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JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
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domer1978 Offline
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JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
CNBC’s Jim Cramer told TheStreet.com that Disney’s reorganization plan announced this week is writing on the wall for ESPN. “I think it’s really about getting rid of ESPN,” Cramer said of the plan to accelerate a direct-to-consumer strategy. The main focus for Disney going forward will be streaming, streaming and more streaming.

The focus to base the company squarely on streaming and Disney+ has terrestrial ESPN in a tough spot within a company that just announced it will shift away from traditional methods of content distribution.

https://www.outkick.com/jim-cramer-think...neys-plan/
10-15-2020 04:51 PM
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
It's not a bad idea.

The combination made sense back when Disney needed sports content to put on ABC. ESPN on ABC was a textbook example of synergies.

But where are the synergies going forward? How do ESPN and Disney benefit each other in a world where the majority of revenue comes from streaming?
10-15-2020 05:16 PM
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quo vadis Offline
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
This doesn't make much sense to me. Far more important than the method of delivery is the ownership of valuable intellectual property, and ESPN owns a ton of valuable sports property. Plus, ESPN has proven to be a very adapt streaming platform. ESPN+ has done very well and can easily handle all of the current properties.

The only way this would make sense is if Disney just transferred all the ESPN sports properties to ABC, and then jettisoned the ESPN shell. Even then, the ESPN brand name has value.
10-15-2020 05:19 PM
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-15-2020 05:19 PM)quo vadis Wrote:  This doesn't make much sense to me. Far more important than the method of delivery is the ownership of valuable intellectual property, and ESPN owns a ton of valuable sports property. Plus, ESPN has proven to be a very adapt streaming platform. ESPN+ has done very well and can easily handle all of the current properties.

The only way this would make sense is if Disney just transferred all the ESPN sports properties to ABC, and then jettisoned the ESPN shell. Even then, the ESPN brand name has value.

ESPN is a money loser. It was profitable when it was bundled with basic cable packages and essentially subsidized by by
Cable owners. Cord cutting has really hurt that business model.
10-15-2020 06:31 PM
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quo vadis Offline
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-15-2020 06:31 PM)Sicembear11 Wrote:  
(10-15-2020 05:19 PM)quo vadis Wrote:  This doesn't make much sense to me. Far more important than the method of delivery is the ownership of valuable intellectual property, and ESPN owns a ton of valuable sports property. Plus, ESPN has proven to be a very adapt streaming platform. ESPN+ has done very well and can easily handle all of the current properties.

The only way this would make sense is if Disney just transferred all the ESPN sports properties to ABC, and then jettisoned the ESPN shell. Even then, the ESPN brand name has value.

ESPN is a money loser.

Covid aside, ESPN hasn't lost money in many, many years. Don't confuse declining subscriber base for actually losing money.

07-coffee3
10-15-2020 06:42 PM
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Frank the Tank Offline
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-15-2020 06:42 PM)quo vadis Wrote:  
(10-15-2020 06:31 PM)Sicembear11 Wrote:  
(10-15-2020 05:19 PM)quo vadis Wrote:  This doesn't make much sense to me. Far more important than the method of delivery is the ownership of valuable intellectual property, and ESPN owns a ton of valuable sports property. Plus, ESPN has proven to be a very adapt streaming platform. ESPN+ has done very well and can easily handle all of the current properties.

The only way this would make sense is if Disney just transferred all the ESPN sports properties to ABC, and then jettisoned the ESPN shell. Even then, the ESPN brand name has value.

ESPN is a money loser.

Covid aside, ESPN hasn't lost money in many, many years. Don't confuse declining subscriber base for actually losing money.

07-coffee3

Yes, this is true. While declining, ESPN is still actually the single most profitable segment of Disney BY FAR. It isn’t even close.

In contrast, Disney+ is a massive money loser as of now (despite what the general public might think). That’s not to say that it won’t turn profitable (which I have faith in happening) - it’s just going to take several years.
10-15-2020 07:21 PM
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Frank the Tank Offline
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-15-2020 05:16 PM)Captain Bearcat Wrote:  It's not a bad idea.

The combination made sense back when Disney needed sports content to put on ABC. ESPN on ABC was a textbook example of synergies.

But where are the synergies going forward? How do ESPN and Disney benefit each other in a world where the majority of revenue comes from streaming?

I think the synergy is still there because Hulu Live is a pillar of Disney’s strategy... and that platform is most highly dependent on live sports above all else.

The delivery method might be changing (cable to streaming), but it’s still substantively the same content. Sports are truly the only programming that’s worth anything for live TV outside of some awards shows and reality TV (AKA where people still watch commercials). Everything else can be time-shifted.
10-15-2020 07:25 PM
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-15-2020 06:31 PM)Sicembear11 Wrote:  
(10-15-2020 05:19 PM)quo vadis Wrote:  This doesn't make much sense to me. Far more important than the method of delivery is the ownership of valuable intellectual property, and ESPN owns a ton of valuable sports property. Plus, ESPN has proven to be a very adapt streaming platform. ESPN+ has done very well and can easily handle all of the current properties.

The only way this would make sense is if Disney just transferred all the ESPN sports properties to ABC, and then jettisoned the ESPN shell. Even then, the ESPN brand name has value.

ESPN is a money loser. It was profitable when it was bundled with basic cable packages and essentially subsidized by by
Cable owners. Cord cutting has really hurt that business model.

No, it is not a money loser. From the article: “ESPN went from slightly over 100 million cable subscribers in 2010 to slightly over 80 million earlier this year. This is the rough math: Between ESPN and ESPN2, the subscriber fees total about $10 a month. They’ve lost about 20 million subscribers, which is $200 million a month, which is about $2.4 billion a year in lost revenue.”

They are still bringing in about $800 million a month in subscriber fees or $9.6 billion a year in revenue. That is before the advertising revenue. The problem is in the long term and when Disney shareholders ask what is being done to correct the current problem, there is no good answer. It appears that they will continue to lose subscribers. ESPN overpaid for college football, NBA basketball and Monday Night football, so their expenses on sports are exorbitant. I think the long-term outlook is why Cramer thinks they will eventually sell off ESPN. If they did sell it off, it will still be called ESPN. The brand name is very strong. It is still a cash cow, it is just not producing as much as cash as it used to.
10-15-2020 07:34 PM
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
How much would Disney have to charge per ESPN+ and/or Disney+ bundle subscriber per month for all the current ESPN+ content plus the more valuable stuff they air on ESPN, ESPN2, ESPNU, etc?
10-15-2020 07:56 PM
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
Isn’t ESPN responsible for 40% of Disney’s revenue? If so, Disney won’t drop them. They’d be fools if they do it.

And to think Disney just wanted ABC and not ESPN when they bought ABC/Capital Cities in 1995.
10-15-2020 08:07 PM
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-15-2020 07:56 PM)Fighting Muskie Wrote:  How much would Disney have to charge per ESPN+ and/or Disney+ bundle subscriber per month for all the current ESPN+ content plus the more valuable stuff they air on ESPN, ESPN2, ESPNU, etc?

They’re currently charging $12.99 a month for the Hulu/Disney+/ESPN+ bundle.
10-15-2020 08:08 PM
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-15-2020 07:21 PM)Frank the Tank Wrote:  
(10-15-2020 06:42 PM)quo vadis Wrote:  
(10-15-2020 06:31 PM)Sicembear11 Wrote:  
(10-15-2020 05:19 PM)quo vadis Wrote:  This doesn't make much sense to me. Far more important than the method of delivery is the ownership of valuable intellectual property, and ESPN owns a ton of valuable sports property. Plus, ESPN has proven to be a very adapt streaming platform. ESPN+ has done very well and can easily handle all of the current properties.

The only way this would make sense is if Disney just transferred all the ESPN sports properties to ABC, and then jettisoned the ESPN shell. Even then, the ESPN brand name has value.

ESPN is a money loser.

Covid aside, ESPN hasn't lost money in many, many years. Don't confuse declining subscriber base for actually losing money.

07-coffee3

Yes, this is true. While declining, ESPN is still actually the single most profitable segment of Disney BY FAR. It isn’t even close.

In contrast, Disney+ is a massive money loser as of now (despite what the general public might think). That’s not to say that it won’t turn profitable (which I have faith in happening) - it’s just going to take several years.

Yes, which is also why it's a great bargain for us. When ESPN+ launched, I vowed never to buy it, but when I saw what was airing I signed up. That was two years ago and I've never looked back. Just one Saturday night of UFC action is worth the $5 for me, and there's 10x more beyond that.
10-15-2020 08:30 PM
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
ESPN is still the big dog so regardless of how much cable revenues decline they'll still be important. Let me rephrase that; so long as FB, BB, Baseball, Hockey, Soccer are regarded as national events that people pay attention to.

its hard to put the genie back into the bottle. The evolution in news for example has gone from the newspaper to evening news shows, to cable news networks to internet news sites. Sports have gone through the same progression.

If it costs at least $25 dollars to get a cable package which includes ESPN which totals $300 over 12 months it amounts to a PPV bill of $300 spread out over the course of the year. Most of the major events have moved over to ESPN so if you want it you're going to have to pay for it.

Its not what it was 30 years ago where you didn't need cable to watch it.
10-15-2020 09:09 PM
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-15-2020 07:34 PM)SoCalBobcat78 Wrote:  
(10-15-2020 06:31 PM)Sicembear11 Wrote:  
(10-15-2020 05:19 PM)quo vadis Wrote:  This doesn't make much sense to me. Far more important than the method of delivery is the ownership of valuable intellectual property, and ESPN owns a ton of valuable sports property. Plus, ESPN has proven to be a very adapt streaming platform. ESPN+ has done very well and can easily handle all of the current properties.

The only way this would make sense is if Disney just transferred all the ESPN sports properties to ABC, and then jettisoned the ESPN shell. Even then, the ESPN brand name has value.

ESPN is a money loser. It was profitable when it was bundled with basic cable packages and essentially subsidized by by
Cable owners. Cord cutting has really hurt that business model.

No, it is not a money loser. From the article: “ESPN went from slightly over 100 million cable subscribers in 2010 to slightly over 80 million earlier this year. This is the rough math: Between ESPN and ESPN2, the subscriber fees total about $10 a month. They’ve lost about 20 million subscribers, which is $200 million a month, which is about $2.4 billion a year in lost revenue.”

They are still bringing in about $800 million a month in subscriber fees or $9.6 billion a year in revenue. That is before the advertising revenue. The problem is in the long term and when Disney shareholders ask what is being done to correct the current problem, there is no good answer. It appears that they will continue to lose subscribers. ESPN overpaid for college football, NBA basketball and Monday Night football, so their expenses on sports are exorbitant. I think the long-term outlook is why Cramer thinks they will eventually sell off ESPN. If they did sell it off, it will still be called ESPN. The brand name is very strong. It is still a cash cow, it is just not producing as much as cash as it used to.

Yeah but if they keep making less and less money every year, why keep it?
Especially when the money they pay out increases, there is a point in time in very shortly where the revenue won’t be able to pay the expenses.
After the NBA and NFL fiasco with their politics and very low ratings, advertisers are now going to pony the dough.
(This post was last modified: 10-15-2020 09:57 PM by MWC Tex.)
10-15-2020 09:23 PM
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-15-2020 05:19 PM)quo vadis Wrote:  This doesn't make much sense to me. Far more important than the method of delivery is the ownership of valuable intellectual property, and ESPN owns a ton of valuable sports property. Plus, ESPN has proven to be a very adapt streaming platform. ESPN+ has done very well and can easily handle all of the current properties.

The only way this would make sense is if Disney just transferred all the ESPN sports properties to ABC, and then jettisoned the ESPN shell. Even then, the ESPN brand name has value.

ESPN is a brand and its going to streaming too. That's where the Big 12 "network" sans OU and UT is.
10-15-2020 09:26 PM
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-15-2020 09:23 PM)MWC Tex Wrote:  
(10-15-2020 07:34 PM)SoCalBobcat78 Wrote:  
(10-15-2020 06:31 PM)Sicembear11 Wrote:  
(10-15-2020 05:19 PM)quo vadis Wrote:  This doesn't make much sense to me. Far more important than the method of delivery is the ownership of valuable intellectual property, and ESPN owns a ton of valuable sports property. Plus, ESPN has proven to be a very adapt streaming platform. ESPN+ has done very well and can easily handle all of the current properties.

The only way this would make sense is if Disney just transferred all the ESPN sports properties to ABC, and then jettisoned the ESPN shell. Even then, the ESPN brand name has value.

ESPN is a money loser. It was profitable when it was bundled with basic cable packages and essentially subsidized by by
Cable owners. Cord cutting has really hurt that business model.

No, it is not a money loser. From the article: “ESPN went from slightly over 100 million cable subscribers in 2010 to slightly over 80 million earlier this year. This is the rough math: Between ESPN and ESPN2, the subscriber fees total about $10 a month. They’ve lost about 20 million subscribers, which is $200 million a month, which is about $2.4 billion a year in lost revenue.”

They are still bringing in about $800 million a month in subscriber fees or $9.6 billion a year in revenue. That is before the advertising revenue. The problem is in the long term and when Disney shareholders ask what is being done to correct the current problem, there is no good answer. It appears that they will continue to lose subscribers. ESPN overpaid for college football, NBA basketball and Monday Night football, so their expenses on sports are exorbitant. I think the long-term outlook is why Cramer thinks they will eventually sell off ESPN. If they did sell it off, it will still be called ESPN. The brand name is very strong. It is still a cash cow, it is just not producing as much as cash as it used to.

Yeah but if they keep making less and less money every year, why keep it?
Especially when the money they pay out increases, there is point in time in very shortly where the revenue won’t be able to pay the expenses.

The root cause is a move away from cable subscriptions which impacts all sports not just those shown on ESPN.

ESPN still has the clout to force the big leagues into accepting their terms or to not be in front of the majority of viewers. That means accepting less money which translates into less money for the players.

Going after UFC and Top Rank boxing for ESPN+ locks up a segment of viewers for much less. UFC pays its fighters a combined 1 million per fight night and 50 of those a year its only $50 million compared to the NBA where payroll is $130 million dollars per club.

UFC's deal with ESPN comes out to $300 million but with five and six figure paydays that is manageable. Boxing the purses are always adjusted with what the market will pay for the names involved and the situation.

What is the NBA going to do after LeBron James retires? He's the only guy in play for any of the all time great records in the league right now.
10-15-2020 10:10 PM
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-15-2020 07:25 PM)Frank the Tank Wrote:  
(10-15-2020 05:16 PM)Captain Bearcat Wrote:  It's not a bad idea.

The combination made sense back when Disney needed sports content to put on ABC. ESPN on ABC was a textbook example of synergies.

But where are the synergies going forward? How do ESPN and Disney benefit each other in a world where the majority of revenue comes from streaming?

I think the synergy is still there because Hulu Live is a pillar of Disney’s strategy... and that platform is most highly dependent on live sports above all else.

The delivery method might be changing (cable to streaming), but it’s still substantively the same content. Sports are truly the only programming that’s worth anything for live TV outside of some awards shows and reality TV (AKA where people still watch commercials). Everything else can be time-shifted.

The vast majority of the people still get their TV from cable or OTA networks. The multi tiered ESPN Cable+ABC+ESPNPlus model will be the transitional model for some time. Frankly, Im not one who believes cable is going anywhere. Currently, the existing "cable bundle", though not what it used to be, still spins off so much revenue cable has not changed its model much at all. Until you regularly see skinny bundles, a-la-carte, and "pick your favorite 20" type deals---then cable hasnt even begun to really fight back against cord cutting in any serious way. Once cable does begin to fight back---that price difference will largely disappear. Heck, now that the streaming aggregators are being picked of much of their prime content by all the newer stand alone streaming platforms developed by major content originators---the price difference between cable and streaming is already approaching zero depending on your programming preferences/demands.
(This post was last modified: 10-15-2020 10:58 PM by Attackcoog.)
10-15-2020 10:53 PM
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
1. Jim Cramer is a classic look at the past to invest talking head who is wrong more than he is right. His job on CNBC is to move shares which others make money selling off. "Booyah Sucker" ought to be his expression.

If you want to make money in stocks you don't look backwards at trends you look for things that are innovative from companies that have a track record of positive innovations and look around and see what things your friends like and why. What the herd is buying and is about to buy more of is where the money is.

2. Even if Disney wanted to sell off ESPN it wouldn't really benefit anyone else because Disney would likely rewrite all of the rights contracts to benefit themselves. The latest with the SEC is with Disney/ABC. T2 and T3 are with ESPN for now. So this doesn't help FOX or anyone else.

3. If Disney wanted to convert ESPN to all streaming (which is the more likely option as cable advances toward its end) think of the overhead Disney could cut simply by using the schools radio announcers as play by play for the streaming since the schools already pay them the payout would be minimal. What is the main expense at ESPN? Talking heads who bloviate about everything but the damned game and that's if they actually remember the name of the team in front of them. What is ESPN's highest negative? Their talking heads! Would you be happier with your school's play by play and color guy calling the games you streamed? I'd bet 90% or more would be.

So as we move inevitably toward a streaming world why should any of the conferences be concerned? As long as we get to split a fat T1 and T2 contract and all of our games are T1 and T2 who cares how it is delivered? And good riddance to conference networks. You pay through the nose for each one to get their worst games.

4. So I don't think Disney will be dropping rights or killing off or selling ESPN. I believe they will simply convert ESPN to streaming and sell off unessential production facilities and cut personnel (talking heads).

5 Remember to look at NBC spinoffs likely biases in all of this as well. CNBC has long held bad rumors toward ESPN.

6. I had a thread around here last year detailing how much the conferences could make if they kept their own rights and produced their own product and streamed their own games. They should all look at pooling that and bundling that and bypassing Disney.
(This post was last modified: 10-16-2020 12:01 AM by JRsec.)
10-15-2020 11:55 PM
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
The problem with ESPN is that is losing subscribers at a time when rights fees continue to increase. Between MLB, NFL, NBA and NCAA, they rely on Disney to make up the contractual differences. And Disney sees a problem with that.
10-16-2020 12:05 AM
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RE: JIM CRAMER THINKS ‘GETTING RID OF ESPN’ IS DISNEY’S PLAN
(10-15-2020 11:55 PM)JRsec Wrote:  1. Jim Cramer is a classic look at the past to invest talking head who is wrong more than he is right. His job on CNBC is to move shares which others make money selling off. "Booyah Sucker" ought to be his expression.

If you want to make money in stocks you don't look backwards at trends you look for things that are innovative from companies that have a track record of positive innovations and look around and see what things your friends like and why. What the herd is buying and is about to buy more of is where the money is.

2. Even if Disney wanted to sell off ESPN it wouldn't really benefit anyone else because Disney would likely rewrite all of the rights contracts to benefit themselves. The latest with the SEC is with Disney/ABC. T2 and T3 are with ESPN for now. So this doesn't help FOX or anyone else.

3. If Disney wanted to convert ESPN to all streaming (which is the more likely option as cable advances toward its end) think of the overhead Disney could cut simply by using the schools radio announcers as play by play for the streaming since the schools already pay them the payout would be minimal. What is the main expense at ESPN? Talking heads who bloviate about everything but the damned game and that's if they actually remember the name of the team in front of them. What is ESPN's highest negative? Their talking heads! Would you be happier with your school's play by play and color guy calling the games you streamed? I'd bet 90% or more would be.

So as we move inevitably toward a streaming world why should any of the conferences be concerned? As long as we get to split a fat T1 and T2 contract and all of our games are T1 and T2 who cares how it is delivered? And good riddance to conference networks. You pay through the nose for each one to get their worst games.

4. So I don't think Disney will be dropping rights or killing off or selling ESPN. I believe they will simply convert ESPN to streaming and sell off unessential production facilities and cut personnel (talking heads).

5 Remember to look at NBC spinoffs likely biases in all of this as well. CNBC has long held bad rumors toward ESPN.

6. I had a thread around here last year detailing how much the conferences could make if they kept their own rights and produced their own product and streamed their own games. They should all look at pooling that and bundling that and bypassing Disney.

Hence, the reason ESPN has a complicated relationship with Notre Dame. It has improved slightly since the ACC deal but we still are viewed as an outsider.
10-16-2020 12:07 AM
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