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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Good morning, and welcome to the Playmaker Capital Inc. Fourth Quarter Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Playmaker's Chief Operating Officer, Mr. Jake Cassaday. Please go ahead.
Thank you. Good morning. As mentioned, I'm Jake Cassaday, and I am joined today by our Chief Executive Officer, Jordan Gnat; and our Chief Financial Officer, Mike Cooke. Before we begin, I would like to remind you that today's call will include estimates and other forward-looking information from which our actual results could differ. Please review the cautionary language from last night's press release regarding various factors, assumptions and risks that could cause our actual results to differ.
Furthermore, during this call, we will refer to non-IFRS measures. These measures do not have any standardized meaning under IFRS, and our approach in calculating these measures may differ from that of other issuers and so these measures may not be directly comparable. Please see last night's press release for more information about these measures.
As a reminder, this conference call is being recorded and a replay will be available on Playmaker's website. An updated investor overview presentation is also now available on the website, inclusive of Q4 details discussed here. At this time, I would like to introduce Jordan Gnat, Chief Executive Officer of Playmaker.
Good morning, everyone, and welcome to our fourth quarter 2022 earnings call. Before I get into my remarks, a big shout-out to our family in Argentina on winning the World Cup. Jake and I just returned from Buenos Aires and the victory celebrations have not stopped. Okay, back to business. We are excited to share with you our fourth quarter and full year results. It was another strong quarter, and we are very pleased with the pace at which our teams have come together to level up the businesses that we have acquired and now make up Playmaker.
On this call last year, I talked about 3 key pillars of growth for the year, being organic growth, acquisitions and the realization of synergies. This year, we effectively delivered on all 3 and the results in our numbers on all metrics prove our team's ability to execute. We acquired some great businesses. And in 2022, we -- and 2022 was about turning them into market leaders. It was about building foundational teams and infrastructure that allowed us to scale up quickly.
2023 will be a year of focused optimization and a disciplined approach to accretive M&A, and I will turn to a discussion of that following Mike's remarks at the end of the call. You have heard me talk a lot about our team's focus on execution. In 2022, we executed at a very high level. Today, I'm excited to share with you the results of our fourth quarter and our full year 2022. Playmaker continues to deliver positive financial results. Our Q4 pro forma revenue of $19 million was 102% ahead of 2021 and pro forma adjusted EBITDA of $6.8 million was 96% ahead of 2021. Full year pro forma revenue of $47.4 million was 51% ahead of 2021 and adjusted EBITDA of $15.3 million with an increase of 36% over 2021. The results we generated during both Q4 and the full year were driven by our focus on creating an organization that can support continued growth across multiple geographies in multiple languages to service local, regional and global clients.
All of this with a keen focus on content. Our content is our lifeblood, and we continue to invest in producing the best content across all platforms and channels. On our Q2 and Q3 calls, we talked about the buildup of our teams and infrastructure to be prepared to deliver for our clients during Q4 and the World Cup. This investment certainly paid off. During Q4, the FIFA World Cup 2022 accelerated engagement across Playmaker's platforms and geographies, generating above-trend financial results as we would expect for these very important but infrequent global events.
During the World Cup, we executed over 300 direct campaigns across Canada, the U.S. and Latin America and executed some of the best creative I have seen our team deliver. Our teams truly collaborated on a new level. They combined resources, they shared talent, and most importantly, we created campaigns for top-tier clients across multiple brands. At Futbol Sites alone, we generated 196 million video views and 525 million social media interactions during the World Cup. We were prepared, and we delivered for our clients. Our multichannel approach continues to engage our fans at scale.
In Q4, our web properties had a monthly high of approximately 100 million users, up 18% from 2021 and generated over 620 million sessions in the quarter, an increase of 27% over 2021. In total, our web properties generated 2.6 billion user sessions for the year, an increase of 45% over 2021. Our social media assets now have 175 million followers across all major platforms, with a growing focus on vertical video content for our Instagram, TikTok and YouTube shorts followers. We saw our audio/video podcast portfolio grow to over 25 shows with more than 820,000 streams per month, and our YouTube channels continued to deliver incredible scale with over 600 million YouTube views in 2022.
A couple of particularly outstanding achievements at the property level to highlight. The first is Yardbarker, which we acquired in July 2021. At the time of acquisition, the web property was averaging approximately 8 million sessions per month. As of December 2022, Yardbarker is now delivering over 20 million sessions per month. The second is World Soccer Talk, which we acquired in July 2022. This was very strategic for us as we continued to look to be the leading independent voice of soccer in the Americas. World Soccer Talk increased web sessions and users 310% and 290%, respectively, during World Cup 2022 over World Cup 2018.
With all of this, Playmaker ranks as the seventh largest digital sports company across the Americas. We are #1 in Latin America, top 20 in the U.S. and top 15 in Canada. We are just 2 years old. During Q4, we continued to sharpen our focus on higher-valued direct sales, working closely with media agencies and directly with brands. Direct sales in Q4 2022 were up 100% over 2021 and accounted for 60% of core media advertising revenue.
The fastest-growing segment for direct sales has been iGaming and sports betting. Direct sales from this segment grew over 200% in Q4 2022 versus 2021, and this accounted for approximately 45% of direct sales in the quarter. This is very consistent with the strategy we laid out 2 years ago when we launched Playmaker. We are focused on the newly regulating sports betting and iGaming markets with a hard-to-match scale of highly engaged sports fans across this very important region.
In Q4, we executed on our plan to acquire a meaningful affiliate business. The acquisition of Wedge in October has given us a new platform business and expertise. At the time of the acquisition, we were clear that the integration of the Wedge team and skill set will begin in earnest in Q2 and Q3 of 2023 preparing for the Q4 sports calendar as Q4 and Q1 tend to be the 2 biggest quarters for the affiliate channel.
The integration planning is on track, and we expect to see the first meaningful impact during this year's fall sports season and in Q1 2024. A key part of any successful M&A strategy is knowing what is not working or does not fit in and acting on it quickly. To that end, we have made the decision that the [indiscernible] operation is no longer core to our overall strategy, and we are actively pursuing several disposition opportunities.
Our teams hit it out of the park in 2022. I am proud of our performance and look forward to continued execution this year. I'll turn the call over to Mike to discuss our financial results in more detail and then come back to touch on our focus for the business during 2023.
Thanks, Jordan. Good morning, everyone, and thank you for joining us today. Last night, we reported our results for the quarter and year ended December 31, 2022. As a reminder, we report our financial results in U.S. dollars. Including the results of our acquisitions to date on a pro forma basis, revenue was $19 million in Q4 2022 compared to $9.4 million in Q4 of 2021, an increase of $9.6 million or 102%.
For the full year of 2022, pro forma revenue was $47.4 million compared to $31.4 million in 2021, an increase of $16 million or 51%. We used adjusted EBITDA as a key measure of earnings. Adjusted EBITDA is intended to present the results of our operating segments, so it excludes any onetime costs and head office costs incurred within our corporate segment.
Pro forma adjusted EBITDA increased to $6.8 million in Q4 2022 from $3.5 million in Q4 2021, an increase of $3.3 million or 96%. For the full year of 2022, pro forma adjusted EBITDA was 19 -- sorry, was $15.3 million compared to $11.3 million in 2021, an increase of $4 million or 36%. On an IFRS basis, we produced $18.7 million of revenue and $3.1 million of operating income in Q4 2022.
In Q4 of 2021, the company produced $7 million of revenue and $0.5 million of operating income. It should be noted that the $3.1 million of operating income in Q4 2022 includes $2.1 million of noncash expenses relating to amortization and stock-based compensation. We finished Q4 with cash of $8.9 million and $10 million of available debt. We believe that available capital, combined with the fact that we produced positive operating income and adjusted EBITDA, gives us sufficient resources to settle our existing obligations as they come due and to continue investing in profitable growth.
I will now turn it back over to Jordan as we near the end of our call.
Thanks, Mike. Since its public listing, Playmaker has executed 15 strategic acquisitions that have brought hundreds of incredibly talented teammates, exciting products and numerous areas of expertise into the Playmaker ecosystem. Thanks to the efforts of the Playmaker team over the past 12 months to integrate these complementary entities and drive growth.
For the year ahead, our primary focus will be on leveraging integration opportunities across our ecosystem with the goal of finally tuning a multiyear growth engine that will enable us to deliver for our clients, generate returns for our shareholders and provide our fans the best content when they want it, where they want it and how they want it.
While we continue to assess acquisition opportunities across geographies and platforms, we see a substantial opportunity within our current platforms to accelerate cross-brand collaboration, integration and optimization and innovation, which will drive scale advantages and enduring profitable growth. We have built a diversified ecosystem of media and affiliate brands, and we firmly believe we have the right pieces in place to further enhance operational efficiencies and level up from within.
There are 4 key areas our team will focus on for 2023. The first is cross-brand collaboration. Under this heading, we will be -- we will concentrate on enhancing cross-brand communication opportunities, increasing content syndication to third-party channels across the Playmaker ecosystem and leveling up our overall affiliate business. The second key focus area will be integration and optimization. This is where we will leverage technology and intelligence to inform content distribution and increase RPMs and establish additional centers of excellence around key knowledge bases and skills to leverage for the entire organization.
The third key focus will be on innovation with a specific commitment to broadening our product and channel mix. Fourth, we will leverage our scale to drive sustainable growth. We plan to achieve success against this key objective primarily by driving increased direct sales by better leveraging the company's global brand partners and growing our roster of local and global Tier 1 partners.
Our accomplishments in 2022 have positioned Playmaker to continue to grow organically and via M&A in 2023. Shaquille O'Neal said that excellence is not a single act but a habit. You are what you do repeatedly. 2023 is about our pursuit of excellence across our organization. I want to conclude by expressing my deepest appreciation to our team and to those who continue to support our company each and every day.
To say we have come a long way is an understatement. Our focus on the sports fan has to date proven to be the right bet and will enable us to continue bucking some of the challenging macro conditions that are hitting other ad-focused models. We have been very strategic about the geographies we have chosen to focus on to date, and those geographies have proven to be the right bets. And a focus on profitability will always be the right way to orient our business.
I am truly humbled by the performance of our teams. The dedication and focus is infectious and because of the collaboration within the company, that dedication and feeling of belonging has spread far, wide and deep. People feel like they belong and that is the greatest thing. To the Playmaker family, be very proud of what we have accomplished and be excited about what we will accomplish going forward. Operator, you can now go ahead and open the line for questions.
[Operator Instructions] And the first question will come from Matthew Lee with Canaccord.
First, I'd like to ask a question about the impact of World Cup on the company's financials. If I consider your $19 million in revenue this quarter, can you tell me how much is directly tied to the World Cup versus being replicable in quarters going forward?
Yes. Thanks, Matt. Appreciate the question. Mike here. I think the best way to think about that is you try to normalize Q4 and think about the effect of World Cup. If you look at the 4 quarters that we had prior to Q4, the highest quarterly growth rate that we had year-over-year in any of those quarters was 58%. Had we only repeated that growth rate in Q4 this year, we would have been in the neighborhood of $4 million lower on revenue, probably just under $15 million for the quarter. And so I think if you try to isolate what the World Cup impact was and normalized for that, I think that's probably the best way to think about it.
And just a quick addition to that, Matt. I think -- as Mike laid out, the revenue impact, I think there's also longer-term positive impact that we take away from a major event like that. As we've documented, we did over 300 campaigns during World Cup with top brands like adidas, Uber, Betfair, Verizon. These are done with major brands and agencies, and it's incredibly important for us to continue to level up our perception within those agencies and leverage that place with them to continue to grow those businesses.
And we've seen this happen in previous World Cups, where we've been able to level up with these agencies and bear the fruit of that over the years. And this year, with the level of execution we had around direct campaigns, we expect that, that will continue to drive significant results as it relates to our direct sales.
All right. Great. That's helpful. And then maybe in terms of Wedge, revenue in the quarter was $6 million, which is very impressive and above our numbers. Can you maybe help us understand the opportunity you're seeing to grow that business, given continued utilization in the U.S.? And maybe also some color on the seasonality of that business and how it pictured the current assets?
Sure. That's a great question. Thanks, Matt. So firstly, I'll tackle the seasonality of it. So the affiliate business is really a business that predominantly sees its spikes in Q4 and Q1. When we acquired Wedge, we sort of talked about the change of the seasonality of Playmaker with now having a strong affiliate business going from sort of a slope from Q1 to Q4 from bottom to top to now having a very strong Q4 and a strong Q1, and the seasonality is based around the North American sports season.
You have -- you pretty much have -- you have NFL, NBA and NHL that moves from the fall all the way through to sort of the Q2. So halfway through Q2, you start seeing the playoffs and that's when the affiliate business begins to tail off. So Q2 and Q3 are the weaker 2 quarters for affiliates. And Q1 and Q4 are the 2 stronger quarters.
The affiliate business also has -- every so often it gets a spike in it when you have new jurisdictions that launch. If you imagine the affiliate business core -- at its core is the ability to deliver new customers to sports betting and iGaming operators. When you get a new state launch or a new province launch or a new jurisdiction becoming regulated, you have to go on the assumption that there are currently no customers and now all those customers need to sign up. So it's the initial land grab gives you a nice bump.
In Q4, you had Maryland launch. In Q1, you have Ohio launch at the beginning of the quarter, and you have Massachusetts launching towards the end of the quarter. So those give you an indication of when those things happen that you get a nice little bump in those quarters. And then what you have is a new base business that has more population to draw from where more and more people will continue to sign up. So it's not just a onetime bump. It's a -- yes, you get a onetime bump in terms of revenue for a short period, but then you have a new base upon which to continue to draw from.
The next question will come from Rob Goff with Echelon.
Huge congratulations to yourselves and across the broader team on like [indiscernible] quarter clearly.
Thanks, Rob.
Perhaps looking forward, like we're getting some mixed signals in terms of the economy that suggests caution, but yet the March Madness is setting records. How might we look at the organic growth as it relates to the market demand?
Yes. Thanks, Rob. Yes, I mean, listen, as we've stated in the past, we do not believe we are immune to any kind of macro forces or headwinds that are out there in the markets. And we're, of course, watching incredibly close. In the macro markets, we're hearing the marketing budgets that may have been slightly delayed in early Q1 are beginning to unlock. We're looking at a lot of the commentary from large DSP and SSP players such as the Trade Desk or Magnite that have been reporting the lows that we've seen in early January are likely behind us.
But this is something, like I said, that we are watching incredibly closely. On our end, specifically, we've continued to see typical seasonality trends sequentially from Q4 to Q1 on our programmatic business with the strength of our direct sales in core markets. But we do believe that we are indeed uniquely positioned to remain strong in any environment, and that's really driven by 3 factors that we continue to come back to.
And it's -- as you alluded to, Rob, the fact that we are super serving the sports fan is something that we are incredibly thankful for the discipline that we've shown towards that focus. The sports market is as vibrant as it ever has been, and sports fans are as valuable as they ever have been. As you pointed to, we're now seeing numbers north of roughly $1.25 billion in terms of March Madness TV ad dollars, that is breaking records.
We see the global media rights have gone from $52 billion in 2018 to $55 billion this year to $62 billion projected by 2026, and sports betting continues to roll out across our market. So the sports fan is more valuable today than it was yesterday and will be more valuable tomorrow than it is today, and it is a highly coveted audience with advertisers. And we also have had a huge focus on ensuring that all of our programmatic is done in-house.
As you know, all of our web properties are on the same tech stack with our bench team. And we're constantly reviewing, optimizing, playing with our ad layouts, looking at ad density. We recently rolled out a new video player across all of our properties that's giving us much improved economics and the ability to sell directly on pre-roll.
And even in the case of the Nationwide Network, pre-roll on our own content, it's an opportunity for us to showcase our own content. And then just thirdly is our investment in direct sales. We reported some very significant gains in our direct sales activity. 60% of our core media ad sales came from direct sales in the quarter, which is 100% increase year-over-year and we've seen a 200% increase in our sports betting and iGaming revenue in direct sales. So we are -- just to sum up, we're watching closely. We do not believe we're immune. We're incredibly addicted to looking at the data and ensuring that if anything were to happen from a trends perspective, we're right on top of it, and we do what we can to optimize against those trends. But it's really our focus on the sports fan, the in-house management of programmatic and our investment in direct sales that we feel positions us to weather any potential storm that we may see.
Great. And if I may, I have a follow-up. Wedge was already referenced, but can you talk to the exceptional growth coming out of Yardbarker?
Yes, absolutely. Yes, it's a great point. And in our latest presentation, and Jordan alluded to it in the opening remarks too, that when we first acquired Yardbarker, the business was doing roughly 8 million sessions a month. We're now seeing that consistently well over 20 million. In Q4 of 2022, we saw an 86% growth year-over-year versus Q4 2021. And that is really and thanks to a lot of the integration and collaborative efforts that we put in place here at Playmaker, there is definitely a Playmaker effect at play.
We were able to launch a growth plan at Yardbarker that was really an investment in new writers and content, and we're able to do that with ROI at its core. We invested in software that allowed us to track in real time the performance of a given piece of content, the revenue that it was generating by author, by topic and other taxonomy related to that content. So that when we make an investment in something that's going to grow our top line, we know we can do it profitably as well.
So Yardbarker in a market like the U.S. in a hypercompetitive environment around NFL coverage to break through that noise and as meaningful a way as Yardbarker has is a true testament to the collaborative efforts of these teams and the way that we're thinking about growing these businesses.
The next question will come from Gianluca Tucci with Haywood Securities.
Congrats on an exceptional quarter.
Thanks, Gianluca.
Just on Wedge, super impressive growth that they are considering that they almost did the trailing 12 months performance in Q4. So you had Maryland open up their market in Q4 and Q1, Ohio and Massachusetts. Is it fair to say that you're seeing an even bigger step function there in Q1 of '23 compared to Q4 of '22?
I wouldn't say -- I wouldn't sort of say would be bigger than Q4 because you also have -- in Q4, you had World Cup, which was net new audience for a lot of the sports betting operators because you had just a soccer fan group that previously perhaps wasn't betting, but wanted to get into World Cup. You also had a whole bunch of new clients for these betting operators that wanted to come on board because it was a way to engage with their friends, et cetera, to as more social activities around it.
And you also have the NFL playoffs and leading into the NFL playoffs, which traditionally is a very, very strong pace. So you have all November, all December with Maryland launch plus leading into World Cup. In Q1, what you have is that you have January really intel the Super Bowl, right? And then that's really the NFL season.
So it's a -- the calendar is actually a smaller calendar. But with that all said, the Ohio launch, I think you've heard from other affiliates who have put out numbers in the market have said that Ohio launch was a strong launch and we would agree with the Ohio launch was a strong launch. Massachusetts just 1.5 weeks into it. But March Madness has certainly had from an audience perspective an incredible amount of audience for us.
Great color, yes. I'm ecstatic about the opportunity there at Wedge. And on the M&A front, it sounds like M&A might take a backseat to integration efforts at least in the first half of the year on the Wedge integration efforts. What's the capacity like on the M&A front as integration occurs? And are you focused on the affiliate side or on the digital media side for incremental M&A opportunities?
Yes. That's a great question. So M&A is in the DNA of the business. I mean, we are a rollout. So we are always looking for opportunities. The difference now versus when we started is having the base that we do allows us to really be laser-focused on gaps to fill. So gaps to fill for us would be new geographies, places where we currently don't have an active portfolio piece that would be helpful.
So if you take a look at Canada as an example, we're the Nation Network in Canada. We don't have a core property in the province of Quebec as an example. So if we found something in Quebec, that would be something that would obviously round out a Canadian portfolio. We look in other geographies where our playbook includes things like fan sites, social and web properties. We have some large geographies where we don't have that sort of 3-legged stool.
So in those cases, we would like to find sort of the third leg of the stool in order to solidify positioning. So I would call those more sort of bolt-on tuck-in type of acquisitions things we can do quickly as we've proven and become immediately accretive. And we have absolutely the capacity to bring those in and absorb them simply.
The desired M&A, I would say, and I've said this on a few different calls, is if we could get -- there's no such thing as too much U.S. audience. That's really -- the U.S. audience is the most valuable audience from an advertising perspective, betting operator as well as just Tier 1 advertisers. So if we could find another Yardbarker that we could acquire at the same level of discipline that we've done to date, then that would be hugely valuable to us. And ultimately, we talk often about transformative. And we are always looking at things that could transform this business from where we are today into something even more special. And those are always, always discussions that we keep ourselves in.
Great color. Just lastly from our end here. Can you give us an update to what you're seeing down in Brazil and the market activity in that region?
Yes, Brazil, you have over 200 million people, it's a market that people tend to overlook. I would say that the sports betting operators are absolutely laser-focused on that market. The number of partnerships and campaigns and advertisers that we have signed up in the last year relative to the year before has been unbelievable growth, and we're seeing that continue.
The market in terms of regulation, the government is moving now where they missed their window at the end of December, they're moving now to open up the market with a regulated -- in a regulated way. But as it's a gray market, we are continuing to participate as an advertiser -- advertising vehicle for advertisers in the market.
The next question will come from Adhir Kadve with Eight Capital.
Let me add my congratulations on the quarter. Well done to you guys and the team.
Thank you.
Just on -- so you guys kind of touched on this a little bit. But just on the World Cup as a customer acquisition tool for Playmaker, you guys mentioned 300 activations, lots of momentum in that area. Is it fair to kind of talk -- is it fair to say that a lot of those clients were net new and you expect a lot of these clients that you added during the World Cup would potentially increase spending with you guys, given the ROI that they potentially saw with some of the campaigns during the World Cup?
Yes. I think it's a fair thing to say, for sure, Adhir. I think that in a lot of cases, we had existing relationships with some agencies and pan-regional deals or within Canada or across other parts of Latin America. And this was a chance for us to really sort of step up and improve that we can drive significant engagement and activation of major campaigns.
In a lot of the cases, with direct brands, specifically on the sports betting side, a lot of these were net new relationships where people looked at us as the sort of quantified de facto leader, particularly in Latin America around soccer. And if you want to get a message out to soccer fans around World Cup, you know that the people engaging with our products, be it web, social audio/video or diehard soccer fans. So I think we've proven an ability to execute it on a very high level there, and our engagement rates around those campaigns are a testament to that.
And it really is about leveling up, whether it's an existing agency that we continue to demonstrate our value or a net new, those are both significant value drivers for our overall direct sales organization. And something that we're going to be leveraging across all of Playmaker. We're working hard to centralize our direct sales and ensure that a regional deal that might be getting done in Brazil with a major ad agency like a Publicist is getting shared with our team here in Canada so that we can leverage those relationships and drive greater cross Playmaker direct sales. And that's still sort of early days of integration, but overall, World Cup is a significant catalyst to how we're going to be working with agencies and brands.
Excellent. That's good to hear. Maybe for my second question is, you're going to drive strong performance of affiliates in North America with the Wedge business, but maybe too early to be thinking about this. But maybe how would you kind of leverage Wedge as you kind of think about South America? Maybe talk about that business and how you leverage yourself there?
Yes. I think, Adhir, you're spot on in terms of Latin America. When we talk about the integration of Wedge, the integration of Wedge for us is across all geographies. The question just earlier was on Brazil, what do you think about the Brazil market. It's 200 million people, and they are absolutely engaged in this activity. And we know from others who are participating in that market that there is a huge opportunity for affiliate in Brazil. And if we can do that internally rather than being the place where other affiliates are currently buying our traffic, we would love to be able to do that using our own traffic rather than wholesaling it to somebody else.
And that's one of the key strategies that when we bought Wedge we could see what others were doing with our traffic. We speak to our clients, and our clients tell us how well our sites convert players to become sports betters. So if we have all this research that we've done in advance of the acquisition of Wedge, it really plays into our strategy that if we can do this in-house, we can really level up by, I think, what we describe as we are going to be trading CPMs that we're getting today, a cost per thousand; for a CPA, a cost per acquisition which on a pure economic basis, is a far, far greater revenue generator for us.
As we've shown in our previous decks, you see our pyramid where programmatic and direct sales sit at the bottom of the pyramid in terms of revenue generation, direct-to-consumer and affiliate sit at the top. And affiliate is the top of the -- you can say at the bottom of the funnel, the most valuable or the top of the pyramid, the most valuable. It depends how you look at it. But for us, it is the most valuable part and ultimately, where we want to be driving. So when you think affiliate for us, think across the Americas, not just the U.S.
Fair enough. And maybe one last one from me. How are you guys kind of thinking about the podcast angle? You guys obviously have a significant podcast business. How are you thinking about kind of monetizing that in 2023? And any additional color on that area?
Yes. Yes, I really think it's a continuation of the same playbook, Adhir. As we've stated in the past, we saw a real opportunity with the video podcast group that the Nation Network had built up relatively organically over 2022. And really just leading into the NHL season, we saw a real opportunity to invest significantly. We added several new shows, several new leading talent in markets like Calgary, Ottawa.
And as we stated in the past, we did it profitably. In each of those cases, we went out and we presold it with both local and national advertisers so that we knew as soon as we hit record on that first show, we were generating positive EBITDA from those shows. And I think that's going to continue.
That playbook is, like Jordan said, is our DNA. And we will continue to see how we can leverage those learnings across other markets as well. We are actively exploring new video podcast opportunities in other parts of our universe, including Latin America, where we have great talent, we've got great audience. And so -- I think, as we continue, we're going to look to add more shows. We're going to look to bring in net new advertisers that really want to anchor around these shows because it is a truly unique and differentiated piece of content that advertisers really want to be a part of. And of course, we're going to do it profitably.
The next question will come from David McFadden with Cormark Securities.
A couple of questions. So when I look at the affiliate revenue of $5.7 million, obviously quite strong. I was just wondering, would you be able to disclose us what the Q4 '21 revenue was for Wedge because I'm just trying to understand how much of that bump was purely World Cup versus just ongoing iGaming expansion?
Yes. We haven't done that. We haven't disclosed that.
Okay. Okay. Because just for modeling purposes, we want to make sure we're not -- we're trying to get it right. Anyways. Then the other question is for Ohio. I know it launched in early January. But when you have benefited from Ohio operators who are getting ready to launch and starting to advertise or trying to acquire customers?
In Q4?
Yes.
So it's actually funny. In Q4, it would be a cost. So what you're doing in Q4 is you're signing up. You're signing up in advance, but you only get -- the affiliate pay only kicks in when they actually deposit and bet. So the way it works is the operators premarket. So over the course of December, we would have had an internal cost to drive traffic to sign-ups, but those would actually become revenue when the CPA actually kicks in, in the month of January.
So yes, we have this prelaunch period where you get sign-ups and then you go post. But one thing to consider too on your previous question when you're sort of thinking about the year-over-year, you also had a Maryland launch. It wasn't just World Cup. You had Maryland launching in Q4 of this year.
Yes. So would your sports properties benefit as well from iGaming operators advertising on your site as these states go live?
Yes, for sure, for sure. You see that in something like in the Yardbarker and Bola, you see that on Nation Network. All those operators, as we talk about the direct campaigns and sports betting operators, that is really about us getting them to understand that our audience is the right audience for them.
Yes. So to my earlier question, then the digital media would have probably benefited from Ohio launching in early January because guys would have been advertising in December for the prelaunch, no?
Yes. I think that's fair to say, but in a smaller way because in the U.S., the market is -- the market for advertisers in the U.S., their big spends are either affiliate, which we participate in; broadcast television, which we do not participate in. So you'll see a lot of broadcast television that they do. They do programmatic buying. So there is a lot of programmatic that goes on, which we do participate in.
And then they do podcast -- a lot of podcasting and video spend, which in the U.S. market today, we do not have a strong podcasts. Those are all opportunities for us as we continue to build audience around Yardbarker. So when we talk about the importance of U.S. audience, we've gone from 8 million to over 20 million sessions in Yardbarker. As that property continues to grow in relevance as it has, then the betting operators continue to see the value that we can drive for them, and that will help level up that business even more than it has so far. So lots of opportunity, lots of runway still available in those markets for us.
Okay. And then are you aware of any other reasonably sized states that are going to go live from iGaming, say, in the next 6 months in the U.S.?
So there's nothing that's sort of in the calendar yet. There's lots of conversations around Kentucky, North Carolina are sort of 2 that are -- have bills moving through right now. Texas is -- Texas keeps talking about it, but you never know. That's probably the single biggest one that has a possibility, but it's hard to know until it gets through the legislation. And Texas just -- it's complicated, but all the winds are blowing in the right direction.
On the other one, the other sort of dark horse there is Florida. Florida had sports betting. There was a legal case brought that stopped sports betting. And whatever is happening behind the scenes and the negotiations between the commercial operators, the seminals and the state. However, that ends up getting settled, that could unlock the state of Florida in a meaningful way and again, another huge geography.
The other state is Georgia. Georgia is, again, a bit of a 2023 dark horse, but it could be 2024. Georgia is another massive, massive state. And some of the things to look at when you think about the opportunities, it's not just a net new state. It's what states also begin to adopt iCasino. So there's talk right now in New York. If New York brings on iCasino, that's a massive opportunity of driving more traffic for affiliate business. So I would look at -- as you're sort of following the news, those are the 2 things to follow. Net new openings, but also expansion of the existing product set that you see in a particular state.
Okay. And then just on the contingent consideration, given clearly, Wedge is putting up some pretty strong numbers here. What is the likelihood that contingent consideration for Wedge could be greater than what's reflected on the balance sheet?
Well, I think what's reflected on the balance sheet, we always have to fair value it. And so what we show on that -- on the sheet at December 31 is based on everything we expect at that time. And so it bakes in the results of Q4 and all that. So it can always vary obviously. But at end of quarter, the numbers we show are based on all of the information we had at that point.
The next question will come from Max [indiscernible] Partners.
Congrats on the great quarter.
Thanks, Max.
I've got three questions here. So in terms of content arbitrage, right, you're serving a wide audience. You're able to produce content in certain areas. How much of this do you see driving EBITDA margins moving forward? You mentioned it's one of your pillars for 2023 across integration. Can you speak to that a little bit?
Did you say content arbitrage or COGS arbitrage?
Content. Sorry, content.
So yes, so the reference is syndication. Yes, I think that there is net new opportunity there as we've alluded to. The great thing about syndication in most cases, it comes at a very high margin, sometimes 100% margin. And it's not just written content. We have lots of examples of our syndication out to third parties for a written content, both with Yardbarker and with some of the Futbol Sites brands to sites like Google News, Apple News, MSN, et cetera.
It's also of interest in our video properties, too. We are now producing just in Canada, 5 hours -- north of 5 hours of live hockey content every single day as well as soccer content that's highly differentiated with great talent. And so there's syndication opportunities that come at very high margin across each of our product lines. So I think you're right to point it out, I think there is opportunity there and it's something that we're going to be really chasing down this year.
Perfect. In terms of Tier 1 advertisers, we saw a lot of mention of really good brand names that we're partnering with you guys for ads. Do you see this continuing indefinitely? Have you built that relationship to the point where they can now see that you guys are a valuable platform to bring what they're looking for?
We do. And not a lot to add here, Max. I think the key that I would just add on is that it's still early days. We've got a great sales team that's been developed out of Futbol Sites that's led by a CRO there that has been building these relationships with agencies for several years. And again, World Cup was just another way for us to really level up and increase the way that those groups perceive us and our ability to drive value for them and for their brands.
In the case of North America, we're really just getting started. Our Head of Partnerships of North America, Adam Seaborn has not been with the company a year and has done a tremendous drop driving direct sales in the Canadian market. I think where we have real opportunity to continue to level up is in the U.S., and that's an active plan as well. So I think it's early days, but we have proven an ability to execute with agencies across each of the regions we operate in. And those relationships, as I've mentioned earlier in the call, will continue to pay dividends for us.
Perfect. And then lastly here, the EBITDA margins, I would expect would be better in Q1 and Q4. Can you give us some insight into what we should expect maybe Q2 and Q3 where there aren't many championships and maybe volumes are a little bit down?
Yes. I think you're absolutely right. Q1 and Q4, the Wedge business is a very high margin -- very high EBITDA margin business. So you get the benefit of that in those 2 quarters. And then I think you would see in Q2 and Q3 that without there being a strong affiliate. So in the affiliate business sort of begins to wind down a bit in Q2 and then in Q3. So you don't have the benefit of that higher margin, but the blended -- we expect the blended margins for -- the blended margins that you see in 2022 to continue through 2023 by the end of the year. We don't see any reason why that would change in any meaningful way.
This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Jake Cassaday.
Thank you very much. As there are no further questions at this time, this concludes today's call. We, of course, thank you for your interest and your support in Playmaker and for your participation in today's call. You may now disconnect. Thanks very much.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.