of CBS Television Stations and former Senior Vice President/Director of Sales managing 7 of their 10 national sales offices. She's now running Ballard Executive Search in LA (www.BallardExecutiveSearch.com). Yesterday, Julie discussed why hiring the best employees has to be the single most important and most challenging responsibility facing media sales management today and began her list of good tips in the process (8/7 TVBR #152).
| Read More Tips... |


Media Markets & Money TM
Close encounter in Atlanta
WATL-TV has officially changed hands. The WB-to MNT affiliate is going from Tribune to Gannett, and into a duopoly with NBC WXIA-TV, for 180M. It gets Tribune well on its way to its goal of 500M in asset sales, along with the 17M sale of an Albany NY television station and a 46M sale of Time Warner stock. For Gannett, it represents its third TV duopoly market. "Atlanta is a first-rate television market, and we are pleased to be able to expand our operations there," said Roger Ogden, president and CEO of Gannett Broadcast. "There is much added value for our viewers in this arrangement, and we are confident they will be excited by the end result."


Washington Media Business Report TM
Anti-consolidation heat wave blazes on
The FCC's ongoing consideration of the Third Circuit remand of media ownership rules is not sneaking up on anybody this time around. Watchdog groups which keyed the protest before and after Michael Powell's ill-fated attempt have been waiting for the issue to be placed back on the table. And on Capitol Hill, legislators are continually reminding the FCC that they are being closely watched. The latest reminder comes from Diane Watson (D-CA), who used the Huffington Post to air the topic yet again. Quoting 2000 figures, who noted that only 4% of commercial radio station licenses and 1.9% of commercial TV licenses were minority owned. (A 2004/2005 FCC study listed 460 out of 12,844 stations with minority ownership greater than 50%, about 3.6% of all licenses.) Watson wrote that consolidation seems to have taken minority ownership in the wrong direction. "We need ownership rules that will expand opportunities for minorities to enter the market, not limit them. Keeping minority owners out of the market is detrimental not only to them, but to the consumers they wish to serve."

TVBR observation: You almost never see a politician grab the bully pulpit looking to help big media companies get even bigger, Fred Upton (R-MI) excepted. Anyway, we still do not know exactly what Chairman Kevin Martin is going to try to do. Stay tuned.


Cable Business Report TM
FCC stands with NFL
as TW thinks about court

The Federal Communications Commission is sticking by its decision to force Time Warner Cable to carry the NFL Network on recently acquired Adelphia and Comcast cable systems (8/4/06 TVBR #151). The FCC turned down a TW appeal of its earlier decision, causing TW to mull over possible court action. At issue is the fact that TW did not have a carriage agreement in place with NFL on any of its existing systems, and the two parties failed to reach an agreement prior to TW's takeover of the newly-acquired systems. TW pulled the channel, depriving subscribers of 30-day notice. NFL protested and the FCC said, without ruling in favor of either side, that NFL had established sufficient evidence that it may win on merit to warrant interim carriage. TW protested that decision, but the FCC held its ground. Media Bureau spokesperson Rebecca Fisher said, "The Media Bureau has denied Time Warner's request for a stay, petition for reconsideration and a referral to the full Commission. The Commission's obligation is first and foremost to the consumer, not to the private interests of Time Warner or NFLN, and because of this we again find continued carriage to be in the public interest. We believe that on balance the granting of interim relief is warranted." TW believes the FCC has overstepped its authority and will most likely seek relief in the court system.


Hollywood Media Business Report TM
Actors unions and advertisers extending contract
The actors unions and numerous larger national advertisers have reached a tentative deal to extend their contract for two more years, into 2008. The agreement covers 2 billion in electronic and new media ads that feature the celebs and actors. The pact still has to be approved by The Screen Actors Guild and the American Federation of Television and Radio Artists and would result in a 6% pay raise.


Ratings & Research
Insight signs for
Nielsen VOD tracking

Nielsen Media Research and Insight Communications announced that Insight will participate in Nielsen's new on-demand transactional reporting service, NORA (Nielsen On Demand Reporting & Analytics). Under terms of the agreement, Nielsen Media Research will analyze and report non-personally identifiable VOD orders from Insight's cable set-top boxes using NORA, a service that Nielsen began testing earlier this year. With VOD data from Insight, Nielsen will be able to integrate additional data sets into the NORA service and provide Insight with significant viewing preferences and trends. "Insight is committed to the growth of the VOD platform, and as such we recognize the importance of accurately measuring customer usage," said Insight Sr. VP Kevin Dowell. "Our objective is to work with all the leading VOD service providers to better understand and report overall consumer viewing preferences in conjunction with other forms of video delivery, including television viewing," said Holly Leff-Pressman, Sr. VP and general manager of Nielsen's On-Demand Service. Insight is the nation's 9th largest MSO.


Stock Talk
Bad day for broadcast stocks
Radio stocks were really beaten up after disappointing Q2 results from Radio One and the first day of trading after Jeff Smulyan withdrew his buyout offer for Emmis, but there appeared to be some spillover into TV as well. Meanwhile, the Dow Industrials fell a mere 21 points to 11,219 with traders cautious ahead of this week's Fed meeting.

Emmis, which still has two TV stations (both for sale), fell 19.2%. Radio/TV operator Saga fell 8.5%. Among pure play TV stocks, the worst performer was Gray Television, with its common down 3.7%. LIN fell 2.4% after reporting its Q2 results.


Stocks

Here's how stocks fared on Monday

Company Symbol Close Change Company Symbol Close Change

Acme

ACME

5.21

+0.02

LIN TV

TVL

6.50

-0.16

Belo

BLC

16.23

-0.12

McGraw-Hill

MHP

56.46

-0.77

CBS CI. B CBS

26.15

+0.35

Media General

MEG

37.83

-0.09

CBS CI. A CBSa

26.16

-0.19

Meredith

MDP

46.95

-0.63

Clear Channel

CCU

28.54

-0.41

News Corp.

NWS

19.76

+0.02

Disney

DIS

29.39

-0.51

Nexstar

NXST

4.51

+0.17

Emmis

EMMS

11.73

-2.79

NY Times

NYT

22.10

-0.38

Entravision

EVC

7.36

-0.12

Ion Media

ION

0.93

unch

Fisher

FSCI

39.93

+0.56

Saga Commun.

SGA

7.23

-0.67

Gannett

GCI

53.93

+0.04

SBS

SBSA

4.52

-0.08

Gen. Electric

GE

32.69

-0.11

Scripps

SSP

41.36

-0.52

Granite

GBTVK

0.14

unch

Sinclair

SBGI

8.08

-0.20

Gray

GTN

6.22

-0.24

Time Warner

TWX

16.38

-0.18

Gray, C1. A

GTNa

6.70

-0.14

Tribune

TRB

29.77

-0.23

Hearst-Argyle

HTV

21.01

unch

Univision

UVN

33.44

-0.02

Journal Comm.

JRN

10.49

-0.05

Wash. Post

WPO

732.43

-21.98

Lincoln Natl.

LNC

56.83

+0.15

Young

YBTVA

2.88

-0.12


Bounceback

Send Us Your OpinionsWe want to
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a photo to tvnews@rbr.com


TV Media Moves

Changes at Nielsen
Catherine Herkovic has been named General Manager in charge of the Local Business Unit of Nielsen Media Research, responsible for sales and marketing, production and delivery of data to local clients, product services, information technology and quality assurance for the local business. Herkovic had been Sr. VP in charge of Sales and Marketing for the Nielsen Station Index. Herkovic succeeds Jack Oken, who takes on a new, expanded role at Nielsen Media Research as General Manager, Strategic Measurement Initiatives.

Ballard starts own firm
Julie Ballard-Lebe recently left CBS to start her own executive search firm, Ballard Executive Search (ballardexecutivesearch.com), where she will seek to help media companies make "smart hiring decisions." TVBR was not aware of the change when we published an article yesterday (8/7/06 TVBR #152) that she had written while still at her previous job.


Below the Fold

Wall Street Media Business Report
Up quarter for LIN
Q2 revenues were up 17% credited the gain in revenues to political...

SBS posts double-digit rev growth
Forecasting Spanish media would outpace their English brethren...

Ad Business Report
Agencies sound off on eBay
Donchin: system is worth a try but also says the strong will survive...

Media Business Report
The Art of the Interview:
Hiring the Best, one key Check the references...

Media Markets & Money
Close encounter in Atlanta
WATL-TV has officially changed hands

Ratings & Research
Insight signs up
For Nielsen VOD tracking as TVBR has the terms of the agreement...


Stations for Sale

For Sale 100+ Market
Spanish TV
Network Affiliate $1,500,000
100,000 watt FM $1,200,000
$2,500,000 combo price
or sold separately
barbaraboff@bellsouth.com

New York City
2 LPTVs reaching 12 million people.
$8mil & $4 mil. or $10 mil for BOTH
Kozacko Media Services
georgewkimble@aol.com
520-465-4302


More News Headlines

Teaming up in Phoenix
Meredith-owned KPHO-TV (Ch. 5, CBS) and Bonneville International's KTAR-AM announced a partnership for news coverage in Phoenix. Through the joint venture, the stations say they will be able to extend their coverage, offering more breaking and investigative news coverage as well as traffic and weather information. "It just makes sense to combine the resources of two of the Valley's strongest newsrooms," said KPHO VP/GM Steven Hammel. "The Valley overwhelmingly turns to KTAR and CBS 5 for breaking news. The combination of our talent, experience, and aggressiveness will allow both of us to better serve our audiences," said Russ Hill, KTAR program director. The partnership also will impact the stations' Web sites. KTAR's Web site will soon provide video links to many news stories, and the CBS 5's Web site will have the added benefit of more journalists providing local content.

Star Alliance taps DDB
Star Alliance Services, the organization serving the world's leading airline alliance, has appointed DDB to handle its global communications. The appointment follows a three search. DDB will be responsible for all global marketing and loyalty communications for the Star Alliance brand, with all work being centrally produced and distributed from Europe while making maximum use of the DDB global network and reach. Star Alliance members include Air Canada, Air New Zealand, ANA, Asiana Airlines, Austrian, bmi, LOT Polish Airlines, Lufthansa, Scandinavian Airlines, Singapore Airlines, South African Airways, Spanair, SWISS, TAP Portugal, THAI, United, US Airways and VARIG Brazilian Airlines.

Wendy's forms innovations and
strategy group

Wendy's has created an innovations and strategy group to oversee R&D, insights and engagement and interaction. The new group will report to Chief Marketing Officer and EVP Ian Rowden, who has current Wendy's execs to the group-SVP Mike Watson (overseeing operations innovation); SVP Lori Estrada (for research and development); and VP Casey Minton (for consumer research).


July RBR/TVBR
Digital Magazine

Take a look at what's in the July RBR/TVBR Solutions Magazine:
July is our annual sports media and marketing issue. This year, Basketball News Services' lead NBA analyst and Five-Star Basketball Report host Steve Kyler provides opinions on what works and what doesn't work in sports radio;
AND1 Brand Marketing Manager Taylor Duffy talks about marketing and branding his company's basketball shoes; Emmis Sports Marketing's David Barnett talks about making money off of sports programming; and Entercom's WEEI Boston Director of Programming and Operations Jason Wolfe writes about how he's helped build WEEI into such a powerhouse.

We interview Magna Global
CEO Bill Cella.

In Media, Markets and Money, the logjam has finally broken and station trading is picking up, in both radio and television. Some prominent brokers tell RBR/TVBR what has changed - and why.


Read RBR/TVBR in 2 simple steps:
1.Create a simple account with Zinio and download the Zinio Reader.
2. You can then download the
July Issue of RBR/TVBR


TVBR Radar 2006
Television News you won't read any where else. TVBR--First, Accurate, and Independently Owned.

Advertisers launch eBay experiment
TVBR first reported in May that an advertising industry taskforce was working on a pilot program to test online buying and selling of advertising - and we reported hints that it would involve eBay 5/11/06 TVBR #93. Sure enough, the task force announced Friday that it has launched a website for interested participants to sign up - admarketpilot.com - and is working with eBay to develop and manage the framework. Advertisers already committed to participate include Wal-Mart (whose Julie Roehm was an early advocate of the project), Toyota, Microsoft, Hewlett-Packard and Home Depot.

TVBR observation: There are certainly Internet-based advertising buying and selling sites already in operation for various media. What is different about this one is who is running it - the advertisers and agencies, who obviously will be seeking a system designed to do business the way they want to do business. That's not necessarily a bad thing for broadcasters, but they should want to offer some input on how the platform should function as viewed from the other side.

Publisher note: Just a few agency people have a way of running head first to get what they want before thinking with which they have to do business with to get their ad and brands across. The broadcaster. Over the last few weeks I have been fielding a number of questions on internet-based buying services being asked the difference and my only answer today is when I hear Google I only think Search Engine. Now with eBay I think Bidding on someone's used goods. On any internet service my recommendation to our colleagues is to do your own research and you determine who you want to do business with and go a little slow as this is no time to be running into the wall head first.
08/07/06 TVBR #152

The Art of the Interview:
"Hiring the Best"

Hiring 'the best' employees has to be the single most important and most challenging responsibility facing media sales management today. It sets you and your company up for maximum performance in an ever-changing competitive environment. Read your first steps in TVBR
08/07/06 TVBR #152

Executive comment
In regards to... Robert Neil and David Field - Less really IS more, and that's a problem.

I'm so sick of reading fabricated, hucksteristic crap about commercial clutter on radio! "Clutter on radio" is nothing more than a public company windmill to tiff at for the prurient benefit of light-weight Wall Street investors, and to a lesser extent media queens, who can not see through the flimsy smoke screen. Savvy investors and media buyers know the charge that radio needs to cut commercial clutter is unadulterated baloney. Radio is about QUALITY, including quality of commercials. It is not about HOW MANY commercials. ... Yes there is more see
08/04/06 RBR #151


Visit MediaHeadHunters.com

Regional Account Executive
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