WWE Forward‐Looking Statements
This news release contains forward‐looking statements pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties. These risks and uncertainties include, without limitation, risks relating to maintaining and renewing key agreements, including television distribution agreements; the need for continually developing creative and entertaining programming; the continued importance of key performers and the services of Vincen t MMhMcMahon; theconditions of themarktkets inwhic h we competeand acceptance of the Company's brands, media and merchandise within those markets; our exposure to bad debt risk; uncertainties relating to regulatory and litigation matters; risks resulting from the highly competitive nature of our markets; uncertainties associated with international markets; the importance of protecting our intellectual property and complying with the intellectual property rights of others; risks associated with producing and travelling to and from our large live events, both domestically and internationally; the risk of accidents or injuries during our physically demanding events; risks relating to our film business and any new business initiative which we may undertake; risks relating to the large number of shares of common stock controlled by members of the McMahon family and the possibility of the sale of their stock by the McMahons or the perception of the possibility of such sales; the relatively small public float of our stock; and other risks and factors set forth from time to time in Company filings with the Securities and Exchange Commission. Actual results could differ materially from those currently expected or anticipated. In addition, our dividend is significant and is dependent on a number of factors, including, among other things, our liquidity and historical and projected cash flow, strategic plan (including alternative uses of capital), our financial results and condition, contractual and legal restrictions on the payment of dividends, general economic and competitive conditions and such other factors as our Board of Directors may consider relevant, including a waiver by the McMahon family of a portion of the dividends which has now expired. Any new dividend waiver is subject to two things. The first is the receipt of the approval of the Internal Revenue Service, which has been obtained. The second is the agreement of members of the McMahon family. No determination has been made by the McMahon family to enter into a new waiver agreement. Presentation also includes information regarding the historical financial performance of WWE, including performance as reflected in non‐GAAP financial measures, such as Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA). Please note that a schedule setting out the reconciliation of this measure to net income, a comparable GAAP financial measure, is included on the Company’ s Web site at www.corporate.wwe.com/investors and is also included in Company’ s SEC filings, which can also be accessed at the Company’s Web site.
2 Compelling Investment
Core Competencies: •Content creation •Marketing • Distribution 9 Attractive long‐term growth: – Strengthening global television distribution – Exploiting new licensing Diversified businesses: agreements •Platform – Disciplined cost management • Geography and operating efficiency 9 Further opportunities for growth: •International Expansion Financial strength: •WWE Network • Operating leverage •Low capital requirements
3 Core Competencies
•Content creation –Proven track record with over 25 years of history – Deliver original content 52 weeks a year to a global audience – Family‐friendly, PG content across all of its platforms – WWE has 2 of the top 5 longest running weekly episodic TV shows by total number of episodes •Marketing – Driving pop culture –Mainstream media – The Apprentice, Dancing with the Stars, The View, The TdToday Show and PjtProject Runway – Celebrity guest hosts –Donald Trump, Shaquille O’ Neal, Nicole Scherzinger, Mickey Rourke and Jeremy Piven • Distribution –Broadcast in more than 145 countries and 30 languages and reaches more than 500 million homes worldwide –14 million viewers in the U.S. each week – 13 million online monthly unique visitors
4 Core Competencies
• WWE brands cultivate a passionate global audience and are viewed more than basketball, baseball and hockey (regular season)
Average Viewers per Regular Season Cable Telecast
6000 5552
5000
4000 (000s) 3493
2+
ee 3000 Ag
2000 1632 1361 1313 Viewers 1000 300 0
5 Core Competencies
• “WWE Fan for Life” •Multi‐generational product with diverse audience base starts with WWE Kids •Broad audience where 35% of our viewers are female and 78% of •PG TV Programming the audience over the age of 18 drives sponsorships • 61.8% Caucasian, 21.0% African‐American and 22.1% Hispanic Origin
Age Distribution Gender Distribution
22% 30% 35.0%
23% 65.0% 25%
<18 18‐34 35‐49 50+ Male Female
6 Diversified business: Platform
•Leveraging content across multiple platforms to generate revenue
Films/Other Digital Media
Live Events
Consumer PdProducts
Pay‐Per‐View Telev ision
*2010 revenue breakdown shown 7 International Revenue: Platform
•Key sources of •The Company continues to build and/or upgrade its global TV international growth are TV rights and presence –key to cultivating audience over time and developing licensing other revenue streams
160.0 2006‐2008 CAGR: +14.9% 135.2 140.0 127.1 135.2 1.2 5.0 119.3 2.8 120.0 1.3 34.5 102.4 27.2 31.4 100.0 1.4 27.2 20.3 11.7 millions) 17.7 14.8 80.0 17.7 in 19.5 37.2 39.0 45.4 llars 60.0 32.8 oo 30.6 (D 40.0 44.6 43.3 41.7 20.0 30.6 40.3 0.0 2006 2007 2008 2009 2010 Year
Live Events (Includes Venue Merch) Tel ev i s i on Pay‐per‐view (Includes WWE Classics On Demand) Consumer Products Digital Media/Other
8 International Revenue: Region
• Approximately 25% • Revenue from outside the U.S. grew at an average of 18% per year of the Company’s revenue is generated (2003‐2008) from international sources • Established markets 160.0 2006‐2008 CAGR: +14.9% include UK, France 135.2 135.2 140.0 127.1 6.5 •Developing 119.3 19.4 120.0 3.8 12.5 presence in Mexico, 102.4 34.4 India and China 100.0 3.2 30.6 32.1 35.6 millions) 80.0 30.4 in
•Top Markets: s rr EMEA 60.0
UK, France and (Dolla 94.3 40.0 84.9 82.5 80.2 Germany 68.8 APAC 20.0 Australia, India, Japan 0.0 and South Korea 2006 2007 2008 2009 2010 Latin America Year Mexico Europe, Middle East & Africa (EMEA) Asia Pacific (APAC) Latin America
9 Financial strength
•High operating •In 2009, WWE delivered an 11% increase in earnings and improved leverage operating margins from 16% to 19% despite a challenging economy •Low maintenance capital requirements • Also as part of its heightened sense of fiscal discipline, the Company reduced its cost base by more than $20 million Revenue ($ millions)
600 526.5 485.7 477.7 500 475.2 377.9 415.3 Capitalize on growth opportunities . . . 400 300 200 100 0 EBITDA margin (%) 2000 2006 2007 2008 2009 2010 2012 25.0% 23.1% 20.0% 19.7% 17.9% 19.3% 15.0% 16.0% 15.8% With enhanced financial discipline . . . 10.0% 5.0% 0.0% 2000 2006 2007 2008 2009 2010 2012
Note: 2000 financials are as reported 10 Financial strength
Operating Capital Revenue1 ($ M) Profit Margin1 (%) Growth Risk Leverage Intensity
Live Events 104.6 26.2
Television 127.0 45.1
Pay‐Per‐View 70.2 56.7
Licensing 51.7 74.3
Home Video 32.1 49.8
.com 14.9 65.1
Shop 14.0 22.9
Studios 19.6 2.0
1 11 2010 revenue breakdown shown Low Medium High Growth opportunities
•Conservative Markets/Customers balance sheet – >$180 million in cash New Existing and virtually no debt –and heightened financial discipline Diversification Innovation allows the Company • WWE Network •New toy launch P to invest, withstand ew •New film model •New apparel line latform shocks and fund NN •M&A opportunities • New video game growth •New TV shows
•Diversified platform Exp growth, both product roducts International Efficienc y a nsion and geographic, PP combined with •Mexico •Live event pricing effective cost • Brazil, Russia, India & •TV Specials management drives China •PPV pricing Existing value creation •Mattel market penetration • Better licensing terms •Focus on costs
Geographic Expansion
12 Focused on Efficiency
• Disciplined cost • Continue our proven track record of creating compelling content management and operating efficiency is –New talent and creative story lines – Sheamus and Nexus a key long‐term – ClbitCelebrity guest hthosts, media presence and ddiiriving pop culture growth priority –Strong partners –THQ, Mattel and Vivendi Entertainment • Periodically review and update pricing matrix – RiRaise d live event tic ke t prices in key top markktets – Implemented a price increase from $39.95 to $44.95 in 2010 (for our non‐WrestleMania events) – Better commercial terms with business partners •Remain vigilant on cost management – Efficient marketing efforts – Focus on vendor contract financial terms –Optimal staff size and reduced discretionary spending
13 Focused on Efficiency
•In late 2008, the Company made a commitment to lower its cost base by more than $20 million and 2009 results far exceeded that goal
500 2008‐2010 CAGR: ‐6.9% 2000‐2008 CAGR: +5.7% 456.2 450 417.3 398.1 395.4 400 131.3 349.7 350 109.1 127.7 109.4 293.2 300 96.1 millions) 250 71.1 in
s rr 200
(Dolla 324.9 150 308.2 286.0 253.6 270.4 100 222.1 50 0 2000 2006 2007 2008 2009 2010 Year
Direct and Variable expenses SG&AS,G&A expenses
Note: Direct and Variable expenses include Depreciation and Amortization expense 14 Innovate & Leverage the Brand
•New toy launch with Mattel – Revenue increased 162% over prior year fourth quarter and 113% on an annual basis •New video games – WWE® All Stars™ – WWE Legends will align with today’s most prominent Superstars •New television shows – Tough Enough –a non‐scripted series featuring the intense competition among twelve individuals for a WWE contract. The show is scheduled to debut April 4, 2011 on USA Network
15 Executing International Strategy
Higher U.K. $34M WWE global adoption curve
ee • Historic country development Mexico France cycle has been approximately 10+ $16M years and dependent on Revenu China macroeconomic conditions, $??M infrastructure, technological India capabilities and cultural tastes • In 2004 (~5 years after entering France the market), WWE’s business in China $250K France generated $250K. In 2010, Brazil Russia WWE generated ~$16M in France Lower
1 5 10 15 20 25 Years Since WWE Entered Market
Note: Graph is not to scale and for descriptive purposes only Markets with long time WWE presence 16 Markets recently entered by WWE Strong Management Team
Name Title Years at WWE Previous Experience Vincent K. McMahon Chairman & CEO Founder George Barrios CFO 2+ NY Times, Praxair and Time Warner Stephanie McMahon EVP, Creative & 10+ Operations Kevin Dunn EVP, TV Production 20+ Michelle D. Wilson EVP, Marketing 1+ USTA, XFL, NBA and Nabisco Brian Kalinowski EVP, Digital Media 3+ Lycos, Digital Equipment Corp., Stratus Computer and Availant Software Andrew Whitaker EVP, International 20+ NBC Michael Luisi EVP of Business 1Miramax Films, Frankfurt Affairs, General Kurnit, Klein & Selz, and Counsel and Secretary Weil Gotshal & Manges Jim Connelly SVP, Consumer 1+ NFL Products Michael Weitz SVP, Investor 4+ Time Warner and Relations and FP&A Dun & Bradstreet
17 Key Takeaways
•Objective: Increase • Strong, global brand with passionate fan base shareholder value • Attractive long‐term business and financial model • Compelling investment thesis – Proven core compettiencies, diverse prodtduct and geographic based on sound footprint, and solid financial strength fundamentals – WWE can achieve meaningful earnings growth based on: Strengthening global television distribution Exploiting new licensing agreements Disciplined cost management and operating efficiency • Experienced management team leading the way
18 Appendix •Business profiles
19 Live Events
Operational Highlights Industry News • 120 Superstars and Divas under contract •North American “Top 100 Tours” Ticket revenue •Two tours – RAW and SmackDown/NXT is down 17% vs. 2009 while the number of tickets sold are down 12%. This represents the lowest •6 shows per week and 300+ events annually number of tickets sold since 2005 • 200+ Domestic events and 70‐80 International •North American “ Top 100 Tours” average ticket events prices have decreased 6% thus far in 2010 vs. •International events have significantly higher 2009 and the trend will continue through the end attendance (+30%) and average ticket price (~2x) of the year
Financial Highlights Operating Metrics
120.0 5.7% CAGR 600 10,000 108.8 105.7 104.6 99.3 9,000 100.0 500 8,000 83.7 7,000 80.0 400 6,000 60.0 7.0% CAGR 300 74 5,000 61 75 77 74 40004,000 40.0 34.1 200 28.1 31.3 27.4 3,000 20.9 247 233 242 268 253 2,000 20.0 100 1,000 0.0 0 0 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010
Revenue Profit Contribution North American # of events International # of events North American average attendance International average attendance
Note: Revenue and Profit Contribution in USD millions 20 Television
• WWE programs are Operational Highlights Industry News broadcast in 30 • 145 Countries/ 30 Languages •Global TV licensing expected to grow annually languages to more •14 million viewers/week (U.S.) by 7% through 2014 than 145 countries, •7 hours of original programming/week • US contttent providers fin d glbllobal marktket and reach 14 million attractive: cable growth, relaxed restrictions on •4 original shows (U.S.) – RAW, SmackDown, NXT foreign content, and growing demand viewers in the U.S. and WWE Superstars • Technology advancements (e.g., HD channels), • Contractual agreements with annual escalators • RAW is the longest transition from analog to digital, and platform running weekly • Domestic and international revenue split is expansion (e.g., mobile TV and IPTV) will boost episodic television approximately 2/3 and 1/3 respectively market growth program in the U.S. with more original episodes than Lassie Financial Highlights Operating Metrics and GkGunsmoke 10.4% CAGR 127.0 5.0 TV Ratings 120 111.9 • WWE has 2 of the 100.7 100 92.4 4.0 top 5 longest running 85.5 80 21.1% CAGR 3.0 weekly episodic TV 57.3 60 46.1 2.0 show by ttltotal number 40 of episodes 26.6 25.9 24.9 20 1.0 0 2006 2007 2008 2009 2010 0.0 2006 2007 2008 2009 2010 Revenue Profit Contribution RAW SmackDown ECW/NXT WWE Superstars
Note: Revenue and Profit Contribution in USD millions 21 Pay‐Per‐View
Operational Highlights Industry News •13 events annually •U.S. PPV universe is 84M homes (46m cable, • WrestleMania XXVI contributed approximately 33M satellite and 5M Telco) $28.8 million of revenues, $13.1 million of profit • EtEvent PPV marktket is expectdted to increase at 4% contribution CAGR to $1B by 2013 • Annual average of 5 million buys (2007‐2009) •Consumer cable bill continues to average over •Suggested domestic retail price ‐ WrestleMania $100 putting downward pressure on PPV buys is $54.95 and non‐WrestleMania events are International: $44.95 •Differing lllevels of PPV adoption •Average revenue per buy of $17+ •Key growth markets include Latin America and India
Financial Highlights Operating Metrics
120.0 ‐6.9% CAGR 6,000 17 278 17 100.0 93.6 94.3 91.4 5,000 235 80.0 40 16 4,000 80.0 70.2 ‐6.6% CAGR 3,000 60.0 52.4 50.7 5,466 47.5 5,201 4,799 15 41.6 39.8 2,000 44504,450 40.0 3,645 1,000 20.0 14 0 ‐14 0.0 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 ‐1,000 13
Revenue Profit Contribution Current buys ()(000s) Prior period buys ()(000s) Number of events
Note: Revenue and Profit Contribution in USD millions 22 Licensing
Operational Highlights Industry News • 200+ Licensing Partners –Toys and Video games •Global video game market is expected to grow • Strong partnerships –Mattel and THQ 10.3% through 2010 due to online, wireless games and expected new consoles in 2012 •Mattel and THQ – toy and video game licenses account for approximately 2/3 of Licensing •Global toys market expected to remain revenue essentially flat due to growing preference for video games among kids •Worldwide licensing program to create products featuring our marks and logos including toys, •Piracy remains an issue video games and apparel
Financial Highlights Operating Metrics
70.0 12.7% CAGR 65.0 60.5 60.0 55.0 51.7 50.0 47.1 47.0 22.4 44.7 45.0 38.4 18.8 40.0 14.5 35.2 12.6% 33.7 32.0 35.0 16.9 CAGR 30.0 23.9 12.8 9.0 14.3 20.0 25.0 8.2 17.5 8.5 10.0 15.0 25.3 19.6 14.5 18.3 15.4 0.0 5.0 2006 2007 2008 2009 2010 ‐5.0 Revenue Profit Contribution 20062007200820092010 Video game revenue To y revenue Other
Note: Revenue and Profit Contribution in USD millions. 2006 Operating Metrics reflect fiscal year 2006 23 Home Video
Operational Highlights Industry News • Strong partnership – Vivendi Entertainment •North America CAGR of 3.2% thru 2013 • Approximately 30 releases annually ‐ ½ PPV and reaching $26B. Global CAGR of 4.3% thru 2013 ½ library contttent reaching $62B • 100+ titles in catalog •Global industry Blu–ray shipments and digital downloads offset DVD declines •All episodic TV content (Raw, SD) is available for distribution •Growing inclination of consumers to rent vs. purchase content • Distribution of content across all major transactional ddligital retailers (e.g. iTunes, Amazon) • Declining DVD pricing
Financial Highlights Operating Metrics
70.0 4,500 4,047 4,034 4,099 58.5 60.0 4,000 3,743 53.7 3,531 49.9 ‐10.4% CAGR 3,500 50.0 39.4 3,000 40.0 32.0 34.2 32.1 2,500 30.0 26.6 ‐11.9% 21.6 20002,000 CAGR 20.0 16.0 1,500 10.0 1,000
0.0 500 2006 2007 2008 2009 2010 0 2006 2007 2008 2009 2010 Revenue Profit Contribution Gross Units Shipped ()(000s)
Note: Revenue and Profit Contribution in USD millions 24 Magazine Publishing
Operational Highlights Industry News • WWE publishes a WWE Magazine, WWE Specials •Newsstand and subscription sales are expected and WWE Kids magazine to decline 3% in 2010 and remain essentially flat • WWE MiMagazine ‐ 5+ million readers and rankdked through 2013 “top five” in retail revenue in the men’s category • Industry shifts to higher subscription and cover • WWE Kids Magazine – 650,000 audience prices to drive profits •23 books on NY Times Best Seller List •Men’s and Kids categories face a difficult environment with the discontinuation of many titles
Financial Highlights Operating Metrics
4,858 20.0 5,000 4,703 16.5 15.4 4,097 4,026 ‐3.0% CAGR 4,000 15.0 13.5 12.4 11.0 3,068 3,000 10.0 ‐29.9% CAGR 5.1 2,000 5.0 2.9 2.1 2.3 0.7 1,000 0.0 2006 2007 2008 2009 2010 0 2006 2007 2008 2009 2010 Revenue Profit Contribution Gross Units Shipped ()(000s)
Note: Revenue and Profit Contribution in USD millions. 2006 Operating Metrics reflect fiscal year 2006 25 Digital Media
Operational Highlights Industry News • Digital ad sales with above industry average •Total global mobile and internet advertising traffic market expected to increase at 11.9% CAGR to • AitlApproximately 13 million monthly unique $92.7B in 2013 visitors ‐ ~50% international* •Global E‐commerce expected increase at 10% • Approximately 350+ million page views* CAGR to $230B in 2013 ‐ channel migration and growth in online purchases overall •Developing partnerships: Hulu, YouTube and TV.com •Online e‐commerce sales – average revenue per order ~$45+ • Approx. 300K orders annually
Financial Highlights Operating Metrics
0.7% CAGR 40.0 20.0 17.8 350 34.8 34.8 35.0 32.8 15.7 28.9 14.8 30.0 28.1 15.0 14.0 25.0 12.9 7.4% CAGR 20.0 329 329 10.0 300 13.5 14.2 311 15.0 11.9 12.9 301 9.7 10.0 293 5.0 5.0 0.0 0.0 250 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Revenue Profit Contribution Online Merch. Orders (()000s) Avg. Mo. Unique Visitors ()(millions)
* Excludes affiliate traffic 26 Note: Revenue and Profit Contribution in USD millions Studios
Operational Highlights Industry News •Pre‐2010 releases (“old” model) •US domestic Theatrical box office flat since –4 theatrical films and 2 Direct‐to‐DVD projects 2002 and projected to grow at 6% CAGR to – Expect film portfolio to surpass break‐even $13.4B profits on an ultimate basis •International box office has grown at 9% CAGR •Current model (‘self distribution” model) since 2000, and is expected to grow at 7% to endeavors to improve film returns $24.6B (with APAC at 8% CAGR) –Lower budget productions (~$5 million) •Despite revenue growth, film margins have –Leverage WWE assets for more efficient declined over the last 20 + years markiketing – Accelerating film windows –Self‐distribution
Financial Highlights Operating Metrics
30.0 4 24.5 25.0 19.6 20.0 3 16.0 3 15.0 10.0 8.9 7.7 2 2 2 5.0 373.7 0.4 0.0 1 1 ‐5.0 2007 2008 2009 2010 ‐10.0
‐15.0 ‐13.1 0 2006 2007 2008 2009 2010 Revenue Profit Contribution Number of releases
Note: Revenue and Profit Contribution in USD millions 27 International
Operational Highlights Industry News • Approximately 25% of the Company’s revenues •The outlook for the global economy projects is generated from international sources approximately 4% annual GDP growth through • Revenue from outside the USU.S. grew at an 2013 (Source: IMF) average of 18% per year (2003‐2008) •The European economy weakened significantly •Key sources of international growth are TV rights in 2010 and estimates of GDP growth in the and licensing EMEA region have been reduced •Top Markets: •Economic growth driven by the “BRIC” –EMEA ‐ UK, France and Germany members (Brazil, Russia, India and China) is –APAC ‐ AliAustralia, IdiIndia, Japan and SShouth Korea expected to be the highest in APAC and LATAM –Latin America –Mexico reaching approximately 6%–7%
Financial Highlights Operating Metrics
160.0 160.0 2006‐2008 CAGR: +14.9% 2006‐2008 CAGR: +14.9% 135.2 135.2 135.2 140.0 127.1 135.2 140.0 127.1 1.2 5.0 6.5 119.3 119.3 120.0 2.8 19.4 1.3 34.5 31.4 120.0 3.8 12.5 102.4 27.2 102.4 34.4 100.0 1.4 27.2 20.3 11.7 100.0 3.2 millions) 17.7 14.8 30.6 32.1 35.6 80.0 17.7 in millions)
19.5 80.0 30.4 45.4 in 37.2 39.0 60.0 32.8
Dollars 30.6 llars 60. 0 (( 40.0
(Do 94.3 44.6 43.3 41.7 40.0 84.9 82.5 80.2 20.0 30.6 40.3 68.8 0.0 20.0 2006 2007 2008 2009 2010 0.0 Year 2006 2007 2008 2009 2010 Year Live Events (Includes Venue Merch) Tel ev i s i o n Pay‐per‐view (Includes WWE Classics On Demand) Consumer Products Europe, Middle East & Africa (EMEA) Asia Pacific (APAC) Latin America Digital Media/Other
Note: Revenue and Profit Contribution in USD millions 28 29