MLB Settles TV Lawsuit, Preserves Blackouts

Considering the potential ramifications of a victory by the plaintiffs in the Garber v. Office of the Commissioner of Baseball lawsuit, the odds always favored Major League Baseball eventually reaching a settlement in the case. Indeed, considering that the sport’s entire existing broadcast model was under attack – with the lawsuit alleging that MLB violates federal antitrust law by preventing its teams from competing in the local and national broadcast marketplaces – allowing the Garber case to proceed to trial would have been extremely risky for the league.

As a result, it was no great surprise to learn that MLB did in fact reach a tentative settlement agreement with the Garber plaintiffs on Tuesday morning, just minutes before a two-week trial was slated to begin in the lawsuit.

The terms of the deal will not be officially announced until after the attorneys have committed the tentative agreement to writing. Nevertheless, various media reports have revealed a number of details regarding the proposed settlement. In particular, it appears that by agreeing to create new viewing options for fans, and lowering the price for its MLB.TV package, the league has succeeded – at least for the time being – in preserving its oft-criticized blackout policy.

Let’s start with what the settlement reportedly accomplishes. According to a statement issued by the plaintiffs’ attorneys, MLB has agreed to offer single-team packages on MLB.TV for at least the next five years. As we first reported in December, the league had already suggested in court papers that it intended to create a single-team option in 2016. This settlement now makes that official, and locks the league into providing fans with this service through the 2020 season.

In addition, MLB has agreed to price these single-team packages at $84.99 in 2016, compared with the approximately $130 the league charged for the league-wide MLB.TV service last year. At the same time, MLB has also agreed to lower the price of the league-wide package to $109.99 for the upcoming season.

So for fans who have subscribed to MLB.TV in the past, the settlement will provide some significant cost savings in 2016, especially for those who opt to purchase the new, single-team service option.

That having been said, it is not yet clear whether the settlement will include any terms preventing MLB from raising these prices after this year. In a settlement reached by these same plaintiffs’ attorneys last year in an analogous case against the National Hockey League – discussed here – the lawyers similarly required the NHL to create single-team out-of-market packages, and included some restrictions on how much the league could raise the price of those packages in the future.

So while it’s too early to predict the long-term pricing ramifications of the Garber settlement, there may be some protections built into the deal to ensure that MLB maintains the relatively low price of its new single-team packages in the future. Of course, that would not necessarily stop MLB from raising the cost of the league-wide package in 2017 (a possibility that the NHL settlement did not appear to prevent).

It also isn’t immediately clear whether these new purchase and price options will apply only to the MLB.TV internet package, or will also apply to the MLB Extra Innings service offered by cable and satellite providers. While the NHL agreed to offer  single-team packages both over the internet and via cable and satellite television in its settlement, it’s unclear if MLB has agreed to do the same.

In the statement released by the plaintiffs’ attorneys on Tuesday, for instance, only the creation of single-team packages via the MLB.TV streaming service was referenced. Whether the failure to mention MLB Extra Innings was an accidental omission on the lawyers’ part, or an intentional one, remains to be seen.

Along with creating single-team packages and lowering the price of MLB.TV, Tuesday’s settlement announcement also introduced another new service option for fans: “Follow Your Team.” According to the announcement, beginning in July MLB.TV subscribers who purchase this new option for an additional $10 will be able to watch out-of-market broadcasts of games featuring in-market teams, so long as they subscribe to the local club’s regional sports network (RSN).

In other words, a Detroit Tigers fan living in New York City will now be able to watch the Detroit broadcast of a Tigers-Yankees game, so long as the fan also subscribes to the YES Network. While this option won’t help cord-cutters, it will enable cable subscribers to enjoy their favorite out-of-market team’s broadcast even when a game is being broadcast on a local team’s RSN.

Finally, although not mentioned in the plaintiffs’ attorneys’ statement, Eric Fisher of the Sports Business Journal is reporting that the settlement could also pave the way towards allowing subscribers of RSNs owned by Comcast and DirecTV to stream in-market games via MLB.TV. In particular, the settlement agreement will reportedly specify that MLB cannot raise the price of its MLB.TV service until both Comcast and DirecTV reach an in-market streaming deal with MLB for their RSN subscribers.

Should the two cable providers reach such an agreement with the league, it would put their subscribers on equal footing with those of the various Fox-owned RSNs. Back in August, MLB and Fox agreed to allow authenticated subscribers of 15 Fox RSNs to stream their local teams’ games in-market beginning in 2016.

While this agreement once again would not allow cord-cutters to watch their local teams’ games via MLB.TV, it would provide additional viewing options for existing cable subscribers. As a result, the settlement could provide more flexibility to local fans of the Chicago Cubs, Chicago White Sox, Colorado Rockies, Houston Astros, Oakland Athletics, Philadelphia Phillies, Pittsburgh Pirates, San Francisco Giants, and Seattle Mariners – all of which have signed regional television deals with a Comcast- or DirecTV-owned RSN – letting them stream their teams’ games in-market, so long as they subscribe to the applicable Comcast or Root Sports Network.

As a result, Tuesday’s settlement could pave the way for cable-subscribing fans of 25 of the 30 MLB teams to be able to enjoy in-market streaming. This would leave only those teams that own their own RSN – the Baltimore Orioles, Boston Red Sox, New York Mets, and Washington Nationals – along with the Los Angeles Dodgers (who have a local broadcasting agreement with Time Warner), as the only remaining outliers.

Unfortunately, while all of these apparent provisions in the settlement agreement are great for fans who currently subscribe to MLB.TV or a Comcast- or DirecTV-owned RSN, they will do little for fans who are presently unable to watch their favorite team play due to MLB’s blackout rules. Indeed, by all accounts it appears that Tuesday’s deal leaves the league’s existing local broadcast territories in place, meaning that the blackout policy will be unaffected by the settlement.

Consequently, those fans most seriously affected by blackouts – both cord-cutters and cable subscribers who are unable to gain access to their local team’s RSN – will not be helped by the Garber settlement. In this respect, then, Tuesday’s settlement is certainly somewhat underwhelming, as it failed to fundamentally address the most commonly criticized portion of MLB’s existing broadcast policies.

Moving forward, the proposed settlement in the Garber lawsuit won’t be finalized until it is approved by Judge Shira Scheindlin, the presiding judge in the case. As part of that approval process, the court will solicit comments regarding the sufficiency of the settlement from fans. So those dissatisfied with the proposed deal will have an opportunity to weigh in.

Of course, considering that both sides’ attorneys can argue that the tentative agreement provides a number of potentially valuable benefits to fans – along with the fact that there was no guarantee that the plaintiffs would have prevailed had the case gone to trial – it is probably unrealistic to expect Judge Scheindlin to reject the proposed deal.

So if any substantial changes are to be made to MLB’s blackout policy in the foreseeable future, it will likely require someone else to file a new lawsuit against the league, one that is pursued all the way through trial.

At the end of the day, then, the sufficiency of the Garber settlement likely varies depending upon one’s point of view. Those that were hoping the suit would spell the end of blackouts are likely to be disappointed. But for those who were already happy with MLB.TV – or subscribe to a Comcast- or DirecTV-owned RSN – Tuesday’s settlement appears to have delivered some important changes to the league’s existing broadcasting policies, changes that could expand your viewing options and/or save you some money in 2016.

UPDATE: The settlement agreement has now officially been released. Further details are available here.



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Nathaniel Grow is an Associate Professor of Legal Studies at the University of Georgia's Terry College of Business. He is the author of Baseball on Trial: The Origin of Baseball's Antitrust Exemption, as well as a number of sports-related law review articles. You can follow him on Twitter @NathanielGrow. The views expressed are solely those of the author and do not express the views or opinions of the University of Georgia.


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statsnasty
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statsnasty
4 months 9 days ago

Is it too cynical to see this as the plaintiffs’ attorneys taking a deal that’s good for them at the potential expense of a major victory for the fans?

TKDC
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Member
TKDC
4 months 9 days ago

Based on some irrational psuedoaxiom of “PLAINTIFF LAWYERS BAD!”, yes. Yes, it is.

d_i
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Member
d_i
4 months 9 days ago

Completely agree. I feel they just didn’t want to risk losing at trial and not getting paid. This does nothing to address the real issue.

TKDC
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Member
TKDC
4 months 9 days ago

They would risk having the judge throw it out, being sued for malpractice, being disbarred, but sure, it’s possible. People on the Internet have endless imaginations.

d_i
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Member
d_i
4 months 9 days ago

Per his twitter, Keith Law seems to agree with people on the internet’s imaginations. They knew it worked with the NHL so it’s safe to say they were aware of those not being actual risks. You honestly think the original plaintiffs feel vindicated by a $10 discount settlement?

TKDC
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Member
TKDC
4 months 9 days ago

Keith Law is on the Internet. He agrees with his own imagination. I’m not sure when being a baseball writer made you a legal expert. He also offers no explanation and no substance. So in other words, he is continuing the long Internet tradition of talking out of one’s ass.

And the original plaintiffs, or the named plaintiffs, will get thousands of dollars. They’re probably happy. I’m saving $45 this year, and I didn’t lift a finger. Not sure how much going forward. I’m happy, too.

d_i
Member
Member
d_i
4 months 9 days ago

Whereas you’re offering explanation/substance, validating your stance that this is an acceptable settlement?

In Iowa you’re still paying the full price of the package when last year a full 1/3 of the games were unviewable (a good portion of which aren’t even available via the RSN). Forgive me for still seeing this as unfair.

TKDC
Member
Member
TKDC
4 months 9 days ago

First, I never said it was fair. I said there are mechanisms in place that are intended to prevent lawyers from mistreating clients. I named several of those things (thus, backing up my claim). I also answered the question about the named plaintiff. I was speculating, but in almost every case the named plaintiffs get a nice monetary gesture for their trouble.

That was of course playing along with your alternate reality in which the named plaintiffs actually were the impetus for the case. That is virtually never the case with class action suits. The lawyers are. But if in this alternate reality the named plaintiffs expected something else, they probably shouldn’t have signed up with a law firm that brought a nearly identical case against the NHL and got a nearly identical result. I didn’t hear anything about sanctions against the firm in that case (another bit of evidence it is unlikely in this case).

The place I agree with you is that the current situation sucks. That doesn’t necessarily mean it is illegal. If you’re in Iowa, you have access to Taco Johns. Where I live you don’t. I don’t think that’s fair. But it’s not illegal either.

Bluebird in Boulder
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Bluebird in Boulder
4 months 9 days ago

So the single-team package doesn’t circumvent the blackout restrictions (e.g. I’m a Jays fan living in N.H. so I still have to watch MASN to see the Red Sox vs. Jays games if I get the single-team package)? This seems silly.

TKDC
Member
Member
TKDC
4 months 9 days ago

I mean, we all wish this weren’t the case, but the logic is very simple. Teams get a lot of money from RSNs and the RSNs want to get that money back. Giving the RSN exclusivity helps them do that.

Really the only insane thing is that they can’t do a better job of only blacking out in areas where consumers can actually purchase cable and get access to the RSN. In some cases this might help a RSN expand into an area, but there needs to at least be more balance in these decisions.

Bounty
Member
Bounty
4 months 9 days ago

Then why not offer MLB.TV for the 85$ price + the cost of RSN package necessary to watch the games. With MLB then sending on the cost above the 85$ to the RSN as compensation. Or something fair along those lines. Sure it might be a very expensive package in the end, but then someone that really wants to steam can, for sure. Regardless of their TV situation.

ogZayYsj3r7CGsz
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ogZayYsj3r7CGsz
4 months 9 days ago

When it’s time to renegotiate carriage fees, TV providers will balk at the prices these RSN need to charge to pay off their billion dollar contracts with teams. You’re already seeing it happen. The Yankees YES network is in dispute with Comcast, the Dodgers aren’t on all TVs in LA and the Astro’s sports network went into bankruptcy.

If MLB has a legal steaming option for in-market fans, TV providers will simply point fans to that option rather than making everyone pay $5 of their bill each month to the Dodgers. MLB doesn’t want to lose their TV cash cow, so you can see why they don’t want to provide their fans with the ability to stream in-market games.

Westside guy
Member
Member
Westside guy
4 months 8 days ago

That’s not really logic. That’s why the teams feel the way they do, and wish to preserve the current financial model. But it has absolutely no bearing on the law, nor on the fact that fewer and fewer individuals are choosing to subscribe to cable TV *at all* as we move forward.

soddingjunkmail
Member
soddingjunkmail
4 months 9 days ago

I’m guessing they sold “exclusive rights” to broadcast locally to MASN.

If they now start selling directly to you to, I’d imagine MASN would come looking for a refund.

wildcard09
Member
Member
4 months 9 days ago

Semantics, but NESN is the Red Sox network, MASN is the Orioles. Just an FYI.

Bluebird in Boulder
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Bluebird in Boulder
4 months 9 days ago

Apologies. I’m new here and not used either of their services.

Kevin Wilson
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Kevin Wilson
4 months 9 days ago

I believe these two paragraphs cover that, provided you’re willing to pay $10 for the right to view Jays broadcasts vs NESN. Right? I guess that’s worthwhile for a division opponent in your case, not the Tigers-Yankees example they cite, just given the frequency of the opponent being different.

Along with creating single-team packages and lowering the price of MLB.TV, Tuesday’s settlement announcement also introduced another new service option for fans: “Follow Your Team.” According to the announcement, beginning in July MLB.TV subscribers who purchase this new option for an additional $10 will be able to watch out-of-market broadcasts of games featuring in-market teams, so long as they subscribe to the local club’s regional sports network (RSN).

In other words, a Detroit Tigers fan living in New York City will now be able to watch the Detroit broadcast of a Tigers-Yankees game, so long as the fan also subscribes to the YES Network. While this option won’t help cord-cutters, it will enable cable subscribers to enjoy their favorite out-of-market team’s broadcast even when a game is being broadcast on a local team’s RSN.

JimEd14
Member
JimEd14
4 months 8 days ago

I don’t think this is going to help me as a Red Sox fan in NC, who gets 19 Orioles games blacked out even though I cannot get Baltimore’s RSN on cable. I do subscribe to cable and the local RSN, but I still don’t think this will help me. I bet when I call, they won’t know either and I’ll have to spend hours on the phone.

There has to be some price that will let people watch every damn game they pay for.

stuck in a slump
Member
stuck in a slump
4 months 9 days ago

I’m not exactly sure why MLB can’t keep it’s local blackout policy, but include an option to buy your local team’s broadcast for an extra $15-20. It’d be a little pricey if you were getting MLB.tv for just your local team, and it would add to the costs if you wanted to buy the whole package, but wouldn’t it be worth it for local sports fans who would already be buying or consider buying MLB.tv? The added bonus would be that because you’re specifically buying the package to get your local team, commercials should be included, so teams wouldn’t have to worry about advertising revenues declining or their advertisers being worried about not reaching their target audiences.

It just seems too logical to not have happened already.

Matt
Member
Matt
4 months 9 days ago

I agree completely – it would well be worth it for cord cutters (I’m one of them) to pony up the extra money, rather than pay over $100 per month for a cable subscription. It seems like there are solutions that benefit everyone that aren’t even being explored.

Easyenough
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Member
Easyenough
4 months 9 days ago

The cable networks make a margin on top of the $2-$5/month they pay to teams for each subscriber for broadcast rights.

Lets say they are happy to keep all advertising revenue (pretty small by many reports) plus 150% of what they pay out to the team for broadcast rights in exchange for in-market streaming.

For larger market teams, that would be something like 12 months*$5(150%)=$90 plus the $90 MLB single team streaming fee. I would think that a $180 annual local-only would have to be the absolute lowest cost-replacement pricing.

And then you have to tack on the Cable’s use of MLB as one of the three sports anchors for getting subscribers to use cable at all. I don’t know what that is worth, but it must be at least (and probably more like several multiples) of what they pay out monthly, so add another $60 (or maybe $180).

Who would pay $240/year for an all games single team MLB streaming package? (No playoffs) Basic cable near me is about $55/month – $660/year.

If these numbers are off – improve them!

jiveballer
Member
jiveballer
4 months 9 days ago

I could be wrong (not a lawyer here) but I don’t believe the cable providers hold a stake in this. They may not like the sports network selling off their exclusivity agreement,but they are not party to the the network’s decisions – barring some kind of case by case contingency.

Bounty
Member
Bounty
4 months 9 days ago

I think a decent amount would pay 240$ a year to guarantee they’ll see the games they want to see, the way they want to see them.

williamnyy
Member
4 months 9 days ago

The value of sports programming to cable operators is why teams are negotiating such exorbitant long-term rights fees. Basically, sports is keeping many from cutting the cord, so operators pay big money to programmers (RSNs) who then pay big money to the teams. This relationship actually works to the advantage of sports fans because those who couldn’t care less about athletics are being forced to subsidize the habit. In order to replace that revenue from cable with in-market streaming, the cost would be prohibitive to most fans. So, be careful what you wish for.

Walter
Member
Walter
4 months 9 days ago

I see this same line of thinking repeated over and over, but its completely flawed. The faulty assumption is that somehow profits for the teams handing out TV deals need to be maintained. They don’t. They could go down once subject to a true free market.

Or to put it simply:

“In order to replace that revenue from cable with in-market streaming…”

This is a HUGE assumption that isn’t necessarily true.

mike sixel
Member
mike sixel
4 months 9 days ago

So, ya, no help at all to all of us that don’t want cable, but want to watch sports. Call me not surprised.

Deelron
Member
Deelron
4 months 9 days ago

No help to all who don’t want cable, but want to watch sports in market (good or bad, I think markets are 1-6 teams depending on the overlap).

Everyone else got a discount or more options (that’s my case, no cable but don’t care about the 1 in market team.)

milogoestocollege
Member
milogoestocollege
4 months 8 days ago

There are many simple workarounds to avoid the MLBTV blackout. I have several friends that have ditched cable and are able to see home teams on MLBTV. Obviously, the Fangraphs comments section isn’t the location to discuss such workarounds, but google is your friend.

Pirate Luke
Member
Pirate Luke
4 months 8 days ago

This. And for some, who tried to be “moral” and avoid going that route, this settlement is just motivation to eff morals and go get what I want.

Westside guy
Member
Member
Westside guy
4 months 8 days ago

… so here on FanGraphs I shouldn’t mention that I pay for MLB.tv Premium, jailbreak my iPad and use Protect My Privacy to make the At Bat app think I’m in Brussels?

Whoops. I’ll remember next time.

d_i
Member
Member
d_i
4 months 9 days ago

I can’t imagine Garber was out for $10 off his mlb.tv package when this lawsuit started. What control if any, would he have had over this settlement once it went to class action? Then does it just become the lawyers’ call? Just seems odd to settle when it does nothing to address the actual big issue = blackouts.

Doctor Of Utter Clarification
Member
Doctor Of Utter Clarification
4 months 9 days ago

Garber was not the only plaintiff. Once the class was certified Garber and his/her co-plaintiffs became the class representatives. As such, if my class action procedure is correct, they become (essentially) fiduciaries for the class. Their role should be to procur the most reasonable results for the class members as a whole.

The attorneys make recommendations to the class reps (Garber, et.al.). The class reps make the final decision.

scotman144
Member
Member
scotman144
4 months 9 days ago

I wanted to add that Red Sox fans who are subscribed to NESN and get their cable via FiOS can stream NESN broadcasts via the FiOS app so there’s an in-market streaming workaround for SOME Red Sox fans.

williamnyy
Member
4 months 9 days ago

Good summary, but one key fact was misrepresented (and has been so in most media reports). The price for an MLB.TV package has not really been lowered because the Basic Option was already being sold for $110 (vs. $130 for the Premium). The main difference between the two packages was Premium had access to Home and Road broadcasts for live games, whereas Basic only had the Home feed until the games were archived. In other words, it seems as if fans who were paying for Basic will now get Premium at no increase, while Premium subs will get a $20 discount. That amounts to $3/mo savings for only the latter.

As for the team only package, it seems to be priced at a prohibitive level. Why pay $90 for only one team, when $20 will get you 29 others? Some existing subscribers will likely take advantage of the discount, but I can’t imagine it will be a significant number. Rather, the one team package seems more likely to attract fans without an existing subscription.

Basically, MLB has preserved blackouts without putting much revenue at risk. If anything, it could come away with more revenue if the “Follow Your Team” option becomes popular and the lower team package attracts incremental customers.

Paul22
Member
Paul22
4 months 9 days ago

Thats what it starts out as, but within 5 years or so the package for all MLB games will be significantly higher, since as you say, if fans are happy with 90 bucks for 1 team (and many will choose this since many only watch 1 team), then its reasonable for those with access to all 30 teams should pay much more. Beginning of the end for cheap mlb.tv that gets you all. MLB will be spinning it off, and whoever buys it will want to make bigger profits to cover their investment.

Sad day for fans. Lawyers got paid so they are happy, but they got nothing for those they represented. Dems da facts

Deelron
Member
Deelron
4 months 9 days ago

I don’t think that’s a likely reason for costs to rise, they want the people who are paying $90 to pony up just a little bit more ($20) to get everything, which is much more likely then people paying say $270 for all teams, no one but the most addicted or need to do so for their employ are going to do that.

Paul22
Member
Paul22
4 months 9 days ago

It really does-absolutely-nothing, except allow those with cable at home to stream local games at work on a mobile device. Pffft.

keefer
Member
keefer
4 months 9 days ago

This is a completely meaningless “settlement,” and a HUGE victory for MLB. Sure, fans subscribing to MLB.TV will save a few bucks this year, but the entire structure of MLB’s TV monopoly is unchanged.

Millions of fans are screwed by this “settlement”–really, it’s the Plaintiffs’ “representatives” caving and grabbing whatever fees they can, and who cares about the people they allegedly “represent.”

The bottomline: MLB protects the monopolies of teams and cable networks

I live in Orlando. I’m an Orioles fan. I’ve subscribed to MLB.TV for the past two seasons, and while I enjoy the games I can get, it’s been a very, very frustrating experience. First, the technology is spotty at best.

More aggravating, though Orlando is by every industry measure (I work in the TV industry) a separate TV market from Tampa and Miami, I couldn’t get 22 Orioles games last season because this is, by MLB’s unique view, a “shared” TV market with both the Rays AND Marlins. So, whenever the Orioles played those teams, home or away, my subscription to MLB.TV was blacked out.

So, good for you Rob Manfred… shame on the lawyers who sold out fans yet again.

JimEd14
Member
JimEd14
4 months 8 days ago

And people somehow think that streaming or using a VPN is unethical after you paid for mlb.tv.

Mr. Plow
Member
Mr. Plow
4 months 9 days ago

I live in Iowa, and have 6 teams blacked out. 6!!! Even if I pay to watch my team (Cubs) there are 5 more teams I couldn’t watch if I also pay for MLB.tv. Then when the Cubs play those teams I’ll lose the ability to watch even if I paid extra to avoid the blackouts? What a crock. They’re blacking out teams you can’t even watch live on cable (Brewers), that have probably 10 fans in this state. Until they find a way to fix this, I’ll never pay for MLB.tv again.

canavja
Member
canavja
4 months 8 days ago

Unblock-us.com is a great workaround of the blackout ($5 a month subscription).

BigChief
Member
Member
BigChief
4 months 8 days ago

This might actually help some people more than I originally thought

I like a lot of people enjoy Netflix, HBO GO, Hulu and several other services without paying a dime by using relative login information.

I can now do the same thing with MLB.TV, which I already pay for, but now I’ll be able to stream in market games.

BigChief
Member
Member
BigChief
4 months 8 days ago

With my relative’s cable subscription login of course.

Shirtless George Brett
Member
Shirtless George Brett
4 months 8 days ago

It may be like -35 degrees outside right now but I have no blackouts when MLB season starts.

God Bless Canada. :)

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