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In my Premiere Pro CS6 sequence, I have a centered video clip with an image overlaid on top of it. I'm able to reposition the image just fine by double clicking it and then dragging it around.

When I try to do the same to the video clip, however, it won't even select, let alone move around. I've tried making a new sequence (both preset and custom), I've hid the other video lines in the sequence so only the line with this clip is shown, and I've even tried deleting all the non-video items on the sequence.

The video clip I'm trying to reposition has been split into three separate clips with the Cutting Tool and then Grouped back together (I had to remove a few seconds of audio when someone's phone rang).

How can I fix this issue so that my video can be repositioned within the frame?

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The video clip I'm trying to reposition has been split into three separate clips with the Cutting Tool and then Grouped together.

This is the key to your problem (emphasis mine).

In Premiere Pro, you cannot move a video clip around within the frame in your Program Monitor view if it has been grouped together with other timeline objects. The application would have to reposition each grouped item with relation to the clip you are trying to select and reposition. This kind of chained action simply isn't supported, so it just prevents you from selecting the clip within the Program Monitor to begin with.

You will have to select each of the grouped video clips on your Timeline, Ctrl-Click to bring up the context menu, and then select Ungroup:

Ungroup option in the context menu

You will then be able to reposition your video clips within the frame. You can re-Group the video clips when you are finished, if you like.

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