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    CVS shares pop 10% on big earnings beat, even as high medical costs drag down insurance unit

    CVS Health reported fourth-quarter revenue and profit that topped estimates, even as its troubled insurance business saw higher medical costs. 
    The company also issued a full-year 2025 adjusted profit outlook of $5.75 to $6.00 per share, which was in line with Wall Street’s expectations.
    It caps off the first full quarter with David Joyner, a longtime CVS executive, as CEO of the troubled retail drugstore chain.

    CVS Health on Wednesday reported fourth-quarter revenue and profit that topped estimates, even as its troubled insurance business continued to see higher medical costs. 
    The company also issued a full-year 2025 adjusted earnings outlook of $5.75 to $6 per share, which was in line with Wall Street’s expectations. But CVS did not provide a revenue forecast for the year. 

    It caps off the first full quarter with David Joyner, a longtime CVS executive, as CEO of the troubled retail drugstore chain. Joyner succeeded Karen Lynch in mid-October, as CVS struggled to drive higher profits and improve its stock performance.
    The company underwent a management reshuffle as part of a broader turnaround plan that includes $2 billion in cost cuts over the next several years. CVS has grappled with rising costs in its insurance unit, Aetna, and a retail pharmacy business pressured by softer consumer spending and lower reimbursements for prescription drugs. 
    Here’s what CVS reported for the fourth quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG: 

    Earnings per share: $1.19 per share adjusted vs. 93 cents per share expected
    Revenue: $97.71 billion vs. $97.19 billion expected

    The company’s shares rose 10% in premarket trading.
    CVS and other insurers such as UnitedHealth Group and Humana have seen medical costs spike over the last year as more Medicare Advantage patients return to hospitals for procedures they delayed during the pandemic. 

    Medicare Advantage, a privately run health insurance plan contracted by Medicare, has long been a driver of growth and profits for insurers. But investors have become concerned about the runaway costs tied to those plans, which cover more than half of all Medicare beneficiaries. 
    CVS booked sales of $97.71 billion for the fourth quarter, up 4.2% from the same period a year ago due to growth in its pharmacy business and insurance unit. 
    The company posted net income of $1.64 billion, or $1.30 per share, for the fourth quarter. That compares with net income of $2.05 billion, or $1.58 per share, for the year-earlier period. 
    Excluding certain items, such as amortization of intangible assets, restructuring charges and capital losses, adjusted earnings were $1.19 per share for the quarter.
    CVS said its fourth-quarter earnings reflect higher medical costs in its insurance business and lower Medicare Advantage star ratings for the 2024 payment year, both of which weighed on the segment’s operating results for the quarter. Those star ratings help Medicare patients compare the quality of Medicare health and drug plans. 

    Pressure on insurance unit

    All three of CVS’ business segments beat Wall Street’s expectations for the fourth quarter.
    CVS’ insurance business booked $32.96 billion in revenue during the quarter, up more than 23% from the fourth quarter of 2023. Analysts expected the unit to take in $32.89 billion for the period, according to estimates from StreetAccount.
    But the business reported an adjusted operating loss of $439 million for the fourth quarter, compared with adjusted operating income of $676 million in the year-earlier period. That change was driven by higher medical costs and the company’s Medicare Advantage star ratings, among other factors.

    More CNBC health coverage

    The insurance unit’s medical benefit ratio — a measure of total medical expenses paid relative to premiums collected — increased to 94.8% from 88.5% a year earlier. A lower ratio typically indicates that a company collected more in premiums than it paid out in benefits, resulting in higher profitability.
    The fourth-quarter ratio was lower than the 95.9% that analysts were expecting, StreetAccount estimates said.
    CVS’ health services segment generated $47.02 billion in revenue for the quarter, down more than 4% compared with the same quarter in 2023. Analysts expected the unit to post $44.06 billion in sales for the period, according to StreetAccount.
    That unit includes Caremark, one of the nation’s largest pharmacy benefit managers. Caremark negotiates drug discounts with manufacturers on behalf of insurance plans and creates lists of medications, or formularies, that are covered by insurance and reimburses pharmacies for prescriptions.
    CVS’ health services division processed 499.4 million pharmacy claims during the quarter, down from 600.8 million during the year-ago period due to the loss of an unnamed large client. Tyson Foods told CNBC in January 2024 that it dropped CVS as the pharmacy benefit manager for its roughly 140,000 employees, but it is unclear if any other companies stopped working with CVS during the year, as well.
    CVS’ pharmacy and consumer wellness division booked $33.51 billion in sales for the fourth quarter, up more than 7% from the same period a year earlier. Analysts expected sales of $33.03 billion for the quarter, StreetAccount said.
    That unit dispenses prescriptions in CVS’ more than 9,000 retail pharmacies and provides other pharmacy services, such as vaccinations and diagnostic testing.
    The increase was partly driven by higher prescription volume, CVS said. Pharmacy reimbursement pressure, the launch of new generic drugs and lower volume from front-of-store items like pantry food and toiletries, including from decreased store count, weighed on the unit’s sales.

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    Zelle payments top $1 trillion in 2024 as network’s growth outpaces rivals including PayPal

    Zelle crossed $1 trillion in total volumes last year, which it said was the most ever for a peer-to-peer platform.
    The payments network said its user base jumped 12% to 151 million accounts in 2024, and that the total dollars sent on the platform jumped 27% from the year earlier.
    Zelle was launched in 2017 in response to the rise of platforms like Venmo, PayPal and CashApp.

    Zelle icon displayed on a phone screen and Zelle logo displayed on a screen in the background are seen in this illustration photo taken in Krakow, Poland.
    Jakub Porzycki | Nurphoto | Getty Images

    Zelle, the payments network run by bank-owned Early Warning Services, crossed $1 trillion in total volumes last year, which it said was the most ever for a peer-to-peer platform.
    The firm said Wednesday that its user base jumped 12% to 151 million accounts in 2024, and that the total dollars sent on the platform jumped 27% from the year earlier.

    Last year’s payment volumes were “by far the most money ever moved by a P2P payments service in a single year,” Denise Leonhard, general manager of Zelle, told CNBC.
    Zelle, which was launched in 2017 in response to fintech platforms like Venmo, PayPal and CashApp, has some key advantages over those players. EWS is owned by seven of the biggest U.S. banks, including JPMorgan Chase, Bank of America and Wells Fargo, and Zelle allows for instant money transfers made within the apps of thousands of member institutions.
    Its growth rate last year exceeded that of PayPal, which reported that total P2P payments volumes reached more than $400 billion.
    Zelle’s meteoric rise comes amid accusations that the network and the three biggest U.S. banks on it failed to properly investigate fraud complaints or give victims reimbursement. The company has introduced measures to reduce fraud and has said that 99.95% of transactions are free of fraud and scams.
    Growth is being driven as bank customers increasingly use Zelle instead of cash or checks, and as small businesses adopt the payment option, said Leonhard.
    “People are using Zelle in order to do things like pay their rent or paying their nanny,” Leonhard said. “We want to continue to be top of mind for those consumers to be able to use this every day.” More

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    Tom Brady buys ownership stake in sports collectibles company

    Tom Brady will acquire a 50% stake in CardVault.
    The company will change its name to “CardVault by Tom Brady.”
    Card collecting has surged since the Covid-19 pandemic.

    Seven-time Super Bowl champion Tom Brady is entering the sports collectibles space.
    Brady will acquire a 50% stake in CardVault, a sports card and memorabilia retailer, the company announced on Wednesday.

    As part of the deal, CardVault will change its name to “CardVault by Tom Brady,” and is planning to rapidly scale its footprint. Card collecting has experienced a resurgence since the Covid-19 pandemic, leading to record sale prices.
    The sports collectibles retailer currently has locations at TD Garden in Boston; Gillette Stadium in Foxborough, Massachusetts; and Foxwoods Resort Casino in Mashantucket, Connecticut. The company will open a new flagship location this spring at American Dream mall, next to MetLife Stadium in New Jersey, and said it is actively identifying new locations in other sports hubs.

    CardVault retail store in Boston

    “This isn’t just about buying and selling cards; it’s about curating history, building community, turning fans into collectors, and giving them access to own great moments in sports,” Brady said in a statement.
    CardVault was founded in 2020 as a way for collectors to buy, sell, grade and trade cards. The store also sells memorabilia.
    The company is planning to expand its digital content as it looks to reach new collectors and investors.

    This isn’t Brady’s first foray in the collectibles space. In December, he put his valuable watch collection up for sale at Sotheby’s.
    The former quarterback was also seen buying up cards at Fanatics Fest in August.
    “Sports collectibles and cards have been part of my DNA since childhood, and CardVault has set the gold standard for what a modern fan experience should be,” Brady said. More

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    Restaurant Brands reports 2.5% same-store sales growth, fueled by Burger King and Popeyes

    Restaurant Brands International reported quarterly adjusted earnings per share of 81 cents and revenue of $2.3 billion.
    Burger King’s and Popeyes’ U.S. restaurants outperformed Wall Street’s expectations.

    The Burger King logo is displayed at a Burger King fast food restaurant on January 17, 2024 in Burbank, California.
    Mario Tama | Getty Images

    Restaurant Brands International on Wednesday reported same-store sales growth of 2.5%, fueled by the better-than-expected performance from Burger King’s and Popeyes’ restaurants.
    Shares of the company rose roughly 3% in premarket trading.

    Here’s what the company reported:

    Earnings per share: 81 cents adjusted. That may not compare with the 79 cents expected by LSEG.
    Revenue: $2.3 billion. That may not compare with the $2.27 billion expected by LSEG.

    The restaurant company reported fourth-quarter net income of $361 million, or 79 cents per share, down from $726 million, or $1.60 per share, a year earlier.
    Excluding corporate restructuring fees and other items, Restaurant Brands earned 81 cents per share.
    Net sales climbed 26% to $2.3 billion, fueled largely by its acquisitions of its largest U.S. Burger King franchisee and Popeyes China, both which occurred last year.
    Still, the company saw better-than-expected sales across all of its segments during the quarter.

    Burger King reported U.S. same-store sales growth of 1.5%, beating StreetAccount estimates of 0.8%. The burger chain has been in turnaround mode for more than a year.
    Popeyes’ U.S. same-store sales ticked up 0.1%, reversing last quarter’s declines.
    And Tim Hortons reported domestic same-store sales growth of 2.5%. The Canadian coffee chain accounts for more than 40% of Restaurant Brands’ quarterly revenue.
    Restaurant Brands’ international restaurants saw same-store sales growth of 4.7%, beating StreetAccount estimates of 2.7%. The company credited its Burger King and Popeyes locations for fueling higher sales.
    The company also increased its footprint by 3.4%, adding 1,055 new restaurants from the same period a year ago.
    Looking to 2025, Restaurant Brands plans to spend between $400 million and $450 million on consolidated capital expenditures, tenant inducements and other incentives. More

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    Fintech unicorn Zepz to lay off 20% of its global workforce, sources say

    London-based fintech Zepz is laying off around 200 IT workers as part of a major redundancy plan, two employees impacted by the move told CNBC.
    Zepz confirmed to CNBC it is eliminating roles to “sustainably support the next phase of long-term strategic goals and continued growth.”
    As part of the cost-cutting exercise, Zepz also proposed the closure of business units in Kenya and Poland.

    Mark Lenhard, CEO of U.K.-based remittances platform Zepz.
    Lukas Schulze | Sportsfile for Web Summit via Getty Images

    LONDON — British digital remittances company Zepz is laying off dozens of IT workers and is in the process of closing down business units in Poland and Kenya.
    Roughly 200 staff members will be impacted by the redundancy measures, two employees who were made redundant told CNBC, asking to remain anonymous due to the sensitivity of the matter.

    As of January, London-headquartered Zepz — formerly known as WorldRemit — had a global headcount of 1,000 people, meaning the redundancies affect around 20% of its total workforce.
    The layoffs affect several IT functions at the company, including database administration, development operations and software engineering, the former employees said.
    Zepz confirmed to CNBC that it was reducing headcount in order to “sustainably support the next phase of long-term strategic goals and continued growth.” The company declined to comment on the number of employees impacted by the layoffs, with a spokesperson explaining that the redundancy process was ongoing. 

    “Following the successful completion of its replatforming efforts, bolstered by advanced automation and AI, Zepz has embarked on a strategic initiative to optimise operations across the organisation,” a Zepz spokesperson told CNBC by email.
    “This transformation has reinforced the technology foundation and reduced the need for certain operational and technical capacities, prompting a proposed reduction in roles as part of the overall plan,” the spokesperson added.

    Zepz has been touted as one of Britain’s fintech darlings. The company was founded by Ismail Ahmed, a Somalia-born British entrepreneur who fled the country during the Somali Civil War. Ahmed today serves as the company’s non-executive chairman.
    The group was renamed Zepz following the acquisition of money transfer platform Sendwave in 2020, with the brand and WorldRemit coming under one parent company.

    ‘Difficult choice’

    CNBC obtained a company memo announcing the cost-cutting measures shared by Zepz CEO Mark Lenhard internally in January.
    “Today we are announcing a very difficult decision — proposed reductions in our team across all HQ functions, and most regions. And specifically we are proposing the closure of our Kenya and Poland employing entities,” Lenhard said in the memo.
    Zepz touts itself as a “remote-first employer,” with regional offices in Kenya and Poland.
    “This is a difficult choice, which impacts the lives of our colleagues and friends. This is also a choice which is critical to the success of our mission to serve immigrants everywhere. Both facts are true, at the same time,” Lenhard said.
    “To be clear, this is not a change of strategy. We’re doubling down on our mission in an effort to expand our impact faster,” he added. “In some places, this will mean we’ll need to continue to ruthlessly prioritize. In others, we’re going to get more efficient. In many cases it will involve rethinking how we do things today.”
    Zepz’s spokesperson insisted that the IT worker layoffs “will not impact customers in any region or market,” and added that the firm “remains committed to its mission of serving migrants worldwide, driving innovation, and delivering meaningful financial solutions to millions globally.”
    This isn’t the first time Zepz has cut a spate of roles to save on costs. In 2023, Zepz laid off 420 employees, which accounted for about 26% of its global headcount at the time. Later that year, Zepz slashed a further 30 roles across its people and marketing functions.
    Zepz has long been touted as a potential IPO candidate, but a timeline for this is unclear. Counting the likes of Accel, TCV and Leapfrog as investors, the startup was valued at $5 billion in 2021. The company announced a $267 million funding round last year.
    Zepz faces competition from several notable digital payments players including PayPal, Wise, Revolut and Remitly.
    WATCH: We now have ‘a whole generation’ of fintechs preparing for IPOs, says QED Investors’ Nigel Morris More

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    Chinese tech giant Baidu to release next-generation AI model this year as DeepSeek shakes up market

    China’s Baidu plans to release the next generation of its artificial intelligence model in the second half of this year, according to a source familiar with the matter.
    The planned update comes as Chinese companies race to develop innovative AI models to compete with OpenAI and other U.S.-based companies.
    Baidu was the first major Chinese tech company to roll out a ChatGPT-like chatbot called Ernie in March 2023. But despite initial momentum, the product has since been eclipsed by other Chinese AI chatbots from large tech companies such as Alibaba and ByteDance as well as startups.

    Men interact with a Baidu AI robot near the company logo at its headquarters in Beijing, China April 23, 2021.
    Florence Lo | Reuters

    BEIJING — China’s Baidu plans to release the next generation of its artificial intelligence model in the second half of this year, according to a source familiar with the matter, as newer players such as DeepSeek disrupt the segment.
    Ernie 5.0, called a “foundation model,” is set to have “big enhancements in multimodal capabilities,” the source said, without specifying its functions. “Multimodal” AI can process texts, videos, images and audio to combine them as well as convert them across categories — text to video and vice-versa, for instance.

    Foundation models can understand language and perform a wide array of tasks including generating text and images, and communicating in natural language.
    Baidu’s planned update comes as Chinese companies race to develop innovative AI models to compete with OpenAI and other U.S.-based companies. In late January, Hangzhou-based startup DeepSeek prompted a global tech stock sell-off with the release of its open-source AI model that impressed users with its reasoning capabilities and claims of undercutting OpenAI’s ChatGPT drastically on cost.

    “We are living in an exciting time … The inference cost [of foundation models] basically can be reduced by more than 90% over 12 months,” Baidu CEO Robin Li said at the World Governments Summit in Dubai this week. That’s according to a press release of his fireside chat with Omar Sultan Al Olama, UAE’s minister of state for artificial intelligence, digital economy, and remote work applications.
    “If you can reduce the cost by a certain percentage, then that means your productivity increases by that kind of percentage. I think that’s pretty much the nature of innovation,” Li noted.
    Baidu was the first major Chinese tech company to roll out a ChatGPT-like chatbot called Ernie in March 2023. But despite initial momentum, the product has since been eclipsed by other Chinese AI chatbots from startups as well as large-tech companies such as Alibaba and ByteDance.

    While Alibaba shares have soared 33% for the year so far, Baidu shares are up 6%. Tencent has notched gains of about 4% for the year so far. ByteDance is not listed.

    Baidu’s Ernie model already supports the integration of generative AI across a range of the company’s consumer and business-facing products, including cloud storage and content creation.
    Last month, Baidu said its Wenku platform for creating presentations and other documents had reached 40 million paying users as of the end of 2024, up 60% from the end of 2023. Updated features, such as using AI to generate a presentation based on a company’s financial filing, started being rolled out to users in January.
    The current version of the Ernie model is Generation 4, released in Oct. 2023. An upgraded “turbo” version Ernie 4.0 was released in August 2024. Baidu has not officially announced plans to release the next generation update.
    The latest version of OpenAI’s ChatGPT, GPT-4o, was released in May 2024. OpenAI CEO Sam Altman said in a Reddit “ask me anything” session earlier this month that there wasn’t a public timeline for GPT-5’s release.
    Baidu did not respond to a request for comment. More

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    Tequila, mezcal are the only spirits growing in sales, but tariffs would be ‘catastrophic,’ industry group says

    U.S. spirits revenue slipped in 2024, but the category maintained its market share lead ahead of beer and wine.
    Consumer demand remained strong for spirits-based ready-to-drink cocktails, along with high-end tequila and mezcal.
    Tariffs would be a “catastrophic blow” to U.S. distillers in 2025, said Distilled Spirits Council of the U.S. CEO Chris Swonger.

    A seller holds up a bottle of Casamigos, tequila from Diageo, the world’s leading spirits maker, at a liquor store in Monterrey, Mexico, on Dec. 10, 2024.
    Daniel Becerril | Reuters

    The U.S. spirits industry maintained its market share leadership over beer and wine for a third straight year in 2024, even as revenues slid, according to new data released Tuesday.
    Spirits supplier sales in the U.S. fell 1.1% last year to a total of $37.2 billion, while volumes rose 1.1%, according to the annual U.S. economic report from the Distilled Spirits Council, a leading trade organization.

    That is the first time revenue for the spirits category has fallen in more than two decades. Despite a return to more typical buying patterns after a pandemic boom, spirits revenues have grown an average 5.1% annually since 2019. Between 2003 and 2019, the average annual growth rate was 4.4%.
    “While the spirits industry has proven to be resilient during tough times, it is certainly not immune to disruptive economic forces and marketplace challenges, and that was definitely the case in 2024,” said DISCUS President and CEO Chris Swonger.

    Tequila and mezcal remained a bright spot for the year as the only spirits category showing sales growth, as revenue climbed 2.9% to $6.7 billion.

    Top five spirits categories by revenue in 2024:

    Vodka: $7.2 billion (flat from prior year)
    Tequila/mezcal: $6.7 billion (up 2.9%)
    American whiskey: $5.2 billion (down 1.8%)
    Cordials: $2.8 billion (down 3.6%)
    Premixed cocktails including spirits RTDs: $3.3 billion (up 16.5%)

    Premixed ready-to-drink cocktails grew double digits, but the category includes various types of mixed spirits including vodka, rum, whiskey and cordials.

    The Mexico tariff threat

    Mexican spirits and beer have grown more popular with consumers for over two decades, and tequila and mezcal sales outpaced American whiskey for the first time in 2023.
    The road ahead for the Mexico-based products remains uncertain. The Trump administration earlier this month delayed imposing tariffs on imports from Mexico — which would include distinctive products such as mezcal and tequila — by one month while tariff negotiations continue.
    “These tariffs have wreaked havoc on our craft distilling community,” said Sonat Birnecker Hart, president and founder of KOVAL Distillery in Chicago. “Many craft distillers have expended great time, effort and resources to expand into international markets only to see their dreams shattered by tariffs that have absolutely nothing to do with our industry,” Hart added.
    Swonger also noted that tariffs would be a “catastrophic blow” to distillers and only add to the pressure higher interest rates have put on the industry’s supply chain, as wholesalers and retailers continue to deplete inventory buildups and cautiously restock products.
    “Consumers were contending with some of the highest prices and interest rates in decades, which put a strain on their wallets and forced many to reduce spending on little luxuries like distilled spirits,” said Swonger. 
    “Our sales dipped slightly but consumers continued to choose spirits and enjoy a cocktail with family and friends,” he said.

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    Super Bowl 59 attracts record 127.7 million viewers

    Super Bowl 59 attracted a record audience of 127.7 million people, according to ratings agency Nielsen.
    The NFL’s big game this year was aired on Fox Corporation’s broadcast network. The company also made it available on its free, ad-supported streamer Tubi.
    Advertisers shelled out up to $8 million in hopes of getting in front of the biggest live audience on TV.

    Philadelphia Eagles head coach Nick Sirianni and quarterback Jalen Hurts celebrate with the Vince Lombardi Trophy after winning Super Bowl 59.
    Mike Segar | Reuters

    The Philadelphia Eagles weren’t the only ones that scored big at the Super Bowl.
    The National Football League’s championship game attracted a record 127.7 million viewers on Sunday, according to Nielsen Media Research.

    The supersized live audience was of most importance to the advertisers that shelled out big bucks to have their brands featured during the Super Bowl. It is rare that programming on live TV attracts such a big audience in one sitting, making the hefty price tag worth it, advertising industry executives recently told CNBC.
    The cost of advertising during the Super Bowl rises each year, especially as the cable bundle loses more and more customers and must-watch programming revolves around sports and other live events. This year, some brands spent up to $8 million for a spot during the game.
    Sunday’s Super Bowl aired on Fox Corporation’s broadcast network, as well as its Spanish-language cable network Fox Deportes and NBCUniversal’s Telemundo. Fox also offered the Super Bowl on its free, ad-supported streamer Tubi, and it was also available on the NFL’s digital properties.
    Last year, the Super Bowl had locked down another record at the time, when more than 123 million tuned into Paramount Global’s CBS broadcast network, TelevisaUnivision network and other streaming options such as Paramount+.
    Fox also reported that the Super Bowl broke another record when it came to streaming. The game on Tubi, Telemundo and the NFL’s digital offerings garnered 14.5 million viewers, while Tubi alone had 13.6 million viewers, according to Tubi first-party data and Adobe Analytics. This was the first time the Super Bowl was available on the app.

    The Super Bowl’s viewership peaked at an audience of 137.7 million from 8 p.m. to 8:15 p.m. ET, during the second quarter, according to Nielsen.
    Anticipation for the game helped boost viewership, too. Fox’s pregame coverage averaged 23.4 million viewers between 1 p.m. and kickoff.
    The Eagles ran away with the game against the Kansas City Chiefs, with a final score of 40-22. While viewership tends to drop off in games with a large gap in the score, viewers clearly stuck around through the game.
    The halftime show, headlined by rapper Kendrick Lamar and also featuring R&B artist SZA, had an average 133.5 million viewers across TV and digital platforms between 8:30 p.m. and 8:45 p.m. ET, up 3% from last year’s viewership of the music spectacle, Nielsen reported.
    The Spanish language networks Fox Deportes and Telemundo had an average audience of 1.87 million combined viewers, according to Fox. This was the first time the Super Bowl was offered on both a cable network and broadcaster in Spanish. The league has been pushing to expand its audience, with a key part of its strategy being Hispanic viewership.
    Disclosure: Comcast owns CNBC parent company NBCUniversal. 
    Correction: The headline on this story has been updated to correct that it was Super Bowl 59.

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