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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

For the fiscal year ended April 30, 2002

or

For the transition period from                                      to                                     

Commission file number 0-27639

WORLD WRESTLING ENTERTAINMENT, INC.
(Exact name of Registrant as specified in its charter)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT

None

        Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes ý    No o

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

        Aggregate market value of the voting stock held by non-affiliates of the Registrant at July 10, 2002 was approximately $177,835,894.

        As of July 10, 2002, the number of shares outstanding of the Registrant's Class A common stock, par value $.01 per share, was 15,807,735 and the number of shares outstanding of the Registrant's Class B common stock, par value $.01 per share, was 54,780,207 shares.

Portions of the Registrant's definitive proxy statement for the 2002 Annual Meeting of Stockholders are incorporated by reference in Part III of this Form 10-K

TABLE OF CONTENTS

*

Incorporated by reference from the Registrant's Proxy Statement for the 2002 Annual Meeting of Stockholders (the "Proxy Statement").

PART I

Item 1.    Business

        We are an integrated media and entertainment company, principally engaged in the development, production and marketing of television programming, pay-per-view programming and live events, and the licensing and sale of branded consumer products featuring our successful World Wrestling Entertainment brand. We have been involved in the sports entertainment business for over 20 years, and have developed World Wrestling Entertainment into one of the most popular forms of entertainment today. In May 2002, we changed our name to World Wrestling Entertainment, Inc. With the name change, we now have a global identity that is distinctive, unencumbered and supports our domestic and international growth plans and our brand extension initiatives.

        The key economic drivers of our business are live event attendance, pay-per-view buys and television ratings. While these drivers have continued to be soft in recent months relative to their previous highs, they nonetheless continue to reflect our strong presence in the marketplace and the loyalty of our fan base. This marketplace strength and loyal fan base has been monetized across our many revenue streams within our live and televised and branded merchandise segments. We anticipate continuing to develop broader distribution arrangements for our brand both in the United States and internationally.

        Over the past fifteen months, we have deepened our talent pool through our acquisition of certain assets of World Championship Wrestling, and as a result of a contraction in the number of competing sports entertainment companies. In an effort to further exploit and bolster our business, we launched a brand extension, creating two separate and distinct brands, Raw and SmackDown!, which each have their own distinct story lines, thus enabling us to have two separate live event tours. The two tours will allow us to visit domestic markets that we have been unable to visit and will also allow us to tour internationally on a more frequent basis.

        Our continuing operations are reported within two reportable segments, Live and Televised Entertainment and Branded Merchandise. For additional segment information, see Note 16 of Notes to Consolidated Financial Statements.

        World Wrestling Entertainment, Inc., formerly known as World Wrestling Federation Entertainment, Inc., was incorporated in Delaware in 1987, and in 1988 we merged with our predecessor company, which had existed since 1980. In October 1999, we sold 11,500,000 shares of Class A common stock to the public at an initial offering price of $17.00 per share. To further broaden our exposure in the financial marketplace, in October 2000, we began trading our Class A common stock on the New York Stock Exchange (NYSE symbol: "WWE"). Our operations include our wholly-owned subsidiaries, World Wrestling Entertainment Canada, Inc.; The World Entertainment, Inc.; World Wrestling Entertainment (International) Limited; Stephanie Music Publishing, Inc.; TSI Realty Company; Event Services, Inc.; WCW, Inc.; and our majority owned subsidiary, Titan/Shane Partnership. In early May 2001, we formalized our decision to discontinue the operations of the XFL, LLC and accordingly, reported the operating results and estimated shutdown costs as Discontinued Operations in our Consolidated Financial Statements as of April 30, 2001.

        In this Annual Report on Form 10-K, "WWE" refers to World Wrestling Entertainment, Inc. and its subsidiaries and its predecessors, unless the context otherwise requires. References to "we," "us," "our" and the "Company" refer to WWE and its subsidiaries. World Wrestling Entertainment and the stylized and highly distinctive World Wrestling Entertainment scratch logo are two of our marks. This Annual Report on Form 10-K also contains other of our trademarks and trade names as well as those of other companies. All trademarks and trade names appearing in this report are the property of their respective holders.

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Creative Development and Production

        Our creative team, headed by Vincent McMahon, develops soap opera-like storylines employing the same techniques that are used by many successful television series. We create compelling and complex characters and weave them into interactive entertainment that combines social satire, action adventure, drama, mystery, athleticism and humor. The interactions among the characters reflect a wide variety of contemporary topics, often depicting exaggerated versions of real life situations and typically containing "good versus evil" or "settling the score" themes. Story lines are usually played out in the wrestling ring, our main stage, and typically unfold on our weekly television shows and monthly pay-per-view events. Woven into the story lines is the ongoing competition for the various World Wrestling Entertainment championship titles.

        Our creative team also develops a character for each performer. Once a character's basic traits have been formulated, we work to define and emphasize those traits through various accessories, including costumes and entrance music. We own the rights to substantially all of our characters, and we exclusively license the rights we do not own through agreements with our performers.

        Our success is, in large part, due to the continuing popularity of our performers. We currently have exclusive contracts with approximately 150 performers, ranging from development contracts with prospective performers to long term guaranteed contracts with established performers. These contracts vary depending upon a number of factors, including the performer's popularity with our audience, their skill level and prior experience. Our performers are independent contractors who are highly trained and motivated and portray popular characters such as The Rock, The Undertaker, Triple H, Hollywood Hulk Hogan, Kane, Chris Jericho, Kurt Angle and Edge. We constantly seek to identify, recruit and develop additional performers for our business. Once recruited, established performers are immediately incorporated into our story lines while less experienced performers participate in our own extensive developmental training programs. Under agreements with regional promotors of wrestling events, promising candidates are often "loaned" to the regional promoters allowing these new performers to hone their skills by working in front of live audiences and appearing on local television programs. The most successful and popular performers are then incorporated into our television programming and pay-per-view events where their characters are more fully developed.

        With limited exceptions, we retain all rights in perpetuity to any intellectual property that is developed in connection with the characters portrayed by our performers. This includes the character and any associated costumes, names, props, story lines and merchandise. Our performers share in a portion of the revenues that we receive. We believe that our relationships with our performers are generally good.

Live and Televised Entertainment

        Live events, television programming and pay-per-view programming are our principal creative and production activities. Revenues from these activities were approximately $323.5 million, $335.7 million and $265.5 million in fiscal 2002, 2001 and 2000, respectively.

Live Events

        Live events are the cornerstone of our business, providing the content for our television and pay-per-view programming. Each event is a highly theatrical production, which involves a significant degree of audience participation and employs various special effects, including lighting, pyrotechnics, powerful entrance music and a variety of props.

        In fiscal 2002, we held 237 live events in approximately 100 cities in North America, including 18 of the 20 largest metropolitan areas in the United States, as well as several international locations. We have consistently held our live events at major arenas, such as Madison Square Garden in New York City, Arrowhead Pond of Anaheim, Allstate Arena in Chicago, First Union Center in Philadelphia,

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Fleet Center in Boston and Earls Court in London, England. Attendance at our live events was approximately 2.0 million for the fiscal year ended April 30, 2002 and approximately 2.5 million for the fiscal years ended April 30, 2001 and 2000.

        With the increase and depth of our talent pool and the introduction of two separate tours, we expect to hold approximately 350 live events in fiscal 2003. In an effort to meet strong international demand, we have increased our ability to tour internationally on a more frequent basis. In March 2002, we held three live events in Asia with total attendance of over 40,000 and an average ticket price of $63.00. In May 2002, we held a pay-per-view event in England as part of our European tour and have scheduled a live event in August in Melbourne, Australia where we expect approximately 50,000 fans at a sold-out Colonial Stadium and expect to return to Europe for another tour in October.

        We promote our live events through a variety of media, including television, radio, print and the Internet. Our revenues from live events are primarily derived from ticket sales, with prices for our live events averaging approximately $36 per ticket. The operator of a venue at which our live event is held typically receives a fixed fee or a percentage of the revenues from ticket and merchandise sales. In the past two years, our WrestleMania events broke our record for gross receipts for an event with approximately $3.5 million for Wrestlemania 17 and approximately $3.9 million for Wrestlemania 18. Attendance at these respective events was approximately 67,900 and 68,200 at Houston's Reliant Astrodome and Toronto's Skydome, respectively.

        Revenues from live events were approximately $74.1 million, $81.9 million and $68.9 million for the fiscal years ended April 30, 2002, 2001 and 2000, respectively.

Television Programming

        We are an independent producer of television programming. Relying primarily on our in-house production capabilities, we produce seven shows consisting of nine hours of original programming 52 weeks per year. On a weekly basis, our nine hours of programming delivers approximately 24 million television impressions each week. In addition to our television programming, we also produce on an annual basis 12 domestic pay-per-views, which are also distributed through certain international pay-per-view providers and 2 international pay-per-views which are produced in the U.K.

        Seven hours of our programming air domestically on cable and broadcast networks owned by Viacom Inc. and two hours air in syndication. To further develop our separate and distinct identities, talent and story lines for our flagship Raw and SmackDown! brands, we recently revised our programming lineup as follows:

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Raw is our two-hour live production that airs on TNN in primetime and has consistently been the number one rated regularly scheduled cable television program.

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Sunday Night Heat is primarily a taped one-hour live event program which airs on MTV on Sunday evenings, and Bottom Line, is a post produced "magazine" type show which airs in syndication on Friday / Saturday nights. Both of these programs help further define our Raw brand.

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SmackDown! is a taped two-hour program that airs on United Paramount Network ("UPN") in primetime and has consistently been the number one rated program on network television among male teens on Thursday nights.

•

Velocity is a taped one-hour live event program which airs on TNN on Saturday nights, and After Burn is a post produced "magazine" type show which airs in syndication on Saturday / Sunday nights. Both of these programs help further define our SmackDown! brand.

•

Confidential is a taped one-hour magazine-style program which airs on TNN on Saturday nights. This program provides an up-close look at World Wrestling Entertainment and its past and present performers, both in and out of the ring.

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        Currently TNN is available in approximately 85 million households, UPN is available in approximately 93 million households and MTV is available in approximately 83 million households. Our two syndicated programs are on air for approximately 319 hours per week on approximately 190 broadcast stations across the country.

        In connection with our TNN and MTV programming, we receive a rights fee totaling $572,000 per week.

        In addition to the foregoing programming, we co-produce a weekly half hour reality-based program, Tough Enough, which premiered on MTV in June 2001 and immediately follows SmackDown!. Tough Enough is a 13-week series that is a joint collaboration with MTV. Based on the success of the inaugural series, we aired Tough Enough II and have agreed with MTV to air Tough Enough III in the fall of 2002. Tough Enough II was the Number 1 rated regularly scheduled cable program on Thursday evenings during its run among certain key demographics, primarily audiences aged 12 - 34.

        Domestic television rights fee revenues were $35.0 million, $20.9 million and $7.1 million for the fiscal years ended April 30, 2002, 2001 and 2000, respectively.

        Due to the density of certain key demographics that our programming reaches, we are an attractive and efficient buy for our advertisers. Our programming is principally directed to audiences aged 12 to 34. Since our programming appeals to such a wide spectrum of age groups, we voluntarily designate the suitability of each of our shows using standard television industry ratings.

        We sell a substantial portion of the advertising time on our domestic and Canadian television programs to over 110 major advertisers and sponsors. We advertise products from some of the leading companies in the food and beverage, video game, toy, movie and television studio and telecommunications industries, among others. In addition to the sale of our advertising time, we also package sponsorships to meet the needs of our advertisers. These sponsorships range from presenting the Slam Of The Week, a 35-second spot that airs within our television programs, to sponsoring our annual WrestleMania event. Through these sponsorships, we offer advertisers a full range of our promotional vehicles, including television, Internet and print advertising, arena signage, on-air announcements and special appearances by our performers. Additionally, as part of certain sponsorship packages, we produce commercials featuring our performers.

        Advertising time and customized sponsorship programs are sold directly by our New York, Chicago and Toronto-based sales forces. Our arrangement with our television network partners provides that we pay the network the greater of a fixed percentage of our net advertising revenues less certain adjustments or a minimum guaranteed amount. With respect to Sunday Night Heat, while MTV sells the advertising inventory, we have a similar share in the participation of the net revenues.

        Advertising revenues were $83.6 million, $90.2 million and $77.9 million for the fiscal years ended April 30, 2002, 2001 and 2000, respectively.

        Our television and music recording studios and post-production operations are housed at our state-of-the-art facility in Stamford, Connecticut, which is staffed by 117 employees, including producers, directors, editors, cameramen, audio engineers, graphic designers, English and Spanish-speaking announcers and an administrative staff that oversees the production schedule. Our staff is augmented by freelance technicians who assist in our remote television broadcasts.

Pay-Per-View Programming

        On a monthly basis, our story lines either culminate or change direction at each pay-per-view. We intensively market and promote the story lines that are associated with our upcoming pay-per-view event through our television shows, our Internet sites, and a variety of other promotional campaigns. We produce 12 domestic pay-per-view programs and two international pay-per-view programs annually, which consistently rank among the pay-per-view programs achieving the highest number of buys.

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Pay-per-view buys of our domestic events over the past three fiscal years were 7.1 million, 8.0 million and 6.9 million in fiscal 2002, 2001 and 2000, respectively. WrestleMania 16 and 17, which is our annual premiere event, generated over 1.0 million buys each and Wrestlemania 18 is currently in line to achieve the same amount. A substantial amount of the buys for an event and the related payment is determined and paid by the cable and satellite distributors within 120 days after the event. Final reconciliation is completed within one year. WrestleMania 18 had a suggested retail price of $39.95 and effective with our April 2002 event, each of our other 11 domestic pay-per-view events has a suggested retail price of $34.95, up from $29.95.

        Currently, pay-per-view is available to approximately 57 million cable and satellite subscribers in the United States. Our pay-per-views are available to approximately 54% of all domestic cable homes with inDemand being the largest distributor with approximately 29 million cable subscribers. Other major distributors include DIRECTV, Echostar and a growing number of international affiliates which continue to increase the potential subscriber base for our pay-per-view events. We also distribute our pay-per-view programs to commercial locations for public viewing. Consistent with industry practices, we share the revenues with the cable systems and satellite providers and pay fees to inDemand.

        WWE Fanatics is a post-produced pay-per-view program that utilizes content from our extensive tape library. Each new program airs throughout the month. WWE Fanatics has a suggested retail price of $9.95. Buys for WWE Fanatics programs were 0.3 million and 0.2 million in fiscal 2002 and 2001, respectively.

        Domestic and International pay-per-view revenues were $112.0 million, $128.2 million and $106.4 million for the fiscal years ended April 30, 2002, 2001 and 2000, respectively.

International

        In an effort to meet strong international demand, we have expanded our international live event tours and the distribution of our television programming. Our television programming is currently broadcast in over 130 countries and 13 different languages. In February 2002, we opened our office in London, England to facilitate sales and administration of our international television distribution. We have expanded our distribution throughout Asia, Europe, Latin America and Australia and have secured new television distribution agreements on terrestrial, cable and satellite platforms throughout those locations. Most notably we have recently signed distribution agreements with broadcasters in Australia, India, Indonesia, Malaysia, the United Kingdom, France and South Africa.

        Television rights fee revenues outside of North America were $18.3 million, $14.3 million and $5.1 million for the fiscal years ended April 30, 2002, 2001 and 2000, respectively.

        In March 2002, we held three live events in Asia with total attendance of over 40,000 and an average ticket price of $63.00. In May 2002, we held a pay-per-view event in England as part of our European tour. In addition, we have scheduled a live event in August in Melbourne, Australia where we expect approximately 50,000 fans at a sold-out Colonial Stadium and expect to return to Europe for another tour in October. We believe there is strong demand for our programming, live events and products internationally, and with the creation of two separate brands and two live event tours, we should be in a much stronger position to meet this demand.

        In connection with our agreement with BSkyB in the U.K., we produce two U.K. pay-per-view programs per year through April 30, 2003. Buys related to these events totaled approximately 0.3 million for both fiscal 2002 and 2001 and approximately 0.2 million for fiscal 2000. Our U.K. pay-per-views have a suggested retail price of 14.00 Pounds (approximately $20.00).

        Total revenues derived from sales outside of North America were approximately $31.4 million, $22.1 million and $9.0 million for the fiscal years ended April 30, 2002, 2001 and 2000, respectively.

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Branded Merchandise

        We offer a wide variety of branded merchandise through a licensing program and an integrated direct sales effort. Our revenues from the sale of our branded merchandise were approximately $101.5 million, $120.3 million and $113.8 million in fiscal 2002, 2001 and 2000, respectively.

Licensing and Direct Sales

        We have an established licensing program using our World Wrestling Entertainment mark and logo, copyrighted works and characters on thousands of retail products, including toys, video games, apparel and a wide assortment of other items. In all of our licensing agreements, we retain creative approval over the design, packaging, advertising and promotional material associated with all licensed products to maintain the distinctive style, look and quality of our intellectual property and brand. Our licensing agreements provide that we receive a percentage of the wholesale revenues as a royalty and require minimum guarantees.

        Our direct merchandise operations consist of the design, marketing and sale of various products, such as shirts, caps and other items, all of which feature our characters and/or our scratch logo. All of these products are designed by our in-house creative staff and manufactured by third parties. The merchandise is sold at our live events under arrangements with the arenas, which receive a percentage of the revenues. Our merchandise is also sold through internally developed catalogs, which are distributed periodically as part of World Wrestling Entertainment Magazine and RAW Magazine. We also sell merchandise on a direct basis via our television shows, our wweshopzone.com Internet site and our retail store in New York.

Home Video

        We own and continue to amass a video library containing thousands of hours of programming from our pay-per-view events and our television shows dating back to the 1970s. Beginning in the mid-1980s, this library was used in the production and sale of home videos by a licensee. In 1998, we began to produce and market home videos in-house and in 1999 added DVD's. In addition to producing videos and DVD's from our library footage, as well as from our recently acquired WCW film library, we also utilize original footage produced specifically for this purpose. We create master tapes and contract with third parties to create our DVD master and to duplicate our videos and DVD's. As of August 2001, we entered into an agreement with Sony Music Video for the distribution of all our home video products at retail. Prior to August 2001, our home video revenues were derived from sales through approximately 25 unaffiliated distributors and/or direct customers. Our videos are typically sold at retail sales prices ranging from $14.95 to $19.95 and our DVD's are typically sold at retail sales prices ranging from $19.95 to $24.95. In fiscal 2002 we sold approximately 1.7 milion units which consisted of 51 new titles as well as other titles from our catalog. According to Billboard Magazine, six of our home videos ranked among the top 10 best selling home videos in the "Recreational Sports" category as of July 13, 2002.

        The injunction issued by the English High Court in legal proceedings instituted against us by World Wide Fund for Nature, unless modified or clarified, may adversely affect the future use or repackaging of our historical video library to the extent it contains our former logo and verbal references to the "WWF". See "Legal Proceedings."

SmackDown! Records

        Music is an integral part of the entertainment experience at our live events and on our television programs. We compose and record theme songs tailored to our characters in our recording studio in Stamford, Connecticut. We and a third-party music publisher own the musical composition rights to this music and we own all of the sound recording rights to our master recordings. Third parties

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manufacture, market and distribute CDs of our music to retailers nationwide, such as MusicLand, K-Mart, Wal-Mart, Best Buy and Transworld.

        Seven albums containing our music have been released to date. Our most recent compilation, Forceable Entry, was our first release with Columbia Records.

Publishing

        Our publishing operations consist primarily of two magazines, World Wrestling Entertainment Magazine and RAW Magazine, each of which are issued every four weeks, and a series of specials. All of these magazines are used to help shape and complement story lines in our television programs and at our live events. We also include our direct marketing catalog in our magazines on a quarterly basis. The magazines include color photographs taken at recent live events, biographies and features of our performers and human interest articles. Our in-house publishing and editorial departments prepare all of the editorial content and use outside contractors to print and distribute the magazines to subscribers and newsstands. The combined circulation of our monthly magazines was approximately 5.7 million and circulation for our specials was approximately 1.2 million in fiscal 2002.

        Under a publishing licensing ageement with Simon and Schuster, they will publish multiple book titles commencing in the fall of 2002. Previously, our books were published through ReganBooks, an imprint of Harper Collins. We have broadened into literary genres beyond autobiographies, including children's books, cookbooks and historical anthologies. To date, nine titles have been released. Each of the titles made an appearance on the New York Times Bestseller List with three titles reaching the Number 1 position.

New Media

        We utilize the Internet to promote our brand, create a community experience among our fans and to market and distribute our various products. Through our network of Internet sites, our fans can purchase our branded merchandise online, obtain our latest news and information, including content that is accessible only online, stay abreast of our evolving story lines, tap into interactive chat rooms to communicate with each other and our performers, and experience archived video and audio clips of performers and previous media events. We promote wwe.com on our televised programming, at our live events, in our two monthly magazines and in substantially all of our marketing and promotional materials. In addition to wwe.com, our network of sites includes, among others, wweshopzone.com, therock.com, wwedivas.com, undertaker.com and wwecorpbiz.com.

        WWE.com continues to maintain a strong base in the number of people visiting our sites and purchasing our products via the Internet. In April 2002, our Internet sites generated approximately 330 million page views as compared to approximately 300 million page views in April 2001 and approximately 200 million page views in April 2000. According to Net Score, we had approximately 7.3 million, 8.7 million and 4.4 million unique visitors in April 2002, 2001 and 2000, respectively. The 7.3 million visitors spent an average of 45 minutes on our site.

The World

        In May 2000, we acquired for approximately $24.5 million our leased 46,500 square foot entertainment complex located in Times Square. Through April 30, 2002 we have invested an additional $16.0 million in the facility. These investments include the construction of a marquee, built to historical landmark specifications, and a television and recording sound stage and studio. The complex includes a 600 seat restaurant and 2,200 square feet of retail space. The complex provides for a variety of entertainment uses, including:

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the airing of our regularly scheduled TV shows and pay-per-views,

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•

the hosting of concerts and other live events, including press conferences, stockholder meetings and product launches,



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a night club,



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ongoing appearances and autograph sessions featuring our performers, and



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banquets, birthday parties and other social and corporate functions.

        The World generated net revenue of $14.1 million and $16.6 million in fiscal 2002 and 2001, respectively, and incurred operating losses of $7.9 million and $2.6 million in fiscal 2002 and 2001, respectively, which included depreciation and amortization of $2.9 million and $2.4 million in fiscal 2002 and 2001, respectively.

Other Business Developments

        We recently hired Joel Simon as President for our new entertainment division, WWE Films, which is based in Los Angeles, California, to spearhead our initiatives in developing complementary theatrical and television productions.

Competition

        We compete for advertising dollars with other media companies. For our live, television and pay-per-view audiences we face competition from professional and college sports as well as from other forms of live, film and televised entertainment and other leisure activities. We compete with entertainment companies, professional and college sports leagues and other makers of branded apparel and merchandise for the sale of our branded merchandise. Certain companies with whom we compete have greater financial resources than we do.

Trademarks and Copyrights

        Intellectual property is material to all aspects of our operations and we expend substantial cost and effort in an attempt to maintain and protect our intellectual property and to maintain compliance vis-à-vis other parties' intellectual property. We have a large portfolio of registered and pending trademarks and service marks worldwide and maintain a large catalog of registered copyrights on all of our merchandise containing artwork, including merchandise, music, photographs, books and magazines, videos and apparel art. The focus of our continuous registration effort is to seek copyright and trademark registration of marks and works which embody our originally created characters portrayed by our performers and which encompass images, likenesses or names of these characters, commonly referred to as their trade dress. We also own a large number of Internet web domain names and have a network of developed sites, which contribute to the exploitation of our trademarks and service marks worldwide. See "Legal Proceedings."

        We vigorously enforce our intellectual property rights by, among other things, searching the Internet to ascertain unauthorized use of our intellectual property, seizing goods at our live events that feature unauthorized use of our intellectual property and seeking restraining orders in court against any individual or entity infringing on our intellectual property rights.

Employees

        As of July 3, 2002, excluding operations at The World, we had 413 full-time employees. Of that total, 154 were primarily engaged in organizing and producing live performances and television and pay-per-view shows, 69 were primarily engaged in licensing, merchandising and consumer product sales, and 190 were primarily engaged in management and administration. Our in-house production staff is supplemented with contract personnel that are routinely used for our television production.

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        As of July 3, 2002, we had approximately 226 full time employees at The World complex. Of that total, 27 were engaged in management and administration and 199 were hourly employees engaged in the food service, retail administration and entertainment aspects of the complex.

        We believe that our relationships with our employees are generally satisfactory. None of our employees, other than certain stage production employees at The World, are represented by a union.

Item 2.    Properties

        We maintain our executive offices, television and music recording studios, post-production operations and warehouses at locations in or near Stamford, Connecticut, our entertainment complex in New York and sales offices in New York, Chicago, Los Angeles, London and Toronto.

        We own the buildings in which our executive and administrative offices, our television and music recording studios and our post-production operations are located. We lease space for our entertainment complex, sales offices and our warehouse facilities.

        Our principal properties consist of the following:

(1)

Excludes 4,000 sq ft of temporary space and 138,000 square feet of parking space adjacent to the production facilities.

        In addition, we own a daycare facility in Stamford, Connecticut on property adjacent to our production facilities, which originally offered child care services only to our employees, but is now also open to the public. The licensing and operation of this facility is fully managed by a third-party contractor. We have the responsibility to obtain the required licenses and to ensure that the facility meets health, safety, fire and building codes.

Regulation

Live Events

        In certain states in the United States we are required to comply with regulations of state athletic commissions and other applicable regulatory agencies in order to promote and conduct our live entertainment. Twenty-four states require that we obtain a promoter's license, which is a corporate license necessary for us to promote our live events and is granted to us on an annual basis. Twenty-two states require our performers and referees to obtain a performer's license, which is an individual license necessary for our performers and referees to perform at our live events and is granted to them on an annual basis. Seven states require that our performers take an annual physical examination. In addition to the annual licenses that certain states require, twelve states require that we obtain a permit for each event that we hold. We are also subject to the regulations of athletic commissions in certain

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Canadian provinces. These commissions require that we obtain promoter's licenses and medical approval for our performers. We are in compliance with all applicable state and local athletic commission regulations.

Television Programming

        The production and distribution of television programming by independent producers is not directly regulated by the federal or state governments, but the marketplace for television programming in the United States is substantially affected by regulations of the Federal Communications Commission applicable to television stations, television networks and cable television systems and channels. We voluntarily designate the suitability of each of our television shows using standard industry ratings, such as PG (L,V) or TV14.

Other

        The World complex is governed by New York State and City rules and regulations relating to bars and restaurants including liquor regulations and fire and health codes.

Item 3.    Legal Proceedings

        In April 2000, the WWF—World Wide Fund for Nature (the "Fund") instituted legal proceedings against us in the English High Court seeking injunctive relief and unspecified damages for alleged breaches of an agreement between the Fund and us. The Fund alleges that our use of the initials "WWF" in various contexts, including (i) the wwf.com and wwfshopzone.com internet domain names and in the contents of various of the our websites; and (ii) our "scratch" logo violate the agreement between the Fund and us. In January 2001, the Fund filed for summary judgment on its claims. On August 10, 2001 the trial judge granted the Fund's motion for summary judgment, holding we breached the parties' 1994 agreement by using the "wwf" website addresses and scratch logo and that a trial is not warranted on these issues. On October 1, 2001, the judge issued a form of written injunction barring most uses of the initials "WWF", including in connection with the "wwf" website addresses and the use of the scratch logo, by us and our licensees. On February 27, 2002, the Court of Appeal affirmed the trial judge's decision and dismissed our appeal; and on June 10, 2002, the House of Lords declined to hear our appeal. We have five months from the date of the House of Lords' decision to comply with the injunction. We intend to comply with the injunction and to seek modification of the injunction where it is impractical and/or impossible to comply. Prior to the House of Lords' decision, we took steps to change our name to "World Wrestling Entertainment, Inc." and to revise our logo and switch our initials to "WWE". These changes have been incorporated into our television and pay-per-view shows, promotional materials used by us and our various distributors, affiliates and licensees, advertising campaigns as well as our corporate stationery and facilities and statutory filings with federal and state agencies. However, certain other aspects of the injunction as issued may be impracticable or difficult to comply with and, unless modified or clarified, may adversely affect the use or repackaging of our historical video library containing our former logo and verbal references to the "WWF" and our licensing program that uses our former logo on a variety of retail products, including toys and video games. The Fund also has pending before the trial court a damages claim associated with our use of the initials "WWF". No hearings have been scheduled on this aspect of the Fund's claim and to date, no evidence has been submitted by the Fund as to any damages. We have recorded $2.0 million of expenses, included in selling, general and administrative expenses, through the fourth quarter of fiscal 2002, in connection with compliance with this injunction. We are unable to predict what additional costs or changes to our operations may be required to comply with the injunction, which may have a material adverse effect on us.

        In September 1999, we were served with a complaint regarding an action that Nicole Bass, a professional wrestler previously affiliated with us, filed in the United States District Court for the

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Eastern District of New York in which she alleges sexual harassment under New York law, civil assault and intentional infliction of emotional distress. We filed a motion to dismiss the original complaint. During oral argument on our motion to dismiss, Plaintiff requested leave of court to file an amended complaint. The Plaintiff filed a second amended complaint on October 20, 2000. Motions to Dismiss the second amended complaint were filed on December 18, 2000 and granted in part on February 14, 2001. On March 5, 2001, we answered the surviving counts in the second amended complaint and have denied liability. On January 11, 2002, we filed a motion for summary judgment on all plaintiff's remaining claims and on June 17, 2002, the Court granted in part and denied in part our motion. Trial has been set to begin on September 16, 2002.

        On November 14, 2000, Stanley Schenker & Associates, Inc. filed a complaint against us in Superior Court, Judicial District of Stamford/Norwalk, Connecticut, relating to the termination of an Agency Agreement between us and Plaintiff. Plaintiff seeks compensatory damages and punitive damages in an unspecified amount, attorneys' fees, an accounting and a declaratory judgment. On December 15, 2000, we filed a motion to strike all the claims against us, with the exception of one count for breach of contract. This motion was granted as to two claims. On March 27, 2001, the Plaintiff filed a substituted complaint reasserting all counts against us. On April 11, 2001, we answered the substitute complaint. On February 27, 2002, we filed amended counterclaims and on June 19, 2002, we filed second amended counterclaims. Discovery in this case is currently ongoing. The Court has scheduled a trial date of March 2003. We believe that we have meritorious defenses and intend to defend the action vigorously. An unfavorable outcome of this suit may have a material adverse effect on our financial condition, results of operations or prospects.

        In response to a demand letter from the William Morris Agency, Inc., we filed an action on October 2, 2000 in the United States District Court for the Southern District of New York seeking declaratory, legal and equitable relief relating to Defendant's improper claims for commissions on business opportunities with which it had no involvement. William Morris filed a counterclaim on February 1, 2001 alleging breach of contract and seeking to recover unspecified damages in the form of commissions allegedly owed. William Morris filed a motion to dismiss all non-contract claims against it. We also filed a motion to partially dismiss William Morris's counterclaims. By Order dated June 21, 2001, the court granted William Morris's motion to dismiss only with respect to our claim for fraud and unfair trade practices; William Morris's motion to dismiss was denied with respect to the remaining counts of our complaint. In expert testimony, William Morris submitted an expert report claiming damages in excess of $40 million. Discovery is closed. On June 14, 2002, William Morris filed a motion for summary judgment on all claims against it. We believe that we have a meritorious defense to William Morris's counterclaim and intend to defend the action vigorously. An unfavorable outcome of this suit may have a material adverse effect on our financial condition, results of operations or prospects.

        On October 19, 2001, we were served with a complaint by Marvel Enterprises, Inc. in the Superior Court of Fulton County, Georgia alleging that we breached the terms of a license agreement regarding the rights to manufacture and distribute toy action figures of various wrestling characters that perform under the "World Championship Wrestling" or "WCW" tradenames. The plaintiff seeks damages and a declaration that the agreement is in force and effect. We filed our Answer on November 19, 2001. We have denied liability and are contesting the claims. We also named as a defendant Universal Wrestling Corp. ("Universal, Inc."), formerly known as World Championship Wrestling, Inc. Due to a conflict between Universal, Inc. and plaintiff's counsel, by agreement of the parties Universal, Inc. was dismissed from the suit. On December 28, 2001, the plaintiff commenced a separate action against Universal, Inc., filed in the same court as a related action to the suit pending against us. We are currently reviewing whether we may have any indemnification obligations to Universal, Inc. in connection with our purchase of certain assets of World Championship Wrestling, Inc. On December 14, 2001, we filed a motion to dismiss all claims against us. That motion was denied on

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March 14, 2002. Discovery in the case is ongoing and the parties are in discussions regarding an extension of fact discovery. An unfavorable outcome of this suit may have a material adverse effect on our financial condition, results of operations or prospects.

        On December 5, 2001, a purported class action Complaint was filed against us asserting claims for alleged violations of the federal securities laws. Also named as defendants in this suit were Bear, Stearns & Co. Inc., Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Credit Suisse First Boston Corporation, WIT Capital Corporation, Donaldson, Lufkin & Jenrette Securities Corporation, Chase H&Q (Hambrecht & Quist LLC) (collectively, the "Underwriter Defendants"), Vincent K. McMahon, Linda E. McMahon and August J. Liguori (collectively, the "Individual Defendants"). The Complaint alleges, inter alia, (i) claims under Section 11 of the Securities Act against all defendants, (ii) claims under Section 12(2) of the Securities Act against the Underwriter Defendants, (iii) claims under Section 15 of the Securities Act against us and the Individual Defendants, (iv) claims under Section 10(b) of the Exchange Act and Rule 10(b)(5) against all defendants, and (v) claims under Section 20(a) of the Exchange Act against the Individual Defendants. According to the allegations of the Complaint, the Underwriter Defendants allegedly engaged in manipulative practices by, inter alia, pre-selling allotments of shares of our stock in return for undisclosed, excessive commissions from the purchasers and/or entering into after-market tie-in arrangements which allegedly artificially inflated our stock price. The plaintiff further alleges that we knew or should have known of such unlawful practices. As relief, the Complaint seeks (i) a ruling that the suit is properly maintainable as a class action, (ii) unspecified class damages and statutory compensation against all defendants, jointly and severally, (iii) an award of attorneys' fees and costs, and (iv) such other relief as the court deems proper. We deny all allegations against us, believe that we have meritorious defenses on plaintiffs' claims, and intend to defend this action vigorously. We understand that nearly 1,000 suits with similar claims and/or allegations have been filed over the past couple of years against companies which have gone public in that general time period. All of these claims have been consolidated before the same judge in the United States District Court for the Southern District of New York. We are a part of a motion to dismiss filed on behalf of all issuers on July 15, 2002. We cannot at this time predict the likely outcome of this litigation.

        We are not currently a party to any other material legal proceedings. However, we are involved in several other suits and claims in the ordinary course of business, and we may from time to time become a party to other legal proceedings arising in the ordinary course of doing business.

Item 4.    Submission of matters to a vote of Security Holders

        Not applicable.

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PART II

Item 5.    Market for Registrant's Common Equity and Related Stockholder Matters

Price Range of Class A Common Stock

        In connection with our corporate name change to World Wrestling Entertainment, Inc., commencing July 1, 2002, the symbol under which our Class A common stock trades was changed to "WWE." Effective October 25, 2000, our Class A common stock began trading on the New York Stock Exchange under the symbol "WWF."

        From October 19, 1999 through October 24, 2000, our Class A common stock had been traded on the Nasdaq National Market under the symbol "WWFE."

        The following table sets forth the high and the low sale prices for the shares of Class A common stock as reported by the New York Stock Exchange and the Nasdaq National Market for the periods indicated.

        There were 9,895 holders of record of Class A common stock and three holders of record of Class B common stock as of July 8, 2002.

        We plan to retain all of our earnings to finance the expansion of our business and for general corporate purposes and do not anticipate paying any cash dividends on our Class A or Class B common stock in the foreseeable future. Any change to this dividend policy will be determined by our board of directors on the basis of various factors, including our results of operations, financial condition, capital requirements and investment opportunities.

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Equity Compensation Plan Information

        The following table sets forth certain information with respect to securities authorized for issuance under equity compensation plans as of April 30, 2002.

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Item 6.    Selected Historical Consolidated Financial and Other Data

        The following table sets forth our selected historical consolidated financial data for each of the five fiscal years in the period ended April 30, 2002. The selected historical consolidated financial data as of April 30, 2002 and 2001 and for the fiscal years ended April 30, 2002, 2001 and 2000 have been derived from the audited consolidated financial statements included elsewhere in this Form 10-K. The selected historical consolidated financial data as of April 30, 2000, 1999 and 1998 and for the fiscal years ended April 30, 1999 and 1998 have been derived from our audited consolidated financial statements, which have not been included in this Form 10-K. Certain prior year amounts have been reclassified to conform to current year presentation. You should read the selected historical consolidated financial data in conjunction with our historical consolidated financial statements and related notes and the information set forth under "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained elsewhere in this Form 10-K.

        Concurrent with the issuance of shares in our initial public offering in October 1999 (the "Offering"), we terminated our election to be subject to the provisions of Subchapter S and have become subject to the provisions of Subchapter C of the Internal Revenue Code. As a Subchapter C Corporation, we are fully subject to federal, state and foreign income taxes. Prior to the Offering, our taxable income or loss had been included in the federal and certain state income tax returns of our stockholder. The provision for income taxes reflected in our historical consolidated financial statements through the date of our Offering relates only to foreign and certain state income taxes for those states that did not recognize Subchapter S status. Our stockholder was responsible for federal and certain state income taxes with respect to our operations, which were funded by distributions from our undistributed earnings account.

        EBITDA represents income from continuing operations before interest, taxes, depreciation, amortization and stock option and other non-cash charges. EBITDA is presented because management believes that such information is considered by certain investors to be an additional basis for evaluating a company's operating performance, leverage and liquidity. EBITDA should not be considered an alternative to measures of operating performance determined in accordance with generally accepted accounting principles or as a measure of our operating results and cash flows or as a measure of our liquidity. EBITDA, as derived by us, may not be comparable to similarly titled measures reported by other companies.

        The following items may affect the comparability between each of the five years then ended: a) the results of operations and estimated shutdown costs for the fiscal years ended April 30, 2002 and 2001 related to our discontinued business, the XFL; b) the settlement of a $7.0 million outstanding lawsuit during the fiscal year ended April 30, 2001; c) non-cash stock option and other non-cash charges of $0.8 million and $15.3 million for the fiscal years ended April 30, 2001 and 2000, respectively; and (d) the impact on our provision for income taxes on continuing operations resulting from our differences in our effective tax rates of 36.9%, 37.1%, 20.3%, 3.4% and 5.2% for the fiscal years ended April 30, 2002, 2001, 2000, 1999 and 1998, respectively, due to our change in status to a Subchapter C Corporation concurrent with our Offering.

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