WWE ANNUAL REPORT 2014 WWE 1241 EAST MAIN STREET, STAMFORD, CT 06902 BOARD OF DIRECTORS TRANSFER AGENT, DIVIDEND PAYING AGENT AND REGISTRAR Vincent K. McMahon Chairman of the Board American Stock Transfer & Trust Company, LLC and Chief Executive Officer 6201 15th Avenue Brooklyn, NY 11219 Stephanie McMahon 800.937.5449 Chief Brand Officer Paul Levesque Executive Vice President INDEPENDENT REGISTERED Talent, Live Events and Creative PUBLIC ACCOUNTING FIRM Stuart U. Goldfarb Co-Founder & Partner Deloitte & Touche LLP Melo7 Tech Partners, LLC 695 E. Main Street Stamford, CT 06901 Patricia A. Gottesman 203.708.4000 Former President and Chief Executive Officer Crimson Hexagon CORPORATE HEADQUARTERS David Kenin Former Executive Vice President of Programming 1241 East Main Street Crown Media United States, LLC P.O. Box 1241 Stamford, CT 06902 Laureen Ong 203.352.8600 Former President Travel Channel LLC Joseph H. Perkins TO OUR SHAREHOLDERS Former President, Communications Consultants, Inc. WWE had a remarkable year in 2014, characterized by extraordinary achievements. We generated Robyn W. Peterson SHAREHOLDER record revenue of more than $540 million, with nearly 25% from outside the U.S. We launched INFORMATION Chief Technology Officer WWE Network, which surpassed 1 million subscribers within 11 months, and with its success blazed Mashable Inc. Our stock is listed for trading on the a new trail in the media industry. We also renegotiated key television distribution agreements that New York Stock Exchange under will increase our rights fees by approximately $100 million from 2014 to 2018. These historic business Frank A. Riddick, III the ticker symbol WWE. For investor accomplishments are the outcome of a clear global strategy to distribute our content across new Chief Executive Officer information, please visit our website platforms and to realize much greater value from that content. at corporate.wwe.com or write to Shale - Inland Group LLC Corporate Headquarters, As we initiated a business transformation to drive long-term earnings growth, our 2014 OIBDA results Attention: Investor Relations Jeffrey R. Speed exceeded our most recent public guidance. Given that we are in the early stages of this transformation, or call 203-352-8600. our stock price showed increased volatility. WWE stock reached an all-time high, declined 26% over the Former Executive Vice President ____________________________ year, and in 2015 has increased 33% through February. and Chief Financial Officer Six Flags, Inc. All WWE programming, talent names, Importantly, we believe that we have reached a financial inflection point and are entering 2015 images, likenesses, slogans, wrestling with building momentum and significant opportunities ahead. Our strategy takes advantage of moves, trademarks, logos and key media and consumer trends, such as increasing broadband penetration and growing copyrights are the exclusive property of WWE and its subsidiaries. All other consumption of streaming video, and leverages the global strength of our brands and the trademarks, logos and copyrights are commitment of our management team. We are executing well and innovating faster than ever. the property of their respective owners. We are confident that we have the right strategy to generate meaningful growth and build © 2015 WWE. All Rights Reserved. shareholder value. BLAZING NEW TRAILS: WWE NETWORK In February 2014, we launched WWE Network, which features our 12 live pay-per-view events, original series, reality shows, documentaries, classic matches and more than 2,000 video-on-demand titles. Significant accomplishments in terms of content development, technology and design allowed us to bring our content direct to consumers. Reflecting WWE’s leadership, other major entertainment franchises like CBS, HBO and Nickelodeon followed suit, announcing plans to also bring their content direct to consumers. To grow WWE Network, we are focused on executing a five-part strategy, including entering new geographies, expanding distribution platforms, creating new content, developing new features, and implementing high-impact customer acquisition and marketing programs. “ It’s a new era for broadcast content and Vincent K. McMahon is leading the way. – Bill Simmons, ESPN ” We made the network available in more than 170 countries and territories, entered a partnership with Rogers Communications to facilitate distribution in Canada, and launched the network in the U.K., which almost overnight became our second-largest market globally. We also reached an agreement with OSN, the leading Pay-TV network in the Middle East and North Africa, to distribute WWE Network as a premium linear channel in this region. Within one year, we achieved distribution in all of WWE’s major markets with just a few current exceptions, such as India, China, and Germany. WWE Network now has subscribers spanning the globe from the U.K., Australia and South Africa to Tonga, Madagascar and Timor-Leste among many other countries. Consistent with evolving trends in video consumption, we secured distribution across a wide array of platforms, including gaming consoles, streaming devices, and smart TVs. Our content is, of course, the most important element of our strategy. We brought our pay-per-view events, including WrestleMania, to the network for no additional charge. In addition to these events, the network’s programming schedule has been highlighted by first-run, exclusive original content, such as WWE NXT Live!, an in-ring show featuring our emerging talent, live interviews with Stone Cold Steve Austin, and The Monday Night War, which provides a documentary-style look at some of the greatest moments in WWE history. These programs have been among the most watched on the network. To enhance our subscribers’ entertainment experience, we have increased the network’s video- on-demand library to nearly 3,000 hours and rolled out new “resume play” and “watch list” features across all WWE Network platforms. Over the coming year, we expect to expand our original programming with more exclusive live specials with sought after interviewees, talk shows, animation, and short-form content. Reflecting management’s belief in the broad appeal of WWE Network content, we introduced a simplified price plan at $9.99 per month with no commitment (cancel at anytime) and implemented successful promotional free trials in November 2014 and February 2015. Importantly, as WWE Network’s subscriber base has grown, the network continues to cultivate a high level of satisfaction and subscriber engagement. Viewer data indicates that, on average over 2014, close to 90% of subscribers access WWE Network at least once per week and 90% of subscribers are satisfied with WWE Network. In our view, WWE Network provides a global platform with unprecedented consumer value. We believe the results could be transformational for both WWE’s business model and financial performance. IS THE #1 SPORTS CHANNEL ON DRIVING GROWTH: ESCALATION OF GLOBAL TV RIGHTS FEES The strengthening of WWE’s content distribution agreements is another of WWE’s primary long-term growth drivers. Through 2014, WWE finalized television distribution agreements in the U.S., U.K., India, Canada, Thailand, Mexico and UAE. These seven key agreements with 4 billion video views account for television revenue that is expected to increase from approximately $130 million MORE THAN in 2014 to approximately $235 million in 2018. As such, over the period from 2014 to ® 2018, these deals provide over $100 million of contractual revenue growth subject only to counterparty risk. The significant increase in rights fees demonstrates, in our view, that WWE programs possess the attributes that networks value most: live (DVR-proof) content, built-in audience, high viewership and significant first-run hours. The $100 million of revenue growth from these agreements is more than WWE’s total revenue growth over the 450 past four years. Million COMBINED SOCIAL MEDIA FOLLOWERS The WWE App has reached 17 Million Downloads we expect to expand our original programming with more exclusive live specials BRAND STRENGTH AND ENGAGEMENT with sought after interviewees, talk shows, animation, and short-form content. The success of WWE’s growth initiatives ultimately derives Reflecting management’s belief in the broad appeal of WWE Network content, we MOST VALUABLE from WWE’s key strengths including our powerful brands, SPORTS BRANDS introduced a simplified price plan at $9.99 per month with no commitment (cancel at strong competitive position, robust content offerings, and large FORBES anytime) and implemented successful promotional free trials in November 2014 and addressable global market. WWE cultivates a passionate, global, February 2015. Importantly, as WWE Network’s subscriber base has grown, the network multi-generational audience. Measures such as the magnitude 1. Super Bowl continues to cultivate a high level of satisfaction and subscriber engagement. Viewer data of our digital and social media presence, the top ratings of our 2. Summer Olympic Games indicates that, on average over 2014, close to 90% of subscribers access WWE Network programs and our dominance in several consumer product at least once per week and 90% of subscribers are satisfied with WWE Network. categories all reflect WWE’s tremendous global appeal and 3. Winter Olympic Games strong competitive position. Over the past year, WWE generated In our view, WWE Network provides a global platform with unprecedented consumer value. 4. FIFA World Cup approximately