Funding British sport…

The future of the British GP is under discussion at the moment. When I’m not writing, travelling, charity fund-raising and having a real life, I write a weekly newsletter called JSBM. This stands for Joe Saward’s Business of Motorsport, and it covers not only Formula 1, NASCAR, IndyCar, the FIA World Endurance, Rally and Touring Car Championships, DTM, V8 Supercars, WRX, rally-raids and whatever automotive innovation and the industry impact on the sport. It is designed for busy motorsport executives, who don’t have time to trawl the Internet to find out what they need to know what is going on with the business, finance and politics of global motorsport. It is read by chairmen, CEOs and serious race fans, with in-depth analysis of what is happening, new ideas to consider and innovative thinking in the industry. For more information you can click here.

In this week’s edition, I wrote an article about the UK funding of sport and the plight of the British Grand Prix. I thought I would share it with you, as it makes interesting reading.

Incorrect reporting in recent days led to Silverstone last week having to deny that it had cancelled the British Grand Prix contract and the British Racing Drivers’ Club remains keen to find a solution to fund the race, either by convincing the Formula One group, under its new ownership, to lower the fees, or to hope that the change of ownership will lead to the government being willing to invest in the race, as it has with other events, such as the Tour de France, the Rugby World Cup and, of course, the Olympic Games.

Funding for different sports for the Olympic Games has been quite astonishing with UK Sport’s National Lottery-funded World Class Performance Programme pouring huge sums of money into a range of sports in the hope that British competitors will win medals. British athletics has received around $40 million for each of the last three Olympic Games, which is $10 million a year. There have been significant amounts going into other sports as well.

The latest official figures show that the Rio Games in 2016 saw UK Sport funding amounting to $405 million, with the biggest recipients being rowing ($47 million), cycling ($44 million), sailing ($37 million), swimming and canoeing (each $29 million), equestrianism ($26 million) and boxing ($19 million). A further $106 million has been spent on the Paralympics while the last Winter Olympics in Sochi soaked up $19 million).

Government aid for motor sports have been very limited although the government has agreed to provide the Wales Rally GB with a rumoured $6 million over the next three years.

The only conclusion one can reach is that the government does not wish to be associated with Formula 1, despite the fact that the motorsport industry is reckoned to be generating as much as $12 billion a year for the country – not to mention tens of thousands of jobs.

Assisting the British GP to remain on the F1 calendar would cost little compared to some of these other spending.

50 thoughts on “Funding British sport…

  1. I’m sure the problem with UK government funding of the British GP is that the fees go directly to people who are in it for the money rather than the sport. The government has in the past contributed funds to update the infrastructure around Silverstone, and I guess that is much more politically palatable than funding a commercial rights holder’s extravagant demands.

    It’s hard to see that changing even with Brexit and a new boss in town.

    1. Quite; but lets not confuse the issues: its less to do with government funding / subsidy issues in the host countries than the broken business model of FOM.

  2. Trouble is that F1 generated [and presumably will continue to generate] so much money for its owners, the Government would find it hard to justify to the taxpayer any funding it put in. Maybe that will change with the new ownership, but I doubt it.
    That is not the case with the other events the Government is currently funding.

  3. The two are completely different. F1 generates huge sums of money and a succession of people take a cut of varying proportion. British rowing and the other sporting bodies uses the money purely to create a system through
    which medals can be won. It sets up the infrastructure to enable this. On top of that the vast majority of the money comes from the Lottery. Hence always hearing the athletes mentioning it. If F1 wants to apply for lottery funding I’m sure they can. However like many other applicants they may not be successful. Part of being successful in a bid for lottery funding is showing that you have a good business model on which to base your sport (this is why some sports lose there funding, not because they might not win but because Sport England do not think they have a proper plan in place.) F1 and the way it spreads it’s money around may well fall foul of these criteria.

    1. The two are completely different? The idealism of amateur UK Olympic sport disappeared years ago. Lottery funds pay for UK soft power by funding the most likely medal winners.

      Top UK Olympians aren’t in the same wealth bracket as established GP drivers — but I suspect that they outrank young indebted British drivers who didn’t make it to F1.

    2. It is incorrect to say that most funding is from the lottery. It varies from sport to sport but it you were to say that the split between lottery and treasury funding overall is about 50/50 i think that would be not too far out. I looked into sport funding when the olymics were on last.

        1. I got my info from the spreadsheets on the UK Sport web site last summer. A substantial abount of funding was from treasury as I recalled but if I’m wrong I apologise.

        2. I have just noticed that I saved one of the Sport UK spreadsheets last summer. I have copied the grant payments to sport for just ONE MONTH, March 2014 though the spreadsheet covers every month back to 2009. There are substantial amounts from Govenment.

          The five columns do not show very well in free text but the last column shows whether the grant was from Lottery or Exchequer. Some of the money is paid to English Institute of Sport Company which seems to be a sort of QUANGO providing ‘services’ to sports. From memory they are also paying salaries to their staff from their monthly allowance.

          £14,376.00 11/03/2014 Royal Yachting Association Sailing – Paralympic Lottery
          £9,465.00 11/03/2014 Sport Taekwondo Limited Taekwondo Lottery
          £658.00 11/03/2014 sportscotland Exchequer
          £27,141.00 11/03/2014 sportscotland Lottery
          £2,609.00 11/03/2014 sportscotland Lottery
          £7,217.00 11/03/2014 sportscotland Exchequer
          £41,759.00 11/03/2014 National Ice Skating Association Speed Skating Lottery
          £5,317.00 11/03/2014 British Bob Skeleton Association Skeleton Lottery
          £3,682.00 11/03/2014 British Bob Skeleton Association Skeleton Exchequer
          £5,317.00 11/03/2014 National Ice Skating Association Speed Skating Lottery
          £193.00 11/03/2014 Disability Snowsport UK Paralympic Skiing Exchequer
          £89,651.00 11/03/2014 British Bob Skeleton Association Skeleton Lottery
          £1,081.00 11/03/2014 National Ice Skating Association Figure Skating Exchequer
          £2,919.00 11/03/2014 National Ice Skating Association Figure Skating Lottery
          £14,266.00 11/03/2014 World Class Lifting (Paralympic) Powerlifting Lottery
          £28,334.00 11/03/2014 British Paralympic Performance Services Ltd Lottery
          £28,985.00 11/03/2014 Great Britain Wheelchair Rugby Wheelchair Rugby Lottery
          £114,520.00 11/03/2014 British Amateur Boxing Association Ltd Boxing Lottery
          £42,340.00 11/03/2014 Disabled Target Shooting of Great Britain Paralympic Shooting Lottery
          £28,224.00 11/03/2014 The Tennis Foundation Disability Tennis Lottery
          £49,454.00 11/03/2014 British Performance Basketball Ltd Basketball Lottery
          £16,000.00 11/03/2014 British Disabled Fencing Association Disability Fencing Lottery
          £24,976.00 11/03/2014 British Shooting Target Shooting Lottery
          £49,000.00 11/03/2014 British Ski and Snowboard Limited – Slopestyle Snowboard and Ski Lottery
          £9,829.00 11/03/2014 Great Britain Wheelchair Basketball Association Wheelchair Basketball Lottery
          £40,335.00 11/03/2014 Great Britain Boccia Boccia Lottery
          £99,476.00 11/03/2014 Badminton England Badminton Lottery
          £37,353.00 11/03/2014 Royal Yachting Association Sailing – Paralympic Lottery
          £113,307.00 11/03/2014 British Judo Association Judo Lottery
          £234,893.00 11/03/2014 British Gymnastics Gymnastics – Men’s Artistic Lottery
          £31,526.00 11/03/2014 British Triathlon Federation Paralympic Triathlon Lottery
          £93,715.00 11/03/2014 British Triathlon Federation Triathlon Lottery
          £34,389.00 11/03/2014 British Equestrian Federation Paralympic Equestrian Lottery
          £32,396.00 11/03/2014 British Table Tennis Association for the Disabled Disability Table Tennis Lottery
          £16,399.00 11/03/2014 British Blind Sport – Goalball Lottery
          £189,528.00 11/03/2014 Royal Yachting Association Sailing Lottery
          £199,419.00 11/03/2014 British Equestrian Federation Equestrian Lottery
          £31,542.00 11/03/2014 British Judo Association Judo – Visually Impaired Lottery
          £256,841.00 11/03/2014 England Hockey Hockey Lottery
          £911,909.00 11/03/2014 English Institute of Sport Company Exchequer
          £28,542.00 11/03/2014 British Canoe Union Paralympic Canoeing Lottery
          £73,125.00 11/03/2014 British Swimming Synchronised Swimming Lottery
          £108,214.00 11/03/2014 British Swimming Diving Lottery
          £73,610.00 11/03/2014 British Swimming Water Polo Lottery
          £109,577.00 11/03/2014 Pentathlon GB Modern Pentathlon Lottery
          £89,889.00 11/03/2014 Sport Taekwondo Limited Taekwondo Lottery
          £34,435.00 11/03/2014 World Class Lifting Weightlifting Lottery
          £51,937.00 11/03/2014 British Swimming Para Swimming Lottery
          £61,901.00 11/03/2014 British Rowing Rowing – Adaptive Lottery
          £21,034.00 11/03/2014 The Great Britain Disability Football Association Disability Football Lottery
          £37,841.00 11/03/2014 Grand National Archery Society Archery – Paralympic Lottery
          £22,043.00 11/03/2014 British Fencing Association Fencing Lottery
          £448,007.00 11/03/2014 Uk Athletics Athletics Exchequer
          £321,089.00 11/03/2014 British Canoe Union Canoeing Exchequer
          £592,746.00 11/03/2014 British Rowing Rowing Exchequer
          £11,412.00 11/03/2014 British Equestrian Federation Paralympic Equestrian Exchequer
          £94,568.00 11/03/2014 Uk Athletics Disability Athletics Exchequer
          £180,738.00 11/03/2014 Royal Yachting Association Sailing Exchequer
          £63,428.00 11/03/2014 British Equestrian Federation Equestrian Exchequer
          £92,889.00 11/03/2014 British Swimming Para Swimming Exchequer
          £41,576.00 11/03/2014 sportscotland Lottery
          £36,199.00 11/03/2014 English Institute of Sport Company Exchequer
          £122,999.00 11/03/2014 English Institute of Sport Company Exchequer
          £26,256.00 11/03/2014 English Institute of Sport Company Exchequer
          £20,000.00 11/03/2014 Sports Aid Exchequer
          £4,860.00 11/03/2014 English Institute of Sport Company Exchequer
          £9,600.00 11/03/2014 English Institute of Sport Company Exchequer
          £13,800.00 11/03/2014 British Paralympic Performance Services Ltd Exchequer
          £5,040.00 11/03/2014 British Paralympic Performance Services Ltd Exchequer
          £4,353.00 11/03/2014 British Equestrian Federation Equestrian Exchequer
          £8,316.00 11/03/2014 National Ice Skating Association Speed Skating Exchequer
          £4,775.00 11/03/2014 British Paralympic Performance Services Ltd Exchequer
          £12,000.00 11/03/2014 British Bobsleigh Ltd Bobsleigh Lottery
          £7,011.00 11/03/2014 Disability Snowsport UK Paralympic Skiing Lottery
          £40,000.00 11/03/2014 sportscotland Exchequer
          £3,750.00 11/03/2014 British Judo Association Judo – Visually Impaired Lottery
          £13,713.00 11/03/2014 British Canoe Union Paralympic Canoeing Exchequer
          £168,812.00 11/03/2014 Royal Yachting Association Sailing Lottery
          £18,348.00 11/03/2014 British Judo Association Judo Lottery
          £14,400.00 11/03/2014 British Triathlon Federation Triathlon Exchequer
          £45,000.00 11/03/2014 English Institute of Sport Company Exchequer
          £25,800.00 11/03/2014 English Institute of Sport Company Exchequer
          £36,928.00 11/03/2014 British Gymnastics Gymnastics – Men’s Artistic Lottery
          £103,942.00 13/03/2014 Sports Coach UK Exchequer
          £1,200.00 17/03/2014 English Institute of Sport Company Lottery
          £60,000.00 18/03/2014 British Canoe Union Canoeing Exchequer
          £55,000.00 18/03/2014 British Shooting Target Shooting Lottery

  4. Is it to do with the fact that they no longer see F1 as a sport but as a wealthy business already with big international corporations involved? I seem to remember that the state in which the Indian GP was held wanted to treat F1 as a moneymaking entertainment and not a sport. Be good to get some comment from the Gov on this but they seem quite busy today.

  5. One issue may be that when a British based team wins – like Mercedes or Red Bull, we hear the German or Austrian national anthem. At the Olympics the British element is clearly represented by the National Anthem and the Union Flag. Having said that there are many good reasons for government support.

  6. With the amount of money involved from the commercial rights holder and the teams involved (despite the fact of a turnover in millions, not all of them are healthy), it is too contentious for the government to become politically involved through direct funding. The argument can be made that other global, elite sporting events do very well without government funding, The Open Golf Tournament, Wimbledon, Grand National, Ascot, Premier League Football, etc. which backs up this point.

    The more politically acceptable route would be to try and gain state investment, from either the government or from Lottery Funding, by promoting the circuit as critical to the development of all forms of motor-sport and the motor-sport industry given its importance to the GDP of the country and innovative industrial development, rather than just helping to finance a single event over a single weekend.

    Of course this would also mean that other circuits could also apply for money for the same reasons. I don’t know where the development of the ‘Circuit of Wales’ is up to in public finance terms but if it can be done there, it can be done elsewhere. The CoW website states that it is worth £45m to the economy, 750,000 visitors per year and 1,650 train places (for what? Anyone know?), this is the kind of presentation that is needed to promote motor-sport in general to the government and/or the lottery, not just for the CoW.

  7. Sir, Your analysis is flawed. F1 in particular and motorsport in general have created their own potentially unsustainable financial circumstances and the solution therefore lies in their own hands. At a time when the UK Government has many other far deserving routes for the expenditure of public monies, the British Grand Prix would be a singularly inappropriate recipient of these scarce funds.

    1. Funds aren’t scarce in the UK – this government is spending money like water and plenty of it around Silverstone. Look at the money they are hosing into a hole in the ground/roundabout in Towcester, a new M1 junction by Toddington and a fast train to up north. Some local contractors are on fifteen-year deals for the HS2 project and money is no object when looking for premises to work from up here – soil testers alone have a massive budget to spend. A splash into the GP coffers to support this longstanding expo of world-leading British engineering wouldn’t even touch the sides of HS2.

  8. Putting government into an event so that global many billion dollar brands like Red Bull, Mercedes, Ferrari and Renault can enter it and a ‘sport’ that is seen as an elite rich business already, best of luck with getting a British cabinet to sign that off. There is no real deliverable legacy with a UK government funding an F1 event whereas with amateur sports that are accessible, minsters can point to more people taking up swimming, running or cycling ‘inspired’ by elite athletes performances. The figures spent on other sports aren’t relevant as they are quantified in other ways, the government is desperate to get people fitter and more active to stave off burdens on the NHS in later life, another thing that F1 can’t deliver.

    1. Exactly, I can join my local rowing club and with a bit of luck and if I’m reasonable I can compete in exactly the same make and class of boat as an Olympic oarsman, on the rowing lake where they held the Olympics and I can even compete against those Olympic athletes at the annual Head of the River race on the Thames along with 3500 other people, all for £460 a year plus entry fees.

    2. Why introduce reality into the discussion here? Let us just go with the flow: yes the tax payer should support F1 !!!!!!!!!

  9. The funding of Olympic sport has to show success and is also aimed at inspiring and getting others in to sport. That doesn’t really work with f1 as no government is going to want to encourage people to go faster in cars in this country.

  10. Sorry, but I don’t believe F1 has any cause to ask for money from the UK public.

    F1 is a business. Everyone involved earns a wage – except the track marshalls, who pay to do their job. An Olympic athlete is lucky to make any money. Laura Kenny, who has 4 Gold medals, earns less than £30k a year. That’s about the same as an average F1 truck driver. And she pays tax on that. The vast majority of athletes are happy to pay to take part in their sport.

    Talking of taxation. How much has CVC or Bernie paid in the last 10 years? Nobody knows, but I doubt if it’s a lot, but they all live in the UK and are happy to make use of facilities that Laura Kenny and I have paid for.

    If F1 is compared to other sports, why not powerboat racing. It employs a lot of people and they don’t ask for a penny from the Lottery.

    F1 finances are a mess because the FIA and the teams allowed them to get into a mess. There have been far too many dodgy geezers involved in F1 for any government to want to get involved. We don’t have a Francois Mitterrand, with debts to repay. (See – Fascinating F1 Facts:31)

    PS – Brookland Museum has received £4.6m in funding from the Lottery.

    1. Jonno, your point stands but your figures are slightly incorrect. The highest an individual Olympic athlete can earn in wages from UK Sport is £26,000, which is tax free. For that they need to rated as a gold medal prospect – there are few but Mrs Kenny would be considered one. However the allowance is also means tested, which means that Mrs Kenny doesn’t receive all of it cos she has other incomes – e.g. an autobiography fee, sponsorship deals with Adidas, DFS, P&G etc.

      Individual sports then get funding to invest in training facilities, which such athletes can use.

      The problem with government funding of the British GP is that the facilities are already fine, and it’s an event rights fee which needs paying, a fee which rather unpalatably goes directly to a stock listed company. It’s this which is the important political distinction between F1 and the other events mentioned – The Olympics doesn’t have such a fee, and neither technically does the World Cup. Of course both do in roundabout ways given the tax waivers each organising body demand on the event earnings but the distinction is that it’s not money which leaves the taxman’s coffers but rather money which never reaches the tax man (and as such isn’t normally reported in the mass media).

      As it is, if motorsport was to receive UK government funding, it’d be for the MSA’s excellent Young Driver / co-driver Academy which trains the next generation.

      So if Liberty wants to chase the political cash, it has to become smarter than Bernie’s cash up front policy. Waive rights fees, and hire the circuit from the owner itself (which the BRDC would likely do for the continued prestige of holding the British GP), and instead keep the revenues created by the event but in order to maintain the GP, insist that the government waives taxes on them.

      It would not surprise me if they go this route given Mr Bratches’ previous involvement at ESPN, which did a similar thing with the X Games. Though he also saw his bosses get their fingers burnt doing it…

    2. Laura Kenny has earned a lot more than her min £26K subsistence payment (max £65K). She is a star athlete who has trade sponsors and commercial sponsors.

      I don’t begrudge her income. We just have to remember that top athletes get very well paid in sponsorship and appearance money.

      The only motorsport events where appearance money is paid by organisers are motorcycle road racing and Lord March.

  11. I do not believe that there is a snowballs chance in hell of F1 in the UK being subsidised by the UK taxpayer. The sport is swimming with wealth. If he so chose Lewis could pick up the tab for Silverstone’s recurring losses. Bernie could fund a full season and have plenty of change. Their wealth is due to the generosity of fans.

    Other professional sports Tennis, Football, Rugby, use receipts from the elite games, to subsidise their sport at grass roots level. The reverse is true with Silverstone and F1, it takes receipts from minor races, track days and the every other big crowd event, to subsidise the Fat Cats of F1. I don’t see Liberty coming in to be some kind of benevolent dictator either. They have bought the show to produce bigger returns for their shareholders, than Bernie could. They just might work harder at it with a little more imagination.

    To suggest that Lottery funding should be redirected away from supporting the UK’s current sporting prowess is also fanciful. £10million a year for rowing may seem a lot. What you may see in the Stewards enclosure at Henley does not reflect what goes on at grass roots level. My brother coached a lanky teenage girl to Junior World Champion level. To achieve this he gave up every day of his holidays and drove her and her boat on the roof of his car around Europe without any financial assistance. She is the current World Champion for her age and is looking for a medal in 2020. She is now fully subsidised by the National Lottery which means she is provided with a boat and sculls, 6,000 calories of food each day which she expends in training and a basic room. Sure there are nutritionists, medical staff as well as coaches all being paid for, but the notion that the subsidy is money for old rope, is just plain wrong. There are men, women’s, lightweight, heavyweight and Paralympic squads all vying for a small piece of this cake and I am sure you will find this is also true, of Cycling, swimming, gymnastics and, yes women’s hockey.

    F1 needs to take a very firm grip of its costs. Start with a budget cap and see just how clever and innovative the teams really can be. Then teams like Manor might be able to survive and even turn a profit on their activities. Reduced fees might even allow Silverstone to attract families and stir up enthusiasm for Motorsport in general and at all levels.

    1. > To achieve this he gave up every day of his holidays and drove her and her boat on the roof of his car around Europe

      I now have visions of the poor girl on the roof, nestled within or, worse, strapped up alongside her boat…

  12. As much as I love F1 I don’t think it really deserves public funding just for staging the race.

    In the Olympic sports most of them don’t earn very much and the funding goes towards helping the athletes. The fees don’t just go directly into the pockets of the IOC as it would if the government decided to fund F1.

    I would however be all for the Government investing in Karting and helping to fund young drivers looking to make it up the motorsport ladder, that would seem far more worthwhile in inspiring the nation than direcly lining the pockets of Liberty Media.

  13. Given that F1 is awash with multi-millionaires, some of them distinctly dodgy, wouldn’t play well with the media if the sport were given any taxpayers’ money.

    Another factor is that any subsidy, in any area of life, puts prices up.

    No, the economic model of F1 has to be reshaped by itself and it will get worse before it gets better.

  14. I am staggered that they managed to spend £46m on rowing! Were they building new rivers or lakes to practice on?
    Or did a lot of it disappear into the the pockets of “Advisors”. “consultants” or even worse “lawyers”
    The traditional government procedure for spending money is to first put someone in charge who has no experience or expertise in the field, has never had a proper job, is gullible, easily led and most important, has no common sense whatsoever. Thus we repeatedly waste a large and unforgivable percentage of our tax revenue in many different areas.

    Olympic competitors were supposed to be amateurs with expenses only being paid. But now they all have huge amounts of sponsorship and the games themselves in London, were taken over by commercial giants, who banned all forms of food and drink except their own sugar loaded overpriced product. Threatened nearby businesses, forced a cafe to change its many year established name. (The owner of the Olympic cafe however merely took the “O” off his sign) The only good thing that came out of that vast obscene expenditure was the BBC series “2012” Which apparently was far nearer the truth than was intended when it was written, months beforehand.
    We shall be paying for the London Olympics for years yet. No doubt some parties got their profits but no one has said “Ok people we have now paid off the olympic bill” (We only finished paying the USA back for the “Lease-Lend” from WW2 a couple of years ago)

    F1 is a shining saint by comparison to the corruption of the IOC, the whole olympic concept is now so degraded it is like what the Americans did to Christmas/Easter/Haloween/Mothers day etc The fact that those attending were doing so only by chance and may have had no interest in the sport they were allocated tickets for was really the final straw in a typical government mis -spending fubar.

    1. Rowing is much more difficult than you can imagine. Whether it is so strenuous to earn a posh house in London, I cannot imagine.

      But if you are a posh rower, it seems that you live in a different world.

  15. When a sport so ostentatiously spends money on items like an iteration of a front wing, ‘motorhomes’ and huge technology centres with the most expensive machinery it is easy to see why a government would think that spending public money in the same arena is a decision that would be hard to justify politically, especially when health and social care are creaking at the seams.

  16. British GP needs cash, OAP seeks employment. put them together = GB GP flush with the readies! No, it would never work, Would it?

  17. F1 is a big business which ought to be self-sustainable. If it is not, that’s its own collective fault. It does not need (or deserve) government funding.

    Most Olympic sports are not businesses. Athletics and rowing only attract really big audiences once every four years. They are not self-sustainable and need (and deserve) government funding.

    That’s the key difference, although there are many others.

    The argument that Britain has the best motorsport industry in the world and therefore it should be supported by the government is a bit like saying that England has the best football league in the world so Manchester United and Chelsea should be supported by the government…

      1. If its a choice between having a Grand Prix or funding 100s (if not 1000s) of athletes in track and field, rowing, badminton, judo, amateur boxing, cycling, swimming, canoeing, diving, fencing, gymnastics, hockey, pentathlon, sailing, taekwondo, table tennis, weight lifting and triathlon, then its a no-brainer.

      2. The point is that it doesn’t have to.

        If the sport is properly run, it can have a British GP, the sport can make money, the circuit can make money, the fans can attend without being ripped off, and the government does not have to intervene. Britain’s world-leading motorsport industry can continue to lead the world. There is more than enough money to go round, when it isn’t all palmed off by the greedy owners.

        With any luck, under Liberty, the above might even happen.

        As we all know, in recent years the only people who have made money from the British GP are CVC. I’m glad the government didn’t give them any more. It would be much better spent on the NHS… not that the current lot would do such a thing, mind you.

  18. Damon Hill spent a lot of time managing the BRDC in order that there would another British GP. How about a hand of applause for Damon?

    We would not be thinking about a British GP otherwise.

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