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There's a bit more to it than that, LC.
Russo never intended for the whole tournament scenario to go down. He was sick and tired of dealing with Hogan's politics, so he went along with the "storyline" to have Hogan drop the belt, and then went to the ring and did that shoot interview, which changed everything.
Hogan and Bishoff left the building right after the angle so as to put one over on the boys and make them believe that the whole thing was real. Russo double crossed them by making the whole thing really real, and Hogan never appeared in WCW again.
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