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26: Matt Myers on Implications of Financial Pressure on the Business School.

A peer-to-peer discussion with the Dean of the Edwin L. Cox School of Business at Southern Methodist University.

Deans Counsel Podcast

Dr. Matt Myers, Dean of the Edwin L. Cox School of Business at Southern Methodist University joins the Deans Counsel Podcast for Episode 26 📢 


Entering his second term as Dean of the Edwin L. Cox School of Business, Dr. Myers offers a galvanized perspective on the financial pressures business schools are facing from the broader campus community. 


“You can only efficiency your way out of a financial problem for so long.” Said Myers.


Myers also describes what he is watching to stay competitive for the future as they prepare to open a new building in May 2024. 

Insights for current and future academic leaders. Listen to Episode 26 to find out more.

About Dr. Matthew B. Myers Matthew B. Myers is the ninth dean of the Cox School of Business at Southern Methodist University, where he holds the Tolleson Chair in Business Leadership and the David B. Miller Endowed Professorship. SMU Cox offers undergraduate and graduate degrees to around 2,500 students annually and maintains a global alumni network of about 42,000. Prior to his deanship at the Cox School, Myers served as dean and the Mitchell P. Rales Chair of Business Leadership at the Farmer School of Business, Miami University in Oxford, Ohio.

Show Transcript

Dave 0:13

Welcome to Dean's Council, a podcast aimed at supporting university leaders holding one of the more critical jobs on a university campus. Your panelists can Kring gemellus and Dave Ikenberry engage in conversation with highly accomplished Dean's and other academic leaders. Regarding the ever complex array of challenges that Dean's face and one of the loneliest and most unique jobs in the academy. Matt Meyers joined Southern Methodist University in August of 2017, as Dean of the Cox School of Business. Now in his second term, Matt has developed a rich perspective on their strategic trajectory business schools have been on as well as the campuses within which they reside. With that evolution in mind map reflects on the financial implications and the pressures he sees business schools facing, and how that in turn is affecting the strategic role of undergraduate and master's education in the business school. Matt also reflects on his recent experiences with rallying support for new building during the COVID era, and how he worked with his faculty to build Kocsis new next gen curriculum by listening to key strategic corporate partners, and hearing the advice they had about the workforce of the future. So

Ken 1:29

we're here today with Matthew Meyers, who was recently appointed to serve for five additional years. And his position is Dean of the Brunel, Cox School of Business at SMU, Matt joined as dean and August of 2017. So we know that that you have been through, you've been galvanized, you've been renewed, you've been accomplished some really significant and notable things over the course of the first term. But really, we also know that as you step into this next term, there are continued and sustained pressures, some new, some old, eager to hear from you about sort of what your what you faced some some about what you've done, and certainly about what you see coming and how, how we're going to address it. Well,

Matt Myers 2:24

I really appreciate you all having me on. It's great to see you both again. And no question. These are exciting times at SMU and business education in general. But they do come with their challenges. And it's great to talk about great

Dave 2:36

to have you met at a macro level, what do you see as the big pressures that that deeds in the business schools are going to be looking at both in the near term and maybe a little bit beyond? financially and

Matt Myers 2:50

otherwise? Yeah, the the financial side, I mean, need a crystal ball to see what's what's happening out there. But I do think one of the things we are seeing is definitely an increased pressure on business schools to address some of the financial shortcomings that are occurring on campus. And we all know, there's been a lot of talk about why these financial crises, as some people call them are happening on campuses and the over reliance on tuition increases to balance the books at the end of the year, and all that sort of thing. But I think when the rubber hits the road, one of the places that more and more campuses, look at to address those issues is the Business School. And you know, that's that's not just at the graduate level, but increasingly at the undergraduate level as the demand for Undergraduate Education increases. University see that as a real opportunity to fill some cash buckets and to at the same time serve the marketplace. And this is happening in real time, we are seeing, you know, really since maybe 911. Every time there's an inflection point in the economy, what we see is a demand for Undergraduate Education go up. And it never comes back down. So 911 2008 2009 2015. And a little bit, obviously, for COVID. We see more and more families and students wanting better value out of their four year education, particularly as those those tuition dollars have increased and become more expensive. And often that better value is represented in a business education, and the practicality of it as well as the career paths that they offer. And so university presidents and trustees look to the business school to address that. And they see that also as a way to attract increasingly high high quality students who are willing to pay full ride to go to business school. So the Dean's are reacting to that the schools are reacting to that some more successfully than others some more robustly than others. But I think that this is a pressure we're going to see continued for the coming decade and we're going to have to figure out ways the best ways to manage it as being entered as business schools.

Dave 4:49

So are you seeing this as a shrinkage say in the liberal arts and an expansion in business, or are you seeing it as let's not try to change Use the market shares per se. But let's try to expand let's add 100 students in business on the margin, you know, grow from 10,000 to 10,100, or whatever the number is.

Matt Myers 5:11

Yeah. And again, that's a great question because I think we have a tendency in the country to really look at the university system monolithically, which is a mistake, because it's kind of small midsize private schools like mine here at SMU, you know, our number of applicants continues to go up. But we can only take so many undergraduate students. So we're not increasing the number of students, but we are seeing a shift in those students want more business education than say liberal arts right now, that may not be the case at a large state university in the Midwest or a community college and on the west coast. But what we are seeing is really kind of a shift in demand levels away from many of the majors and directions of study that aren't adding value subsequent to graduation. And we're seeing that shift towards engineering and business and particularly in business, that I think there's a little bit of as the demographics change. And we all know that the number of 18 year olds across the country is not filling a lot of the university freshman rolls that they use to demographics change, the numbers may stay the same or even go down those individuals go into university, but there's definitely an increase in the number of kids who want to study business. And that probably represents a shift away from other disciplines.

Ken 6:28

How have you dealt with the tension between undergraduate and graduate demand? And, of course, undergraduate enrollment doesn't drive rankings, and we know that rankings have something to do with at least some of the interest of enrollment, alumni and other constituencies.

Matt Myers 6:46

Oh, yeah, those are apples and oranges. No question, particularly here at SMU SMU, we do not have an undergraduate revenue sharing model. Right. So our, our budgets at the Cox school are completely driven on the philanthropic side and on the graduate revenue side. But the issue with that is, is that the undergraduate demand is constant, we will always be able to fill our undergraduate freshman class at the COC school. And the matter of fact, we have a cap now on what that is because the demand was so high. On the graduate side, the volatility is always there, as we've seen, right, it goes up and down and up and down. And across the different MBA programs or MS programs, volume can change at any given minute, whether it's something dramatic, like COVID, or whether it's something less dramatic, like the changes in the accountancy hours needed in order to sit for the CPA. And so really forecasting and budgeting strategically on the graduate program revenue is much more difficult than it would be on the undergraduate revenue. So you have to reconcile that each year as a dean and as a Dean's team, in order to determine what your budget is going to be basically your revenue sharing plan for back with the university. In a perfect world, we would be able to count on the exact number of graduate students that want to attend SMU, or other schools or our graduate programs each and every year, and the same quality of that each and every year. But it does fluctuate. You know, you mentioned something that's really important here. And that's, that is rankings, it's the necessary evil. As we all know, we have to pay attention to it, even though we all have our opinions of it. But for rankings, particularly for a flagship MBA program, you have to maintain the type of quality that really represents not only your business school, but your university in a way that you want it represented nationwide. And so maybe you're gonna have a smaller class, for example, than you would in a class that is an executive MBA class or something. They're just different goals inside the classroom. The undergraduate side, we know we're gonna get 500 freshmen at the Cox school every year period, they're going to be great kids. On the graduate side, little more volatility there. And that causes some consternation every year that we're trying to put our budgets together,

Dave 8:55

that you mentioned the pressures which appear to be on the enrollment side of the house. But are you seeing these pressures from the campus infiltrate in other dimensions save philanthropy or in cost structure sharing or assumptions or issues like that? Yeah, I

Matt Myers 9:15

think that a couple of comments on that that come to mind. One is that, you know, particularly since I think we saw a lot of efficiency measures coming in on campuses, particularly around the 2008 2009 and 2015 timeframe, a lot of consulting firms came to the campuses and said, This is how you need to increase efficiency inside of the campus. And this has put pressure on all of us on the campus, not just the business schools. But I think we've also recognized that there's only you know, what's the old saying operational efficiency is not strategy, right? You can only efficiency your way out of a financial problem for so long. And then you have to start thinking about how you're adding value, and how the value is defined by the marketplace and As we mentioned, a lot of that is on more practical reasons on how we're going to spend a four year undergraduate degree program or how we're going to spend two years in a very expensive MBA program. So we have to figure out how to add value. And we can't do that on kind of the way that the timeframe that universities usually work, which is kind of the geologic timescale as opposed to real world time scale. So that's one. Yeah, on the philanthropy side, I think what's really been interesting to me is to see how many business schools now we're celebrating 100 years of business education at university x, right. So right after World War One with a lot of us started to have commerce programs, and so on, and so forth. And then, of course, after World War Two, with the GI Bill, a lot of business goals started to really grow. And they started to grow not only from standpoint of curriculum, but also from structures. And I think that's also why you're seeing a lot of business schools, including my own here at Cox build new buildings, because we've just about reaching a point where in the 50s, and 60s, those buildings built in, need to be replaced. The benefit of that though, is that are the Business School Alumni rosters are getting bigger and bigger every year. We've got 40,000, worldwide here at Cox, and we're a small business school, to be honest with you. And a lot of those alumni rosters have done very well. And so the emphasis when it comes to the capital campaign or the campus, there's more emphasis on the business alumni than ever before, and that will probably continue to increase. The other side of that, Dave, is that a lot of the emphasis on those alumni are getting pulled in directions that are away from the business school, whether it's athletics, or whether it's something else. And so there's some tension there that's obviously created. And we hear about that quite a bit. We're all here for the good of the Univer, our universities, and we, you know, we serve the university at large, but at the same time, we have to keep an eye on our own alumni bases. I think that we're seeing a lot of these campaigns, the expectations are that business goals will raise anywhere between 15 and 30% of the campaign total. And I think we're also seeing that number really start to move much more towards the 2025 and 30% level, as these campaigns really take shape. And, and it makes sense to do that. But at the same time, there is a tension there about how that's going to take place, and what sort of allocation of that those philanthropic dollars are gonna just gonna happen on campus.

Dave 12:18

So again, going back to this macro environment, two questions that are kind of almost the same, is this going to rebrand? What campuses project themselves to be? Just hypothetical example, you know, Boulder likes to project itself as a green campus, whether that's appropriate or not. But if this imagery of the B school having and again, this is all hypothetical, but you can almost see that having to create some tension about campus identity, which then raises the next question of if business is gaining, taking more of the spotlight, is that going to create tension with those were programs that historically might have been on the fringe or at the center of the spotlight, but are now and cast into the dark? Where do you see this all going? Matt? You know,

Matt Myers 13:16

like, yeah, that's a great, that's a great thing that we all have to reconcile. Right. Like,

Dave 13:21

like, as a dean, when I walk around campus, you know, do I need to change the way I think in and interact with everybody?

Matt Myers 13:32

I think that the identity of a campus matters. And I think, again, you know, we shouldn't be thinking about the portfolio of American universities, monolithically, right, what boulder offers, is and should be different than what UCLA offers, which is and should be different than what Florida Atlantic offers, and so on, and so forth, and SMU, so the identity matters. And we at SMU, we are a kind of a mid size, but I guess we've got about 12,000 students undergraduate graduate mid size, urban university, private with a a residential liberal arts history, right? So we have to think about how big do you want your business school to be? Do you want 40% of your undergraduates to be business majors? Because we couldn't be right. But is that the right thing for the campus? Is that the right way for the campus brand and identity to evolve over the next 10 or 15 years? And that's a question. It's not just for the business school deans or us on this on this discussion. It's for the trustees, it's for the alumni. And then what you know who are we serving as a I spent 13 wonderful years at the University of Tennessee Knoxville, which is a land grant institution, they are to serve the people of the state of Tennessee, so their answer may be very different than what SMU or rice or Emrys is. But I think the question has to be asked and has to be asked honestly on a campus what role does your business school play on this campus? And in many cases, I think the business school can be a Real hub for that interdisciplinary work that is so important that we work very closely with our engineering school here at SMU, we're very happy to do that. Hopefully, they're happy to be working with us as well. And it's worked out very, very well. Other campuses may not have that opportunity, or may not have that kind of view that that's really important. But I don't think that conversation of who we are, and what is our business school in that identity takes place enough? I think it has to the business schools just can't be the cash cow. And on too many campuses, that's exactly what they are business schools are subsidizing so many other operations on campus and many institutions. And that's, that's not healthy. So I think there's a kind of a two way street of looking at how we're old is your business school play? How can your business school do something besides just participate to the financial model? And bring in these really bright undergraduate and MBA students? What role are they really going to play? And then the campus also has to ask the business school in concert with the business schools kind of position in strategic and strategic direction. Beyond that, how big do we want the business school to be on this campus? And who are we serving in that role? So I think there's a lot of tension out there, sometimes we kind of look the other way or kick the can down the road. But the schools, the campuses who have addressed this already seem to be in a much healthier position. And those who haven't,

Ken 16:20

we complimented you at the outset of this conversation about the building of a building and in 2023, and really, throughout the pandemic. And you've now referred to some of the campus wide applications. But would you just talk a little more details about what the vision is sort of university wide for the new building and how you've navigated the planning of it?

Matt Myers 16:45

Yeah, we started this project in 2017. And as we talked, before, we came on air, we really started from scratch. We weren't even on the campus master plan. And then we plan on cutting the ribbon on this building on May 3 2024, at 1130 in the morning for those keeping score at home. And it's been it's been a long run it's $140 million project, it was initially 170 million and then COVID hit, of which we've raised about 120 million for the 285 million we've raised over the last six years. So we've had a lot of success on the philanthropic front. But the real impetus behind this was that we were an aging business school from the standpoint of our facilities, we had long outgrown it. And at the same time, part of the sell back to the campus was we're building on the on the same footprint. So we're not moving to a greenfield we're building and expanding on the same footprint, which is the dead center of this beautiful campus at SMU to run on what's called the boulevard. Because of that. One of the things that we really used as a support for getting the permission and raising the funds for this was look at the central role of business on a campus, like SMU is in concert with engineering and concert with law. Even in concert with we have an excellent performing arts school here called the metal School of the Arts, which is one of the probably I would say one of the top 10 in the country, working with the metal school, from the standpoint of digital and advertising, all of those things mean that the benefits of our growth are benefits that are expanded beyond the business disciplines. And so part of that was part of that conversation to really get people excited about it and get get really the permission from the President and the trustees to move forward on this was to say this isn't just about business education, and an SMU that that integrated role of what we do from the standpoint of research, education, executive education, that integrated role is one we want to play. It's one that's going to be good for all involved for from the students. It meets the student welfare standard, because integration and multidisciplinary aspects of university education are so important. But it also meets the needs from the standpoint of expanding research, expanding grants and contracts are rolled r1 here and SMU which we hope to hit very soon. All of that means that we have a responsibility once this building is finished here and eight months and 21 days or whatever it is, we have a responsibility to get back. Right we have a responsibility to work very closely with the other schools on campus. And we have great relationships with the other schools on campus we have, we have a great cadre of Dean's that I really enjoy working with. But it is a big responsibility. And we have to figure out how to do that in ways that are constantly changing and evolving with the business landscape, which is a very fast, almost day to day change, as you all know, and still be able to work across campus and have campus work with us in order to be as agile and reflexive as we can be. So we're very excited about it. We know the work begins on the day we cut the ribbon and we're very excited about working with our colleagues here. And really in the whole North Texas area. Matt

Dave 19:46

circling back to some of the changing economic landscape that we're seeing at high levels and how that's affecting vesicles. How much of this are you sharing with faculty and staff? Taff as you interact with them, are you shielding this from them to let them do their thing? Or how are you engaging or not engaging along that dimension,

Matt Myers 20:10

we have our faculty retreat, hold a faculty retreat tomorrow. So if I had my slides, I'd show them to you. We engage faculty all in on this, and the faculty are aware of some of the budgetary constraints that we have to work with. They're aware of the things that we have to do from the standpoint of fundraising in order to make things work, they are aware of our day to day budget, and how it's different from other schools on campus. So to the degree that they are interested, we are an open book here. And that's not easy. I mean, kind of getting back probably to the patina behind your question, Dave, a little bit. Is that easy? And the answer's no, because you have to balance between kind of the relationship with the campus and your relationship with your faculty and staff. Right. And in between that you're the buffer. And if the faculty feel like the school's not getting the support it needs or is, you know, subsidizing other programs, such an extensive extent, right, that can cause tension with the campus and with the dean, and campus thinks that Well, you shouldn't be telling your faculty these sort of things, you have to disagree that no, everybody needs to know how this works. So it is a difficult thing to manage, as you know it. Something that that is, but in my mind it philosophically, we have phenomenal faculty here at Cox, who are here for the right reasons. And that's not the case everywhere, right. But here, we're lucky enough to have that. So being able to share that with the people here, it's just been something that I've done year in and year out, I think it's important to do.

Dave 21:47

So some of it sounds like it's your style, you're gonna get a little bit of transparency out of this, which creates a little bit of honesty, but it also, it may assuage some of the skeptics who are like, Hey, we're, you know, we're the cash cow, we're not getting our fair share of the pie kind of things, I guess those are the kind of YouTube outcomes you're driving for,

Matt Myers 22:07

you know, the university landscape is so complex. And again, we can't go back philosophically, can you be a university and not have foreign language department? Right, right. Coralife part is never going to make money. Right, right. I mean, just using that, as an example, is an old international school myself, my undergraduate degrees in structural geology, I don't only have an undergraduate business degree, so I was one of those folks that really benefited from a dedication from universities to go say, Hey, this is who we are. And we're not here to make money as a for profit venture. And so we're going to have to lean on some other areas in order to make our university hold. And we understand that business schools are probably one of those things, that's one of the reasons that we're trying to raise as much money as we can here at Cox, in order to take the pressure off ourselves and to grow graduate programs in order to take the pressure off ourselves. But at the same time, we do know, and we'd love being a part of a university, not a standalone business school. Now talk to so you know, so you all have to talk to some of our colleagues at the standalone business schools in Europe, who are not affiliated with a with a Heidelberg, or an Oxford, or Sorbonne or what have you. And they do in many ways, have a great life. But in some ways, they don't, because they're not part of a bigger hole, that is a university, there's no better place in the world to be on American university campus in the fall that we got coming up. It's just one of the things that makes our job so great. But it does cause a little concern, I'm part of the faculty and staff on are we being milked in ways that are keeping us from growing and keeping us from remaining as autonomous as we need to be in order to be competitive inside the business cold landscape. And as you all know, it is a very, very, very competitive business goal landscape, including here in Texas.

Ken 23:46

On a related note, you've created this next gen Cox curriculum, which is a pretty bold the transformation as well. Can you talk some about how back to merged?

Matt Myers 23:55

Yeah, that something we're very proud of, and something that you got to you got to take your armor off and bring a lot of your strategic partners in to tell you what you're doing well, and what you're not doing well, and how you have to change in order to continue to be a strategic partner for them. We are very fortunate to be again in North Texas have just a phenomenal economy. We're on fire here in Texas. We also have great partners on the East Coast and West Coast, we bring them in, we help them build our curriculum, that is basically a next generational way of educating to put them inside of the workplace where they can add value to that workplace on day one. So I would say I would give a lot of credit to our faculty really kind of just sitting down and understanding that that input from our strategic partners was what was going to make it happen and make it valuable and they did.

Dave 24:39

As we were starting our conversation, Matt, you talked a little bit about how we're at the upper end of our tuition capacity, maybe even a little overextended. And as we think about the economic pressures that maybe forces us to look at cost efficiency issues. How much of That is brushing up against you and then in other colleges across the campus, and how do you manage or to anticipate having to deal with some of the negativism that comes out of that type of leadership?

Matt Myers 25:12

Challenge? Yeah, it does influence what we offer here, because we are an expensive private university, there's no way to go, I've got two daughters here, I can tell you from personal experience, that I understand what the costs are associated with going into a school, like SMU or similar school. And that influences really the types of programs we're offering here, because we want the value to be high upon graduation. For example, we don't have a sales program here, because we just don't see how we could build a program that with the starting salaries that a sales program might offer, which is a very valuable program to have, but it's not necessarily the right one for us. And so we have had to make some difficult choices and the types of programs that we're offering, partly because of the financial side because of the tuition side. But at the same time, we've learned to live with that. And I think I think we're doing a pretty, pretty good job of it. I think, when it comes down to the next five years, when getting back to your macro question, the next five years what her family is going to do, and what are MBA students going to consider as they go forward, we have gotten incredibly expensive, particularly on the private school side and the MBA side. And the decisions that they're making now are Arthur decisions that they weren't making 20 years ago. The other side of it is I think that undergraduate business education has gotten so good at so many schools, that the gap between an undergraduate and an MBA graduate has closed is closing. And employers know that right, so they're going back and they're hiring a lot out of undergraduate programs. And a lot of those folks are not going back to get the MBAs because they're basically getting their MBAs and the new jobs. And so this is put pressure on the MBA enrollments nationwide. And as that undergraduate quality increases in more and more universities across the country, I think what you're going to see is you're going to see a continuation of hiring firms that are looking at really high quality undergrads, who they can put in front of a client the first day, who can work continues, who's the first year to work last year to leave, and really invest in that person's future inside of the company in that person's leadership path inside of the company, and maybe differ away a little bit from some of the NBA hiring that they've done in the past. And that will have a pressure on bringing some of the MBA tuition dollars down. And we'll see how that works. Over the next five or 10 years, when we're out talking to our hiring companies, whether they're in Texas, San Francisco, London or New York, we're hearing a lot of that, that they have kind of moved to an undergraduate hiring model or a hybrid model between undergraduate MBAs. And I think we're gonna see that pressure continue on the MBA side. And also that will help increase the number of folks that want to study on the BBA side on the undergraduate side as they see what those placements are.

Ken 27:58

Well, Matt, we really enjoyed this conversation that's filled with insights, experience perspective, we know our audience will enjoy hearing about it as well. Congratulations on a great first term, all the best for your second we know anything you do will be noteworthy and successful. Well,

Matt Myers 28:16

I appreciate all you all are doing on this. We're all getting a lot out of it. And when we open up new building, I hope you all come and visit champagnes on me.

Dave 28:24

Glad to hear at 1130 That's right. All righty. Thanks so much, Matt.

Matt Myers 28:32

Thank you guys.

Ken 28:33

Thanks. Yeah, bye.

So today, that was an interesting conversation. What were your thoughts? It was

Dave 28:47

Ken, the thing that struck me the most I think was Matt's continuing to come back to the role of undergraduate education in defining the business goals not that graduate programs are going away. Of course they're not. But when you look at how undergraduate education has evolved over the last 50 years, it really is causing it should cause I think a lot of Dean's to rethink how they're balancing out their portfolio. And it also raises other pragmatic questions like, budget, for example, I was, and I wish we had a little bit more time to get into it. But if we've got the importance of Undergraduate Education rising not only for the importance of the business school, but also for the relevancy of the campus, then it makes one wonder why they haven't moved to more of an RCM environment where it makes it a little bit easier to make these flows happen to accommodate the business schools, changing shape and size. The lack of that RCM environment surely must cause a lot of pressure sure that we didn't get a chance to get into, but my own personal experiences that that does really hamper life quite a bit or can hamper life quite a bit. What was your thoughts?

Ken 30:11

Yeah, no, I agree. Part of my takeaway was that sort of character and disposition matters in these roles. Yeah. And the fact is, we talked about a lot of pressures and a lot of challenges sort of across the constituent population. And he does it in a way that shows that he's empathetic and understanding and caring and nonpartisan, and, you know, was really very comfortable talking about issues and solutions. And there are lots of issues but also, he in particular, has addressed those issues with lots of new solutions, I do think, somewhat unheralded, the idea of building a building through the pandemic, a building is going to have mixed or multiple use, sort of beyond cots itself to both some courage and some ability to sort of work across the different constituent populations, right, literally within the university, and particularly within a university where they are incentive based budgeting, right? Absolutely.

Dave 31:17

Yeah. He certainly has a high respect for his other colleagues across campus, which is vital in the channel. Enjoy. Oh, great show can

Ken 31:29

Yeah. Terrific. Alrighty, see you soon.

Dave 31:32

Thank you for listening to this episode of Deans Counsel. This show is supported in part by Korn Ferry leaders in executive search. Deans Counsel was produced in Boulder, Colorado by Joel Davis of analog digital arts. For a catalogue of previous shows, please visit our website at Dean's If you have any feedback for us, please let us know by sending an email to feedback at Dean's And finally, please hit follow or subscribe on your favorite podcast player so you can automatically receive our latest show.


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