Feb. 3, 2003 – Confirmation of the continued growth and
development of the Indy Racing League, a focus on keeping a
level playing field for all competitors and an update
regarding the business aspects of the League were highlights
of the State of the Series Address, given Feb. 3 by IRL
President and CEO Tony George, Senior Vice President of Racing
Operations Brian Barnhart and Senior Vice President of
Business Affairs Ken Ungar.
George opened the speech, delivered on the opening day of the annual Test in the West at California Speedway, with a short retrospective on the recent developments within the IRL. Among the highlights:
·The April 2001 announcement by Toyota to commit to the IRL for the 2003 season.
·The June 2001 confirmation by General Motors that Chevrolet would return to the Indianapolis 500 through participation in the Indy Racing League.
·The August 2001 announcement regarding the formation of the IRL Infiniti Pro Series.
·The September 2001 expansion of the IRL’s partnership with ABC Sports and ESPN.
·The October 2001 extension by Firestone of its relationship with the League.
·The May 2002 announcement that SAFER Barrier technology would be in place at the Indianapolis Motor Speedway for the 86th Indianapolis 500.
·The May 2002 announcement of Honda Motor Company’s plans to enter IRL competition in 2003 and that the IRL and Twin Ring Motegi entered into an agreement for the league to conduct its first race outside of the United States.
Other key points highlighted by George were details of the new IRL Leaders Circle Program and guidelines emphasizing improved driver safety and quality car construction, as well as the announcement in January 2003 that the League’s premier series would be known as the IndyCar Series.
“All of these events would no be possible if it were not for our drivers and teams offering some of the finest competition in all of sports,” George said. “And for the 2003 season, joining our already established field is a number of drivers and/or teams that are making a transition to our brand of racing.
“It is with a great deal of pride that I can state that never before in the history of American racing have we had an open-wheel, oval series with the celebrated drivers, the established owners, the significant committed players from the auto industry and all the groundwork which I have laid out that the IndyCar Series will have in 2003.”
Looking back on previous seasons, George reflected on the competitiveness of the series.
“When the league had its first race in January 1996,” George said, “it was the realization of a vision to create a series where competition is close, costs are controlled, the same quality of equipment is available to all, and teams and sponsors can afford to compete.
“Eight years later, we are realizing that vision.”
Barnhart focused on the IRL’s Racing Operations division and its continued efforts to further the IRL’s initial objective of maintaining cost control and a level playing field while also continuing to offer the most competitive racing series in the world today.
“We continue to have the ability to maintain cost controls because the manufacturers have bought into our business formula and participate under the terms of the league,” Barnhart said. “Our agreement with the engine manufacturers in 2003 is nearly identical to our very first agreement with GM and Nissan when the league was formed. We have not, and will not, change this formula to attract manufacturers.”
Barnhart also stated his belief that the formula is working so effectively that other forms of racing are implementing similar plans.
“Our SAFER Barrier, a system to reduce the force of impact in wall contacts, has been recognized by several engineering and safety organizations. Said Barnhart. “ We are pleased that other tracks are looking seriously at the SAFER Barrier to see if it meets their needs.”
Ungar outlined the IRL’s efforts to further its business growth.
“For the first time in our history, we have senior level executives and support staff in marketing, licensing, sales, promoter relations and public relations who are totally focused on our league,” Ungar said.
Ungar cited various trends, including the longstanding television ratings success of the Indianapolis 500, the upward trend of the IRL’s television ratings over the past two seasons and the platform to televise IRL broadcasts globally via ESPN International.
“2003 will be a showcase for many of our partners, new and existing alike,” Ungar said. “Toyota, Honda and GM plan aggressive marketing campaigns featuring the IndyCar Series. Firestone will also continue its strong support of the IndyCar Series.
Ungar also stressed the League’s five business goals:
·Improve television ratings.
·Improve the League image.
·Cultivate driver development.
·Increase engine manufacturer participation in the League.
“Our series is undergoing a renaissance,” Ungar said. “With the drivers and teams, tracks, broadcast relationships and sponsor support, there is no reason to believe that the sky is the limit.”
INDY RACING LEAGUE TEST IN THE WEST PRESS CONFERENCE
STATE OF THE SERIES, Tony George, Brian Barnhart, Ken Ungar
Feb. 3, 2003
MODERATOR: Good morning, welcome to today's press conference. Let me introduce everyone up here on the podium. Immediately or closest to me is Brian Barnhart, senior vice president, racing operations for the IRL; Ken Ungar, senior vice president, business operations for the Indy Racing League; and the founder and CEO of the Indy Racing League, Tony George.
TONY GEORGE: Good morning, everyone. Welcome to the Indy Racing League's annual Test in the West. We appreciate the hard work that California Speedway has done to put on this event, and I would like to personally thank Bill Miller and his staff.
The Indy Racing League was founded to build an oval racing series around the heritage of the Indianapolis 500 and to offer opportunity to those who want to compete at the highest level of racing in the types of cars that have defined Indy since its beginning.
Today is the unofficial kickoff to our season, and the 2003 schedule is one that all of us at the Indy Racing League are looking anxiously forward to ever since Sam Hornish put an exclamation point on last year's 2003 season with a thrilling last-lap, last-second victory at Texas Motor Speedway. We enter the 2003 season with unprecedented growth, momentum and competition.
A game plan was put into place just two years ago, and with a lot of hard work the results are that we're all here today gathered eagerly awaiting the 2003 season.
Remember, it was just April of 2001 when Toyota made its IRL commitment for the 2003 season. It was June 2001 when GM confirmed that Chevrolet would return to Indy. In August of 2001, we announced the formation of the IRL Infiniti Pro Series. And in September of 2001, we expanded our partnership with ABC Sports and ESPN. In October 2001, Firestone extended its relationship with the League, and laid the foundation for what promised to be an exciting 2002.
Last January, we announced the details of our new IRL Leaders Circle Program. In February of last year we released the guidelines emphasizing improved driver safety and quality car construction and the specifications that were distributed to our chassis manufacturers. Also last February, ESPN International was appointed the exclusive worldwide television representative for the Indy Racing League and the Indianapolis 500. They subsequently delivered what is one of the best international television distribution packages of any American-based racing series.
Last May, the momentum continued with announcements regarding our SAFER technology being installed at the Indianapolis Motor Speedway for the 86th running of the Indianapolis 500.
The Honda Motor Company announced plans to enter the IRL competition in 2003, and the Indy Racing League and Twin Ring Motegi entered into an agreement for the league to conduct its first race outside of the United States.
To top it all off, earlier this year we announced that our premier series of racing would be known as the IndyCar Series.
All of these events would not be possible if it were not for our drivers and teams offering some of the finest competition in all of sport. These teams have played an integral role in building the IRL and everyone in the IRL appreciates their professionalism.
Joining our already established field is a number of drivers and teams that are making the transition to our brand of racing. So it is with a great deal of pride that I can state that never before in the history of American racing have we had an open-wheel oval series with celebrated drivers, established teams, significant committed players from the auto industry, and all of the groundwork which I have just laid out, that the IndyCar Series season will have in 2003.
When the League had its first race in January 1996, it was a realization of a vision to create a series where competition is close, costs are controlled, and the same quality of equipment is available to all where the teams and sponsors can afford to compete. Eight years later, we are realizing that vision.
In 2002, the Indy Racing League recorded the closest finish recorded in major racing history. We had nine different winners in 15 races, including six first-time winners. Sarah Fisher became the first woman to capture a pole position in the history of major league racing at Kentucky Speedway.
Ken and Brian were given day-to-day responsibility for our racing operations and business affairs, and last year they worked tirelessly on behalf of the League. I owe each of them a debt of gratitude for their leadership and would ask that they each update you on their respective areas of competition and business affairs. With that, I'll turn it over to Brian.
BRIAN BARNHART: Thank you, Tony. Day in and day out, the IRL racing operations division strives to continue the IRL's initial objective of maintaining cost controls and a level playing field while offering one of the most - if not the most – competitive racing series in the world today.
To give you an idea of how even more competitive the IndyCar Series will be this year, let's take a look at some of the drivers that will be participating this week at our open test at California Speedway and at Phoenix. Fifteen of the drivers in attendance have won an IRL or CART race. In total, the drivers have combined for 147 race victories, seven Indianapolis 500 championships, and 10 combined championship titles.
Again, looking at the field of competitors in attendance this week, we feel that we offer a diverse field of competitors with over half of the drivers competing being born in the United States.
All of our drivers live in the United States and, just like the country itself, the drivers represent many cultures and many walks of life. Since its beginning, the Indianapolis 500 has very much been an international event, and the IndyCar Series mirrors that with the diversity of its drivers.
It is important to note with the addition of Honda and Toyota joining Chevrolet, our competition will increase even more, and each of these companies has made significant marketing commitments to promote our sport, our teams and its drivers.
We continue to have the ability to maintain cost controls because the manufacturers understand and acknowledge that our business formula works, and they have chosen to participate under the terms set by the League.
Our agreement with the engine manufacturers in 2003 is nearly identical to our very first agreement with GM and Nissan when the League was first formed. We have not, and we will not, change this formula or our original philosophies and principles in an effort to attract additional manufacturers.
Like 1997 and 2000, this season marks the first year of a three-year program with engine and chassis manufacturers that enables an owner to amortize his cost over three years and further demonstrates our commitment to controlling costs for our participants.
Our formula is working so effectively that other forms of racing have caught on and implemented similar plans, recognizing the importance of controlling costs.
The Indy Racing League continues to be a leader in safety innovation, our SAFER Barrier, a system to reduce the force of impact in wall contacts, has been recognized by several engineering and safety organizations. The SAFER Barrier remains in place today and stayed in place not only for the Indianapolis 500 in May, but the Brickyard 400 in August, and the United States Grand Prix in September, as well. We are pleased that other tracks are looking seriously at the SAFER Barrier to see if it meets their needs.
Our new cars provided by Dallara, Panoz G Force, and Falcon Cars contain advances in driver protection, underscoring a continuing effort and commitment by the League to reduce driver risk.
In 2003, we have an improved gearbox designed and developed by XTRAC and the chassis tubs themselves feature a side anti-intrusion material two-and-a-half times stronger than last year's model.
As the Indy Racing League Infiniti Pro Series begins its second season, we're excited about another great season of growth and thrilling competition. As the League's official development series, the Infiniti Pro Series serves as an essential training ground and stepping stone for drivers, teams and sponsors en route to the pinnacle of open-wheel oval-track racing in America: the IRL IndyCar Series.
In 2003, the Infiniti Pro Series will expand to 11 races, with a 12th date tentatively scheduled to be added. There are a host of new drivers and teams coming to the Infiniti Pro Series in 2003, joining an ultra-competitive field of future IndyCar Series stars.
The inaugural Infiniti Pro Series champion, A.J. Foyt IV, will graduate to the IndyCar Series in 2003, confirming that the Infiniti Pro Series is the ideal training ground for the IRL's premier open-wheel series.
It is my pleasure and honor to announce today that four-time Indianapolis 500 winner Rick Mears has been hired by the Indy Racing League as a driver, coach and consultant for the Infiniti Pro Series. So please join me in welcoming Rick to his new role. (Applause.)
We appreciate your contributions, Rick, and look forward to a great season. Thank you very much.
Thank everyone for your time. Now it's my pleasure to introduce the senior vice president of business affairs for the Indy Racing League, Ken Ungar.
KEN UNGAR: Thanks, Brian.
On the business side of our sport, we have for the first time in our history senior level executives and support staff in marketing, licensing, sales, promoter relations and public relations who are totally focused on the League. It's now a sport demanding 110 percent of our focus and energies.
For the first time in anyone's memory, our sport has attracted enthusiastic Fortune 500 global partners, the likes of General Motors, Toyota, Honda, the Walt Disney Company, ABC, ESPN, Firestone, Phillip Morris, Bombardier and Delphi.
To understand the potential impact that these partners will have on our sport, it's important to note that these companies alone represent nearly $500 billion in annual revenues, and they're partners with deep roots with us. For instance, ABC Sports' coverage of the Indianapolis 500 dates back to 1965 – the longest broadcast sports relationship in history – together with ESPN offers comprehensive coverage of the Indy Racing League IndyCar Series and the greatest spectacle in racing, the Indianapolis 500 race.
The League's broadcast relationship with ABC/ESPN is solidified through 2007. With the help of our friends and partners at ABC/ESPN, we are proud of our network division ratings and the improvements we've seen. The Indianapolis 500 has long been a rating success on the Memorial Day weekend each year, averaging a 6.2 rating in the last decade. The League's ratings for the remainder of its schedule continue to climb. The 2002 season showed a 17-percent increase on ABC and a 31-percent increase on ESPN compared to 2001.
Heading into the 2003 campaign, partners ABC/ESPN have committed even more hours of coverage, and more promotion across all of its platforms. The actual race broadcast will offer even more technology for fans.
Indy Racing League broadcasts are made available globally via ESPN International to more than 300 million homes in 198 countries. As our broadcasts are seen worldwide, 2003 will be a showcase for many of our partners new and existing alike. Toyota, Honda and GM plan aggressive marketing campaigns featuring the IndyCar Series. Firestone will continue its strong support of the IndyCar Series, including market expansion of its successful Firestone Firehawk Indy 500 consumer tire.
Having strong committed partners would not benefit the sport without the foundation of a business plan to guide us to success. Just as Tony's vision has been consistent and reliable, our business plan has also been solid. Everyone who works for the League knows our five business goals:
To increase attendance;
To improve the television ratings;
To improve our League image;
To cultivate driver development;
And to increase engine manufacturer participation in our sport.
You will note that in today's remarks by Tony, Brian and me, we touch on every one of these five goals. However, none is more important than the goal of increasing attendance at our races. Working closely with our Indy Racing League family of racetracks has been a key part of the League's success to date. Our marketing, sales and public relations teams coordinate each aspect of our business plans with each of our promoter partners to gain maximum impact. As the League has grown, we have enhanced sales, marketing and public relations efforts and promise they will be as aggressive as ever.
Because of the hard work of our promoter partners and the League staff, attendance grew by 9 percent from 2001 to 2002, with some of our tracks experiencing significant growth, yet we understand we have far to go before we realize the tremendous potential of the IndyCar Series. That is why in 2003 you'll see more resources to increase attendance through grassroots marketing initiatives like our Indy Racing League Fan Experience. The Fan Experience is five attractions traveling the U.S. as a road show for 36 weeks, marketing our brand to American sports fans in every market we compete. This interactive fan racing program will introduce the entire family to the excitement of Indy Racing, help spark a big-event atmosphere at all of our tracks, help make our drivers stars and, most importantly, sell tickets to race events.
For the first time in League history, we have a dedicated sales team, which will cover the entire country, attracting partners that will activate their involvement with the League. The success of sports leagues relies as much on sponsor activation to spread the word as any other form of marketing, promotion or PR.
The sales team will also be rolling out Indy Racing League connections, a new business-to-business development effort to bring League and team sponsors together to share ideas and help them develop new working relationships together.
Our public relations team has been expanded from five to seven professionals, and two primary goals identified are to enhance coverage of our drivers within the sports pages across the country, and we've identified non-traditional media like lifestyle, business and entertainment outlets to tell our story.
Our series is undergoing a renaissance. With the drivers and teams, tracks, broadcast relationships, and sponsor support, there is no reason to believe that the sky is the limit.
On behalf of Tony, Brian and myself, I would again like to thank you for joining us today.
MODERATOR: Thank you, Ken.
At this point we'd like to open up for some questions.
Q. Tony, you talked about having all your ducks in a row now. You have Toyota, you have manufacturers, you have television packages, you have a 16-race schedule, including international races. Can you talk about the pressure now that you face to get your message to the people, how attendance must increase, how ratings must increase here in the next year to two years?
GEORGE: Well, it's pressure that I think is self-imposed. I think we've continued to show steady growth and focus on that outcome. But this year we've stepped it up, as Ken mentioned, on just about every front.
I think certainly there's been a lot of attention focused on the League this year. It's incumbent upon us to respond with the appropriate level of professionalism, which we've spent the better part of two years, the start of our second year, really trying to set up an organizational structure that is properly staffed to meet those needs.
As Ken so aptly put it, it's going to take working with all of our partners and all the constituents to achieve that.
Q. Brian, could you speak to car counts both for the IndyCar Series and for the Pro Series as you see it now and also to the Indy 500?
BARNHART: I certainly think, especially with regards to the Indianapolis 500, we're going to be looking at a combination of car drivers in the low- to mid-40s participating, and shooting for the 33 spots, which is fairly consistent with numbers we've seen the last several years.
With regards to the IndyCar Series and the Infiniti Pro Series, probably the IndyCar Series isn't going to achieve what we hoped, and probably we're looking at in October, which I don't think is really something unusual. This is the first year of our chassis and engine combination, the first of a three-year run, where I mentioned entrants are able to amortize the cost. As that involves a significant capitol investment and outflow in the first year, especially where we were last September and October with the existing teams and the ones that expressed interest and participating in the League, in coming to the League, we were really looking at 28 to 30.
With various factors involved, I don't think we're going to achieve that number, which is again consistent with what I think happened in '97 and 2000, but also consistent with what happened in the second and third years of those programs. As the equipment becomes more available and is also cheaper in the years two and three of the program, I think the car number will go up.
I don't think we'll vary a whole lot on the IndyCar Series. I think we'll probably have 24, 25 cars, which is pretty consistent with what we had last year.
The Infiniti Pro Series, Roger Bailey has done a great job and is attracting more attention. It is a viable option for any entrant who hasn't been able to acquire the funding to run on the IndyCar Series level. It's a great training ground, as we talked about. I think right now Roger is indicating he should have between 22 and 24 competitors in the Infiniti Pro Series.
Q. In previous press conferences at this time of the year you talked about the next year's schedule. Anything you can update us about 2004?
UNGAR: I didn't know we were talking about next year's schedule this soon. The hallmarks of the Indy Racing League are growth, growth and growth. The 2004 schedule will in a way be a great challenge for us because we've always been very careful to manage our growth. We've done what we feel is in the best interest of the series, the competitors, teams, our promoter partners, our sponsors. It's always a complicated formula in terms of how we grow our schedule. We've been fortunate to be able to grow our schedule since 1996.
2004 will be yet another challenge, as the series gets stronger, finding the right combination of races in terms of number, in terms of geography. We'll be looking very closely at our history, looking closely at our performance this year, and looking for opportunities for all those partners that I mentioned before, what makes the best schedule.
That process has begun, obviously, and later this summer we'll be talking more about it.
Q. I caught the words like "renaissance" and "growth," but how are you addressing the real issue of getting open-wheel racing onto the radar screen? In reality, it's NASCAR that's dominating. Have you got a grand plan to increase visibility to where it used to be?
GEORGE: Well, we continue to evaluate our business plan for the next three to five years. We feel like we've made significant progress in growing the Indy Racing League. I think it's good for all motorsports when we can show positive signs, especially in challenging times, of growth.
I don't think we sit down in daily or weekly meetings discussing how we can wrestle attention away from others. I think we try to focus on ways that we can bring attention to our series, and we've done that in a very – I think – diligent way.
We've continually worked at bringing new sponsors and manufacturers and teams and drivers into our series, tried to present an opportunity that allows them to compete at the highest form of open-wheel racing in the United States. I think we'll continue to try to do that, just focus on building the Indy Racing League and just let the rest of it hopefully take care of itself.
Q. You were here last year real early in the year with a late schedule, now you're going to September. Is the September date more optimal for the series than being here early in the year?
UNGAR: We think that September poses a great opportunity for us. In terms of looking at our overall schedule, where the best place is for this race, we agreed with Bill Miller and his staff that we'd like to build and create some date equity in the September date.
If you remember, last year's event came together with only three
months' notice. We've had a real chance to dig in with the track staff, create an integrated marketing/public relations promotional plan to really get the word out in the Southern California market about this event.
We think that adding tools in everyone's tool belt like the Indy Racing League Fan Experience, where we can take grassroots marketing initiatives here in Southern California, leave them in market, really spread the word among fans about how great our brand of racing is, we'll really have a leg up.
Also the interesting thing about this year for us will be as we have just, off the top of my head, three significant partners of the League, either team sponsors or League sponsors who were not with us last year, in Toyota, Honda and Pioneer, for example, who have U.S. bases of operations here in Southern California. They're committed also to helping us get the word out and seeing that this event is very successful.
We love racing here. You saw the race last year. There could not be a better racing product to take anywhere. So we think we have a phenomenal on-track product to show fans here. Now the question is, we've demonstrated that the product is great; getting the word out is the next step. We're confident with Bill Miller and his staff, we'll be successful.
Q. How important is it to have the great names like Rick Mears, Andretti, Foyt, Unser to have higher profiles?
BARNHART: I think it's very important from every aspect you can think about. As I mentioned, we're very honored to have Rick join our staff this year and have him dedicated solely to the Infiniti Pro Series. There's a number of reasons for that. I mean, Rick, I believe he retired from racing in '92, is the most current of our driver coaches. These guys in the Infiniti Pro Series can relate to him. As they were growing up, Rick was their hero when they were racing. That applies to Sam Hornish. I know Sam, obviously in the IndyCar Series, his hero in racing was Rick. These guys, as they are stepping in the Infiniti Pro Series, can now talk to and relate to somebody that they watched race.
We also have the luxury, obviously, of having another four-time winner with Al Unser Sr. And three-time winner with Johnny Rutherford that will help the Infiniti Pro Series and IndyCar (Series) drivers when they need it. When you look at that level of experience and knowledge that we have mentoring people in our series, it doesn't get any better than that.
Then on the competition side itself, I mean, Friday evening we attended the function at the Indianapolis Motor Speedway when Andretti Green unveiled their cars participating in the series. What a wonderful occasion. There were four magnificently prepared, fully sponsored, beautiful race cars. When you have the names likes Andretti and Franchitti and Kanaan joining your series, those are names people recognize, they're icons of the sport. It continues to raise the credibility and competition level of what we've been doing.
What we've been able to do on track has been outstanding the last two or three years. As I mentioned, it's just going to get better. You have Fernandez Racing bringing a car, you have Kenny Brack rejoining the series with Bobby Rahal, the '86 Indy 500 winner, you have Mo Nunn, Chip Ganassi running another car. Those aren't cars that are just going to run; those are cars that are going to compete to win. You're going to literally look at a situation when we open the race season at Homestead, 20 of the cars on the grid can win that race that day, and it wouldn't surprise anybody.
From aspects of learning and teaching the people involved, we have the great coaches in place to do it, we have the most recognizable names, teams and drivers in the sport, as well. That's how we're going to raise the awareness of what we do. Once people get to the racetrack and watch our product on the track, that will sell itself, as well.
Q. Where are we with a European race? Then road courses, you have so many drivers and teams now who have road course expertise, it seems a waste of that skill not to at least showcase it somewhere along the line.
GEORGE: We currently don't have any dialogue with any European venues. I don't really have much to report there.
With regard to road racing, I think it's something we'll look at and evaluate as opportunities may present themselves. A lot of people ask me specifically about venues that as I know them today are part of another schedule, traditional dates, whatever. I tend to not encourage dialogue where it doesn't seem appropriate.
I have been approached about some potentially new opportunities that aren't developed fully enough to consider them a near-term prospect. We'll continue to evaluate it and maybe in the three- to five-year business planning cycle, we'll start looking at that more closely, again, as opportunities present themselves.
Having said that, wearing a different hat at the Indianapolis Motor Speedway, we have a pretty significant interest in Formula One, looking at trying to develop road racing, particularly interest in Formula One, in the immediate future. I'm always thinking about that, looking at ways that we can help build on the existing base of Formula One fan interest.
The Indy Racing League has predominantly been an oval racing series. I expect that will be the case for the next few years.
Q. Last year when we sat here, I believe that Brian said there was absolutely no interest in road racing. I think you said it was strictly oval. Has it changed any? It sounds like maybe you're considering it. Has it changed?
UNGAR: I think the business model changes. I think you also as a responsible organization need to be able to respond and react to the business world as situations present themselves.
I think just what Tony said, the Indy Racing League is an all-oval series and is going to stay that way at least in the immediate future. As business models and business opportunities present themselves, a responsible organization will take a look at them.
Q. What do you expect to have at the Indy Japan 300 in April? This is the first time to have an Indy car race abroad, right?
UNGAR: We're very excited about the Indy Japan 300 race coming up. We've done a lot of great preparation with our partner, the Twin Ring Motegi, to prepare for this race -- everything from preparations for an Indy week of promotions where drivers and League officials will be engaged in various promotional activities throughout Japan to help bring attention to the Indy Racing League IndyCar Series, to actually preparing for the race itself.
We're very confident that, because the Twin Ring Motegi is one of the finest racetracks, one of the finest ovals in the world, we're very confident with our cars and the competition that we have, it will be an excellent and very exciting race for Japanese race fans.
MODERATOR: I think at this point we can break up. Brian, Ken and Tony can be available for some one-on-one questions. Thank you.
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