Back to GetFilings.com






UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended April 30, 2000

or

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from________ to __________

Commission file number 0-27639


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

Delaware 04-2693383
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

1241 East Main Street
Stamford, CT 06902
(203) 352-8600
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)


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


Class A Common Stock, $.01 par value per share Nasdaq National Market
(Title of each class) (Name of each exchange on which registered)


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 X No_____
-----

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.


Aggregate market value of the voting stock held by non-affiliates of the
Registrant at July 28, 2000 was approximately $341,411,350.

As of July 28, 2000, the number of shares outstanding of the Registrant's Class
A common stock, par value $.01 per share, was 16,170,384 and the number of
shares outstanding of the Registrant's Class B common stock, par value $.01 per
share, was 56,667,000 shares.

The Registrant's definitive proxy statement for the 2000 Annual Meeting of
Stockholders is incorporated by reference in Part III of this Form 10-K


TABLE OF CONTENTS



Page
----

PART I

Item 1. Business.................................................................................. 1
Item 2. Properties................................................................................ 9
Item 3. Legal Proceedings......................................................................... 11
Item 4. Submission of Matters to a Vote of Security Holders....................................... 12

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters..................... 13
Item 6. Selected Financial Data................................................................... 13
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations..... 17
Item 7A. Quantitative and Qualitative Disclosures about Market Risk................................ 25
Item 8. Consolidated Financial Statements and Supplementary Data.................................. 25
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure...... 25

PART III

Item 10. Directors and Executive Officers of the Registrant........................................ *
Item 11. Executive Compensation.................................................................... *
Item 12. Security Ownership of Certain Beneficial Owners and Management............................ *
Item 13. Certain Relationships and Related Party Transactions...................................... *

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K........................... 26


* Incorporated by reference from the Registrant's Proxy Statement for the 2000
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 highly successful World Wrestling Federation brand. We
have been involved in the sports entertainment business for over 20 years, and
have developed the World Wrestling Federation into one of the most popular forms
of entertainment today. We are utilizing this experience in the creation of the
XFL, a professional football league, which will begin its inaugural season in
February 2001. See "New Business Developments" for a further discussion of the
XFL. We have experienced significant growth in many aspects of our business. We
believe this growth has been driven by a series of management decisions
initiated to reposition our business. These decisions included:

. Expanding our story lines through the further integration of
contemporary themes;

. Increasing our focus on the continuous development of talented young
performers to supplement our pool of established talent;

. Developing additional weekly television programming and intensifying
our pay-per-view marketing efforts to expand our audience;

. Bringing the distribution of home videos and the publication and
distribution of direct mail catalogs in-house;

. Expanding the licensing and direct sale of our branded merchandise;

. Negotiating agreements to expand our rights to sell advertising time
on our television programming; and

. Establishing a presence on the Internet to further promote our
brand, generate additional revenue streams, and provide our fans
with a channel for interactive communication.

Our objectives are to broaden our leadership position in the creation,
production and promotion of our form of televised and live entertainment events
and to leverage our technical and operating skills to pursue complementary
entertainment-based business opportunities. Some of the key elements of our
strategy are to:

. Continue to produce high quality, branded programming, live events
and consumer products for worldwide distribution;

. Expand our existing television and pay-per-view distribution
relationships and develop broader distribution arrangements for our
branded programming worldwide;

. Increase the licensing and direct sales of our branded products
through our distribution channels;

. Further develop the Internet as an entertainment and advertising
platform;

. Form strategic relationships with other media and entertainment
companies, such as National Broadcasting Company, Inc. ("NBC") and
CBS and its parent company Viacom Inc. ("Viacom / CBS"), to further
promote our brand and our products and to develop new brands, such
as the XFL;

. Develop new non-core programming; and

. Grow location-based entertainment sites, such as our recently
acquired WWF NY themed complex in Times Square.

1


In October 1999, we sold 11,500,000 shares (including the underwriters'
overallotment of 1,500,000 shares) of Class A common stock to the public at an
initial offering price of $17.00 per share. World Wrestling Federation
Entertainment, Inc., formerly known as Titan Sports, Inc., was incorporated in
Delaware in 1987, and in 1988 we merged with our predecessor company, which had
existed since 1980. Our operations include our wholly-owned subsidiaries, World
Wrestling Federation Entertainment Canada, Inc., Stephanie Music Publishing
Inc., WWF Hotel and Casino Ventures, LLC, TSI Realty Company, Event Services,
Inc., WWF New York, Inc., WWFE Sports, Inc. and our majority owned subsidiary,
Titan/Shane Partnership. WWFE Sports, Inc. owns 50% and currently has operating
control of XFL, LLC which is a new venture established with NBC.

In this Annual Report on Form 10-K, "WWF" refers to World Wrestling
Federation Entertainment, Inc. and its subsidiaries and its predecessors, unless
the context otherwise requires. References to "we," "us," "our" and the
"Company" refer to WWF and its subsidiaries. World Wrestling Federation and the
World Wrestling Federation logo are two of our marks. The 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.



Creative Development and Production

We believe that we have developed the World Wrestling Federation brand into
one of the most recognizable sports entertainment brands in the world. We
believe our brand can be further leveraged to enhance our existing businesses
by:

. Continuing to develop creative story lines, entertaining characters,
exciting live events and televised programming;

. Recruiting, developing and maintaining a roster of highly skilled
athletes who have the physical presence, acting ability and charisma
to develop into popular performers;

. Promoting our brand identity through sponsorships, licensing,
marketing, advertising and other activities featuring our performers;
and

. Providing opportunities for our performers to utilize their talents in
other forms of television programming and film projects.

Our creative team, headed by Vincent McMahon, develops soap opera-like
story lines employing the same techniques that are used by many successful
dramatic television series. 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 Federation Championship titles.

In addition, our creative team 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 120
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 individual's popularity with
our audience, his or her skill level, his or her prior experience and our needs.

2


Our performers are independent contractors who are highly trained and motivated
and portray popular characters such as Stone Cold Steve Austin, The Rock, The
Undertaker, Triple H, Chyna, Kane and Kurt Angle. 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 are invited to participate in our
extensive training program. Under agreements with regional promotors of
wrestling events in, among other places, Southern California, Kentucky, and
Tennessee 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 proprietary 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 satisfactory.

Live and Televised Entertainment

Live events, television shows and pay-per-view programming are our
principal creative and production activities. Revenues from these activities
were approximately $265.5 million, $170.1 million and $92.6 million in fiscal
2000, 1999 and 1998, respectively. For additional segment information, see Note
15 of Notes to Consolidated Financial Statements.


Live Events

Live events are the cornerstone of our business and provide 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 2000, we held approximately 206 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. Attendance at our
live events was 2.5 million, 2.3 million and 1.6 million for the fiscal years
ended April 30, 2000, 1999 and 1998, respectively.

Over this period, 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 and Fleet Center
in Boston.

We promote our live events through a variety of media, including
television, radio, print, and the Internet. Our revenues from the live events
are primarily derived from ticket sales, with prices for most live events
averaging approximately $27 per ticket. At Wrestlemania, our premier event, a
ringside seat, including the souvenir chair, sells for up to $400. 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 for use of the
venue.

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.

Four of our seven television shows are currently carried by the USA Network
("USA"), which is available in approximately 78 million households in the United
States. These include our flagship two-hour production, Raw is War, and Sunday
Night Heat, both of which air in prime time, and Live Wire and Superstars, post-
produced "magazine" type shows that air on Saturday and Sunday mornings, and are
edited with younger viewers in mind. We also produce WWF Metal and WWF Jakked,
which are shown by over 138 broadcast stations across the country in
syndication. Our newest show, WWF SmackDown!, which first aired in August 1999,
is a two-hour prime-time program on the United Paramount Network ("UPN"), which
is available in approximately 86 million households in the United States. We
voluntarily designate the suitability of each of our shows using standard
television industry ratings.

3


We anticipate that, effective September 25, 2000, our five hours of
programming currently airing on USA Network will be broadcast on cable networks
owned by Viacom/CBS. See "New Business Developments" for further information.

According to the Nielsen ratings service, Raw is War was the number one
rated regularly scheduled show on cable television for 32 weeks during our
fiscal year ended April 30, 2000, achieving an average weekly rating of 6.2. In
addition, since its inception, WWF SmackDown! has been the number one rated
weekly program on UPN, achieving an average weekly rating of 4.7. In fiscal
2000, Sunday Night Heat achieved an average weekly Nielsen rating of 3.5. Based
on these ratings, for the year ended April 30, 2000, Raw is War averaged
approximately 6.7 million viewers weekly, Sunday Night Heat averaged
approximately 3.8 million viewers weekly and, since its inception, WWF
SmackDown! averaged 6.6 million viewers weekly.

Our programming is principally directed to audiences aged 18 to 34. In the
past couple of years, it has become particularly popular with two groups that
are highly coveted by advertisers: males aged 18 to 34 and teenagers aged 12 to
17.

We sell advertising time on our television programs to over 110 major
advertisers and sponsors. Advertising time and customized sponsorship programs
are sold directly by our New York, Chicago and Toronto-based sales forces since
we are uniquely positioned to offer comprehensive advertising programs across
all of our media outlets, including our television shows, magazines, Internet
sites, and various live and pay-per-view events. We believe our ability to offer
our advertisers and sponsors such a comprehensive program enables us to maximize
the value of the advertising time in our television programs.

In September 1998, we entered into an arrangement with the USA Network
pursuant to which we have the right to sell a substantial majority of the
advertising inventory in our shows in exchange for our obligation to pay the
network the greater of a fixed percentage of our net advertising revenues or a
minimum guaranteed amount. We anticipate that this agreement will be replaced
with the new agreement with Viacom/CBS. We also have an arrangement with UPN,
pursuant to which we sell a substantial majority of the advertising inventory in
WWF SmackDown!, which began airing in August 1999, in exchange for our
obligation to pay the network the greater of a fixed percentage of our net
advertising revenues, less production costs, or a minimum guaranteed amount.

We also sell sponsorships designed to meet the promotional needs of
advertisers. These 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.
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.

Our state-of-the-art facility in Stamford, Connecticut, which houses our
television and music recording studios and post-production operations, is
staffed by 84 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. We plan to expand our facility and continue to upgrade our
production equipment as necessary.

Pay-Per-View Programming

Each pay-per-view event is a live three-hour event that we intensively
market and promote through our television shows, our Internet sites, and a
variety of other promotional campaigns.

We have been pioneers in both the production and promotion of pay-per-view
events, since our first pay-per-view event, Wrestlemania, in 1985. By fiscal
1996, we increased our domestic pay-per-view offerings to 12 per year. Our
events consistently rank among the pay-per-view programs achieving the highest
number of buys. In fiscal 2000, we had approximately 6.8 million buys for these
events. Wrestlemania 2000 which aired in April 2000 had approximately 0.8
million buys, making it one of the most subscribed pay-per-view programs ever.


4


Pay-per-view buys of our events have more than doubled over the past three
fiscal years, increasing to 6.8 million in fiscal 2000 from 5.4 million in
fiscal 1999 and 2.9 million in fiscal 1998.

Our premier event, Wrestlemania, has a suggested retail price of $39.95 and
each of our other 11 domestic pay-per-view events has a suggested retail price
of $29.95. Consistent with industry practices, we share the revenues with the
cable systems and pay a fee to inDemand, the leading distributor of pay-per-view
programming in the United States.

Currently, pay-per-view is available to approximately 44 million cable
subscribers in the United States, or approximately 55% of total cable
subscribers. inDemand has the capacity to distribute our pay-per-view broadcasts
to approximately 28 million cable subscribers. We use other distribution
channels to reach the balance of such cable subscribers in the United States. We
also have arrangements with DIRECTV and a growing number of other satellite
distributors to further increase the potential subscriber base of our pay-per-
view events.

International

During fiscal 2000, we continued to grow internationally. Our programs are
viewed in over 150 countries and in 11 different languages. We recently signed a
five year contract with BSkyB and a one year contract with Channel 4 in the
United Kingdom to air our programs weekly and signed agreements with Canal Plus
in France and Premiere in Germany. In fiscal 2001, we expect to continue to
expand our reach into other markets around the world.

The BSkyB and Channel 4 contracts have significantly expanded our access to
the UK market. In May 2000, our UK pay-per-view special generated a 65% increase
in buys as compared to our fiscal 2000 UK pay-per-view special. In connection
with our agreement with BSkyB, we are committed to have a minimum of two UK pay-
per-view programs during each fiscal year through April 30, 2003.

Branded Merchandise

We offer a wide variety of branded retail merchandise through both a well-
developed domestic and international licensing program and a comprehensive
direct sales effort. We and our licensees market this merchandise through a
variety of distribution channels, including mass market and specialty retailers,
concession stands at our live events, and our television programs, Internet
sites, magazines and direct mail catalogs.

Our revenues from the sale of our branded merchandise were approximately
$113.8 million, $ 81.4 million and $33.6 million in fiscal 2000, 1999 and 1998,
respectively. For additional segment information, see Note 15 of Notes to
Consolidated Financial Statements.


Licensing and Direct Sales

We have a well-developed domestic and international licensing program using
our World Wrestling Federation mark and logo, copyrighted works and characters
on thousands of retail products, including toys, video games, apparel, and a
wide assortment of other items. As part of our strategic repositioning in 1997,
we began to expand aggressively the number of licensees from less than 50 to
approximately 125. In all of our licensing agreements, we retain creative
approval over the design, packaging and location of, and the 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 with periodic advances. In addition to
our in-house staff, we contract with outside agents to identify, develop and
monitor our licensing arrangements. In fiscal 2000, we estimated retail revenues
from the sale of our branded merchandise through our licensees at approximately
$625.0 million.

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 or our World Wrestling Federation 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 Federation Magazine and

5


RAW Magazine. We also sell merchandise on a direct basis via our television
shows and our wwfshopzone.com Internet site.



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. In addition to producing videos from our
library footage, we create new videos utilizing original footage produced
specifically for this purpose. We create master tapes and contract with a third
party to duplicate and distribute the videos to retailers nationwide, such as
Blockbuster Video, Wal-Mart and Target. Our videos are sold at retail sales
prices ranging from $14.95 to $39.95.

Unit sales in fiscal 2000 of in-house operations were approximately 2.6
million units. Our home video revenues are derived from sales through
approximately 40 unaffiliated distributors and/or direct customers. According to
Billboard Magazine, seven of our home videos ranked among the top 10 best
selling home videos in the "Sports" category as of July 3, 2000.

Music

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. A
third party manufactures, markets and distributes CDs of our music to retailers
nationwide, such as MusicLand, K-Mart, Wal-Mart, Best Buy, and Transworld.

Recently, we hired a president of our newly created record division who
will be responsible for the entire business, including the publishing, marketing
and distribution of our music. During fiscal 2001, we plan to release a rock
compilation, which will be our first album with Columbia Records, a unit of Sony
Music Entertainment. Our long-term business plan is to attract recording artists
to record their music under our own label.

Five albums containing our music have been released. Our two recent
compilations containing WWF music, WWF Aggression, reached number eight on the
Billboard Top 200 Album Chart and achieved gold status, selling approximately
0.5 million units as of July 3, 2000 and WWF The Music Volume IV reached number
four on the Billboard Top 200 Album Chart and achieved platinum status, selling
approximately 1.1 million units as of July 3, 2000.

Publishing

Our publishing operations consist primarily of two monthly magazines, World
Wrestling Federation Magazine and RAW Magazine, which are used to help shape and
complement our 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 combined
newsstand and combined subscription circulations approximated 4.0 million and
2.8 million, respectively, in fiscal 2000.

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.

During fiscal 2000, through our licensee ReganBooks, we released two
hardcover autobiographies of our performers, "The Rock Says..." and "Mankind:
Have a Nice Day". Both books reached number 1 on The New York Times Bestsellers
List. During fiscal 2001, through ReganBooks, we will be releasing
autobiographies on Chyna and the Fabulous Moolah, as well as Mick Foley's
holiday book, a historical look at Wrestlemania and a WWF cookbook.

6


New Media

We utilize the Internet to promote our brand, create a community experience
among our fans, and market and distribute our various products. Through our
network of Internet sites, our fans can purchase our branded merchandise on-
line, obtain our latest news and information, including content that is
accessible only on-line, 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 also offer users the ability to purchase our webcast pay-per-view
events. We promote wwf.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 wwf.com, our network of sites includes,
among others, wwfshopzone.com, stonecold.com, therock.com, wwfdivas.com and
wwfecorpbiz.com.

Our desirable demographics, combined with the volume of traffic on our
network of Internet sites, enable us to attract prospective advertisers for our
web sites. Advertising on our network of sites is priced on a cost per million
basis determined by page impressions and is primarily sold directly by us. In
fiscal 2000, we established a dedicated Internet advertising sales force to
market our sites to current and prospective advertisers. Our Internet
advertising revenues increased to $6.9 million in fiscal 2000 from $0.8 million
in fiscal 1999.

Our Internet presence has been expanding at a rapid rate. We have
experienced a significant increase in the number of people visiting our sites
and purchasing our products via the Internet. In the month of April 2000, our
main site, wwf.com, generated approximately 200 million page views as compared
to 86 million page views in April 1999 and according to PC Data Online, we had
approximately 4.4 million visitors in April 2000 as compared to 1.8 million in
April 1999. The 4.4 million visitors spent an average of 24 minutes on our site.
In April 2000, we were the fourth ranked sports-only web site among all
audiences, behind ESPN, SportsLineUSA and CNNSI; and among males aged 12 to 17,
we were the third ranked entertainment and news information web site.

New Business Development

As part of our strategy to broaden our leadership position in the creation,
production and promotion of our brand and to further leverage our technical and
operating skills and to pursue new brands and complementary businesses, we have
agreed to enter into a strategic alliance with Viacom/CBS, established a new
professional football league called the XFL with NBC and purchased a WWF themed
entertainment complex from our licensee in New York City.

New Television Distribution Agreement

In April 2000, we agreed to enter into a strategic alliance with
Viacom/CBS. This alliance will allow us to broaden our viewing audience by
providing us access to a variety of television networks and other operations
from which we can promote our brand and distribute our programs. Under
this agreement, effective with the television season beginning in September 2000
and continuing through the television season ending September 2005, five hours
of our programming, currently broadcast by USA Network, will be moved to cable
networks owned by Viacom/CBS. Our flagship program, Raw is War as well as our
post produced programs, Live Wire and Superstars, will air on The TNN Network
("TNN") and Sunday Night Heat will air on Music Television ("MTV"). The combined
effect of cross promotion among a number of networks, and the inclusion of our
program on MTV with its large and youthful demographic is expected to continue
to increase exposure of our brand to our target audience. As with our current
television contract, we will sell a substantial majority of the commercial
advertising for the TNN programs. Sales of commercial advertising for Sunday
Night Heat on MTV will be made by the MTV sales force. The contract provides for
lower participation percentages and substantially reduced minimum advertising
guarantees. The contract also significantly increases rights fees paid to us for
these programs and provides additional compensation, including allowing us to
produce up to seven specials a year, at our discretion, for mutually agreed upon
rights fees. The effectiveness of the Viacom/CBS alliance is conditioned upon
our prevailing in USA's appeal of a decision favorable to us in litigation
brought by USA. See "Legal Proceedings."

7


XFL

As part of our strategy to create new brands, we determined that there is a
significant amount of fan interest in a new professional football league, and we
developed a business plan to establish a league called the XFL. To implement the
plan, we have entered into a venture with NBC to own and fund the league.
Commencing in February 2001, the XFL will begin its inaugural season with eight
teams playing a total of ten regular season games, culminating with two play-off
games and the XFL championship game. NBC will broadcast XFL regular season and
championship games. The season will coincide with the end of the National
Football League's ("NFL") regular season, playoffs and Super Bowl, where fan
interest is at its peak. We intend to capitalize on this interest and
established viewing patterns for the NFL. The eight cities selected are Chicago,
New York/New Jersey, Los Angeles, San Jose, Las Vegas, Birmingham, Memphis and
Orlando.

Each of the teams will have an active roster of 38 players and a taxi squad
of seven players. It is anticipated that a substantial portion of the player's
compensation will be derived from bonus money for each game won during the
regular season and a share in the $1.0 million XFL championship bonus pool,
while earning a modest base salary. Total player compensation, including bonus
pools for games won, will be determined on an annual basis by the league office.

On a weekly basis, one game will air during prime-time Saturday nights on
NBC, one game will air during prime-time on Sunday evenings on UPN and a third
game will air at a time and on a cable network that has yet to be determined. We
are currently exploring several possible cable networks to air the third game.
Our intention is to implement rule and other changes designed to produce a
faster paced, hard hitting brand of football. We also plan to have the viewers
more involved in the game by allowing them wider access to the action on and off
the field.

As of July 14, 2000 we have hired approximately 28 employees, which include
five team general managers. Over the next three to four months we expect to have
all of our general managers and head coaches selected as well as our
administrative staff hired. In addition, we have received over 15,000
applications for football players and intend to have our league player draft in
October, with several mini-training camps and a four week training camp in
January 2001.

WWF NY

In January 2000, one of our licensees opened a WWF themed entertainment
complex in Times Square. In light of the high visibility of the complex and its
importance to our brand, in May 2000 we purchased this complex for approximately
$24.5 million and took over management of its operations, believing that we
could further enhance the complex as an entertainment destination. In addition,
we spent approximately $3.7 million on audio/visual equipment for the complex
and expect to make additional capital expenditures of $2.0 million to $3.0
million during fiscal 2001. Our business plan for the entertainment complex is
based on our ability to attract our fans to a specific location and to provide a
high level of entertainment. The complex will provide our fans with interactive
entertainment, including from time to time:

. the production of various daily afternoon television shows in
addition to other television programming,
. the airing of our regularly scheduled TV shows and pay-per-views,
. the backdrop for our post-produced 'magazine shows', Livewire and
Superstars,
. the potential showcase of some of our up and coming rock groups
and acts,
. ongoing appearances by our performers and autograph sessions, and
. the potential of a disco night club.

The 46,500 foot complex includes a stage area, night club, restaurant, full
service bar, and a retail store.

Competition

As an entertainment company, we compete for entertainment and advertising
dollars with other entertainment and leisure activities. Our live events face
competition from professional and college baseball, basketball, hockey and
football, among other activities, in most cities in which we hold those live
events. We also compete for attendance, broadcast audiences and advertising
revenue with a wide range of alternative entertainment and leisure activities.

8


We compete in the sports entertainment business as it relates to wrestling
on a national basis primarily with World Championship Wrestling ("WCW"). We
compete with WCW in all aspects of our business, including viewership, access to
arenas, the sale and licensing of branded merchandise and distribution channels
for our televised programs. We also directly compete to find, hire and retain
talented performers. WCW has substantially greater financial resources than we
do and is affiliated with television cable networks on which WCW's programs are
aired. Notwithstanding, we believe that our sports entertainment product is
highly differentiated from those of our competitors by our creative
capabilities, production values, character development, and story lines. Other
sources of competition in our sports entertainment market are regional promoters
of wrestling events.

With the introduction of the XFL, in addition to non-sports programming, we
will compete for viewership with the NBA and NHL. We will compete for players
with, among others, the CFL (Canadian Football League) and the AFL (Arena
Football League).

In addition to a wide variety of clubs and other entertainment centers in
the New York metropolitan area, WWF NY competes with themed and other
restaurants in the Times Square area. We feel, however, that our loyal fans will
be drawn to the entertainment complex when they are in New York.


Trademarks and Copyrights

We have a portfolio of approximately 1,500 registered and pending
trademarks and service marks worldwide and maintain a catalog of approximately
5,000 registered copyrights on all of our merchandise containing artwork,
including merchandise, music, photographs, books and magazines, videos and
apparel art. The focus of our registration effort is to register marks and works
which embody our trademarked and copyrighted characters portrayed by our
performers and which encompass images, likenesses or names of these characters,
commonly referred to as their trade dress. On an annual basis, we register
approximately 300 copyrights, trademarks and service marks covering all of the
merchandise, publications, home videos, programming and characters featured in
our story lines. We currently own over 350 Internet web domain names and have a
network of developed sites, which contribute to the exploitation of our
trademarks and service marks worldwide. We have the right to use the initials
"WWF" as a servicemark and trademark for our sports entertainment services. In
1994, we entered into an agreement with an unaffiliated third party, WWF-World
Wide Fund for Nature (the "Fund"), a nonprofit environmental conservation
organization, that sets forth limitations with respect to our use of these
initials domestically and internationally. This agreement did permit our use of
the then-current World Wrestling Federation logo anywhere in the world. Our
current World Wrestling Federation logo contains the initials "WWF" in a highly-
stylized way and is a separate and independently recognized commercial
impression. While we believe that the logo is not restricted by the agreement,
the Fund has initiated litigation seeking injunctive relief and damages for
alleged breaches of the agreement. 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, 2000, excluding our XFL and WWF NY operations, we had 362
full-time employees. Of that total, 130 were primarily engaged in organizing and
producing live performances and television and pay-per-view shows, 71 were
primarily engaged in licensing, merchandising and consumer product sales, and
161 were primarily engaged in management and administration. Our in-house
production staff is supplemented with contract personnel on an as needed basis.

To support the XFL, we anticipate hiring approximately 300 employees over
the next three to four months. These new employees include individual team
general managers, head coaches, coaching staffs and other football personnel in
addition to league and team administrative staff. Additionally, we will sign
over 350 football players to contracts after the annual player draft and
subsequent tryout camps in the fall of 2000. As of July 14, 2000, we had 28
full-time XFL employees.

9


As of July 3, 2000, we had approximately 216 full time employees at the WWF
NY complex. Of that total, 26 were engaged in the management and administration
and 190 were hourly employees engaged in the food service and entertainment
aspects of the complex.

We believe that our relationships with our employees are generally
satisfactory. None of our employees is 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, and sales offices in New York, Chicago, and Toronto, Canada.

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 sales offices, our warehouse facilities and our
entertainment complex. While we believe that our facilities are adequate for our
current needs, over the next year we plan to expand our studios, as necessary
and, as a matter of policy, will continue to invest in new equipment in order to
maintain our state-of-the-art facility.

Our principal properties consist of the following:



Expiration Date
Facility (1) Location Square Feet Owned/Leased of Lease
- ------------ -------- ----------- ------------ -------------

Executive offices Stamford, CT 114,300 Owned --
Production studios Stamford, CT 39,900(2) Owned --
Sales office New York, NY 10,075 Leased July 15, 2008
Sales office Toronto, Canada 3,311 Leased April 30, 2004
Sales office Chicago, IL 347 Leased May 31, 2001
Warehouse Trumbull, CT 20,000 Leased August 9, 2004
Entertainment complex New York, NY 46,500 Leased October 31, 2017


(1) Does not include our 193-room hotel and casino in Las Vegas, Nevada, which
is currently classified as an asset held for sale on our Consolidated
Balance Sheet. See Note 6 of Notes to Consolidated Financial Statements.
(2) Excluding 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-one 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. Eleven states require that our performers take an annual physical
examination. In addition to the annual licenses that certain states require, ten
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 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.

10


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

Currently we own a 193-room hotel in Las Vegas, Nevada, which is subject to
applicable regulatory requirements. In addition, we own a daycare facility in
Stamford, Connecticut operated by a third party, which is subject to applicable
state regulatory requirements.

Our WWF NY complex will be 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

On May 13, 1991, William R. Eadie, a former professional wrestler who had
been one of our performers, filed a lawsuit in state court in Wisconsin against
us and Mr. McMahon. The case was removed to the United States District Court for
the District of Connecticut on August 7, 1991. The suit alleges that we breached
an oral agreement to compensate Eadie for the use of his ideas in connection
with a wrestling tag team called "Demolition" and to employ him for life.
Plaintiff is seeking $6.5 million in compensatory damages and unspecified
punitive damages. We have denied any liability and are vigorously contesting
this action. In a similar action filed against us on April 10, 1992 in the
United States District Court for the District of Connecticut, Randy Colley, a
former professional wrestler who had been one of our performers, also alleges
that we breached an oral agreement to compensate him for disclosing his idea for
a wrestling tag team called "Demolition." He is seeking unspecified compensatory
and punitive damages. We have denied any liability and are vigorously defending
this action. Colley's claims were consolidated for trial with those of Eadie. We
believe that both plaintiffs' claims are without merit. On May 20, 1998, a
magistrate judge ruled that the plaintiffs' expert on damages could not testify
at trial. Thereafter, the plaintiffs engaged a second expert on damages, whose
report was filed on August 31, 1999. Given the substance of the second expert's
opinion, as well as continuing developments in the law regarding the relevance
and reliability of expert opinions, it is not possible to predict whether this
second expert's opinion will be admitted into evidence at trial. At a hearing
held on July 12, 2000, the Court allowed plaintiffs to amend their complaint and
allowed us to file a Motion to Dismiss. We believe that an unfavorable outcome
in these actions may have a material adverse effect on our financial condition,
results of operations or prospects.

On June 21, 1996, we filed an action against WCW and Turner Broadcasting
Systems, Inc. ("TBS") in the United States District Court for the District of
Connecticut, alleging unfair competition and infringement of our copyrights,
servicemarks and trademarks with respect to two characters owned by us, Razor
Ramon and Diesel. On May 18, 1998, WCW filed an action against us in the United
States District Court for the District of Connecticut and immediately moved to
consolidate this action with our pending action against WCW and TBS. WCW alleged
that we diluted various marks owned by and/or licensed to WCW by disparaging
those marks and also claims that we engaged in unfair competition when we aired
a "Flashback" series of past World Wrestling Federation performances on USA
Network without disclosing that some of the performers, at the time the series
was subsequently broadcast, were then affiliated with WCW. The parties have
resolved the pending litigation between them to their mutual satisfaction.

On June 15, 1999, members of the family of Owen Hart, a professional
wrestler performing under contract with us, filed suit in state court in
Missouri against us, Vincent and Linda McMahon and nine other defendants,
including the manufacturer of the rigging equipment involved, individual
equipment riggers and the arena operator, as a result of the death of Owen Hart
during a pay-per-view event at Kemper Arena in Kansas City, Missouri on May 23,
1999. The specific allegations against us include the failure to use ordinary
care to provide proper equipment and personnel for the safety of Owen Hart, the
failure to take special precautions when conducting an inherently dangerous
activity, endangerment and the failure to warn, vicarious liability for the
negligence of the named individual defendants, the

11


failure to properly train and supervise, and the provision of dangerous and
unsafe equipment. Plaintiffs seek compensatory and punitive damages in
unspecified amounts. On September 1, 1999, we filed our answer, affirmative
defenses and cross-claims, denying any liability for negligence and other claims
asserted against us. Subsequently, the manufacturing defendants settled, and we
have filed third party petitions against them. We believe that we have
meritorious defenses and intend to defend vigorously against the suit. On
October 1, 1999, we filed a complaint in the United States District Court for
the District of Connecticut, principally seeking a declaratory judgment with
respect to the enforceability of contractual defenses, forum selection clauses,
and other provisions of Owen Hart's contract with us. The defendants have filed
a Motion to Dismiss our complaint for want of jurisdiction which is currently
pending before the court. On February 22, 2000, we filed an Emergency Motion for
Specific Enforcement of and for Summary Judgment on Forum Selection Clause
seeking a legal ruling that any claims belonging to Owen Hart arising out of his
relationship with us be adjudicated in Connecticut. Our motion is currently
pending. We believe that an unfavorable outcome of this suit may have a material
adverse effect on our financial condition, results of operations or prospects.

On September 20, 1999, we were formally 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 Eastern District of New
York in which she alleges sexual harassment under New York law, civil assault
and intentional infliction of emotional distress. Bass's complaint sought $20.0
million in compensatory damages and $100.0 million in punitive damages. On or
about November 9, 1999 we received a Notice of Charge of Discrimination from the
Equal Employment Opportunity Commission (EEOC) filed by Nicole Bass. On January
27, 2000, the EEOC closed its file on her claim. We filed a Motion to Dismiss
the complaint on or about January 10, 2000. Plaintiff filed an amended complaint
on February 28, 2000 withdrawing her stated demand of $100.0 million in punitive
damages as well as her claims of civil assault and intentional infliction of
emotional distress. The amended complaint now seeks relief under Title VII for
Sexual Harassment, Title 42 (S)1981 (a) for gender bias, and for violations of
the New York Human Rights law. We have filed a Motion to Dismiss, Motion to
Strike and Motion for a More Definite Statement to the Amended Complaint. We
believe that the claims are without merit and intend to vigorously defend
against this action. Based on our preliminary review of the allegations and the
underlying facts as we understand them, we do not believe that an unfavorable
outcome in this action will have a material adverse effect on our financial
condition or results of operations or prospects.

On April 17, 2000, WWF-World Wide Fund for Nature 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 uses in the wwf.com and wwfshopzone.com internet domain names and in
contents of various of our web sites; our "scratch" logo; and certain oral uses
in the contexts of foreign broadcasts of our programming, violate the agreement
between the Fund and us. We believe that we have meritorius defenses and intend
to defend the action vigorously. We believe that an unfavorable outcome of this
suit may have a material adverse effect on our financial condition, results of
operations or prospects.

Pursuant to our contract with USA Network, we tendered to USA an offer made
by Viacom/CBS for a strategic alliance agreement, which included certain
transmission rights for our programming. On April 12, 2000, USA Network
purported to match the offer and simultaneously filed an action in the Delaware
Court of Chancery seeking (i) injunctive relief enjoining the contract between
Viacom/CBS and us, and (ii) an award of specific performance requiring us to
enter into a contract with USA Network. After expedited discovery proceedings
and a trial on the merits, the Court ruled in our favor that USA Network had
failed to match Viacom/CBS's offer. USA has filed an appeal of this ruling to
the Delaware Supreme Court and a hearing is scheduled for August 14, 2000.

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.

12


PART II


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


Price Range of Class A Common Stock

Since October 19, 1999, our Class A Common Stock has 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 Nasdaq National Market for
the periods indicated.



Class A Common Stock
--------------------


Fiscal 2000 High Low
----------- ---- ---

First Quarter -- --

Second Quarter, since October 19, 1999 $ 34 $20 5/16

Third Quarter $25 13/16 $14 2/16

Fourth Quarter $19 11/16 $ 9 3/4


There were 5,563 holders of record of Class A common stock and three holders of
record of Class B common stock as of July 3, 2000.

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 and the limitations
imposed by our credit agreements.

On June 12, 2000, we sold to a subsidiary of NBC 2.3 million newly issued
shares of our Class A common stock for an aggregate of $30 million, and on July
28, 2000, we sold the same number of shares to Viacom/CBS for the same purchase
price. Both were exempt from registration under Section 4(2) of the Securities
Act of 1933.

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,
2000. The selected historical consolidated financial data as of April 30, 2000
and 1999 and for the fiscal years ended April 30, 2000, 1999 and 1998 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, 1998, 1997 and 1996 and for the fiscal years ended April 30, 1997 and 1996
have been derived from our audited consolidated financial statements, which have
not been included in this Form 10-K. You should read the selected historical
consolidated financial data in conjunction with our historical consolidated
financial statements, the 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 offering on October 18, 1999,
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 our initial public offering, beginning with our
fiscal year ended April 30, 1988, we elected to be subject to the provisions of

13


Subchapter S of the Internal Revenue Code. Accordingly, since that time, 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 since fiscal 1988 through the date
of our offering relates only to foreign and certain state income taxes for those
states that do not recognize Subchapter S Corporations. Our stockholder was
responsible for the payment of federal and certain state income taxes with
respect to our operations, which have been funded by distributions from our
undistributed earnings account. EBITDA represents income from operations plus
depreciation and amortization and non-cash charges for stock options. 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.

14




Fiscal Year Ended April 30,
--------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
(dollars in thousands, except per share data)

Consolidated Statement of Operations Data:
Net revenues.............................................. $379,310 $251,474 $126,231 $81,863 $85,815
Cost of revenues.......................................... 220,980 147,026 87,969 60,958 55,172
Stock option charges (1).................................. 15,330 -- -- -- --
Selling, general and administrative expenses.............. 71,095 45,521 26,117 25,862 22,934
XFL Start-up costs........................................ 1,079 -- -- -- --
Depreciation and amortization............................. 2,544 1,946 1,676 1,729 2,354
Interest expense.......................................... 2,155 1,125 2,019 782 1,025
Interest and other income, net............................ 7,571 2,117 479 777 (1,026)
-------- -------- -------- ------- -------
Income (loss) before income taxes......................... 73,698 57,973 8,929 (6,691) 3,304
Provision (benefit) for income taxes (2).................. 14,790 1,943 463 (186) 105
-------- -------- -------- ------- -------
Net income (loss)......................................... $ 58,908 $ 56,030 $ 8,466 $(6,505) $ 3,199
======== ======== ======== ======= =======
Earnings (loss) per common share (basic and diluted)(3)... $ 0.94 $ 0.99 $ 0.15 $ (0.11) $ 0.06
======== ======== ======== ======= =======

Unaudited Pro Forma Consolidated Income
Statement Data:
Historical income before income taxes..................... $ 73,698 $ 57,973
Pro forma adjustment other than income taxes (4).......... 427 2,515
-------- --------
Pro forma income before income taxes...................... 73,271 55,458
Pro forma provision for income taxes (5).................. 28,722 22,227
-------- --------
Pro forma net income...................................... $ 44,549 $ 33,231
======== ========
Pro forma earnings per common share (basic and
diluted) (3)............................................. $ 0.71 $ 0.59
======== ========

Consolidated Statement of Cash Flows Data:
Net cash provided by operating activities................. $ 67,610 $ 57,646 $ 6,256 $ 3,628 $ 2,245
Net cash provided by (used in) investing activities (6)... (15,068) (14,634) (1,294) (849) 1,510
Net cash provided by (used in) financing activities....... 3,510 (6,082) 1,974 (1,803) (4,476)




As of April 30,
---------------------------------------

Consolidated Balance Sheet Data: 2000 1999 1998 1997 1996
---- ---- ---- ---- ----
(in thousands)

Cash and cash equivalents (7)............................. $101,779 $ 45,727 $ 8,797 $ 1,861 $ 885
Short-term investments (7)................................ 107,213 -- -- -- --
Property and equipment-net................................ 41,484 28,377 26,177 26,499 27,368
Total assets.............................................. 337,032 130,188 59,594 41,856 46,739
Total long-term debt (including current portion).......... 11,417 12,791 12,394 8,267 7,608
Total stockholders' equity................................ 258,537 72,260 22,697 16,420 25,304




Fiscal Year Ended April 30,
---------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
(dollars in thousands, except per share data)

Other Financial Data:
EBITDA (8)................................................ $ 86,156 $ 58,927 $ 12,145 $ (4,957) $ 7,709
Capital expenditures...................................... 15,068 3,756 1,294 892 343

Other Non-Financial Data:
Number of live events..................................... 206 199 218 199 247
Total attendance.......................................... 2,503,800 2,273,701 1,576,112 1,060,740 931,954
Average weekly Nielsen rating of
Raw is War............................................. 6.2 5.0 3.1 2.4 3.0
WWF SmackDown! (9)..................................... 4.7 -- -- -- --
Pay-per-view buys......................................... 6,848,500 5,365,100 2,936,100 2,252,200 2,831,700



(1) Reflects fiscal 2000 non-cash stock option charges totaling $15.3 million.
In April 2000, we entered into a non-forfeitable agreement with Viacom/CBS
whereby, Viacom/CBS could acquire approximately 2.3 million newly issued
shares of our Class A common stock at $13 per share, resulting in a charge
of $9.3 million. In October 1999,

15


we granted stock options to certain performers who are independent
contractors resulting in a non-cash charge of approximately $6.0 million.
(2) Reflects an overall tax rate of 20.0% for fiscal 2000 due to our Subchapter
S Corporation status through the date of our offering.

(3) Based on a weighted average number of common shares outstanding - basic of
62,806,726 for the fiscal year ended April 30, 2000 and 56,667,000 for the
fiscal years ended April 30, 1999, 1998, 1997 and 1996 and based on a
weighted average number of common shares outstanding - diluted of
62,830,279 for the fiscal year ended April 30, 2000.
(4) This amount gives pro forma effect to the increase in compensation to
Vincent and Linda McMahon pursuant to employment agreements that became
effective as of July 1, 1999. Historically, both executives were paid less
compensation because they benefited from Subchapter S distributions to Mr.
McMahon.
(5) This amount represents a pro forma estimate of our provision for federal,
state and foreign income taxes to give effect to the change in our tax
status to a Subchapter C Corporation for fiscal 1999 and fiscal 2000.
Concurrent with the issuance of shares in our initial public offering, we
terminated our status as a Subchapter S Corporation.
(6) In fiscal 1999, we purchased a 193-room hotel and casino in Las Vegas,
Nevada for approximately $10.9 million. We have since determined that the
ownership and operation of this property is no longer consistent with our
business objectives, and we are currently accounting for it as an asset
held for sale.
(7) Reflects our receipt of the net proceeds from our initial pubic offering
of approximately $179.3 million, after deducting the underwriting discount
and offering expenses.
(8) EBITDA is defined by us as income from operations plus depreciation and
amortization and non-cash charges for stock options.
(9) WWF SmackDown! commenced on August 26, 1999. The average weekly Nielsen
rating is based on 36 programs.

16


Item 7. Management's Discussion and Analysis of Financial Condition

You should read the following discussion in conjunction with the audited
consolidated financial statements and related notes included elsewhere in this
Form 10-K.

General

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 highly successful World Wrestling Federation brand.

We have experienced significant growth in many aspects of our business. We
believe this growth has been driven by a series of management decisions to
reposition our business. Since late 1997, we have intensified our focus on the
development and marketing of our television and pay-per-view programming,
incorporated some operations in house, expanded our branded merchandising
strategy, negotiated more favorable advertising agreements and established a
presence on the Internet.

These new business initiatives, combined with our growing audience appeal,
have led to increasingly higher television ratings and greater pay-per-view
buys, which have heightened demand for our product offerings, including licensed
products, home videos and other branded merchandise.

Our operations have been organized around two principal activities:

. The creation, marketing and distribution of our live and televised
entertainment and pay-per-view programming. Revenues are derived
principally from ticket sales to our live events, purchases of our pay-
per-view programs, the sale of television advertising time and the
receipt of television rights fees.

. The marketing and promotion of our branded merchandise. Revenues are
generated from both royalties from the sale of merchandise by third-party
licensees and the direct sale by us of merchandise, magazines and home
videos.


The consolidated financial statements include the financial statements of our
Company, formerly known as Titan Sports Inc., and our four wholly owned
subsidiaries, our majority owned subsidiary, and our XFL venture. Prior to the
initial public offering, except for our Canadian operations, we were taxed as a
Subchapter S Corporation and we were not subject to federal taxes at the
corporate level. As a result of the initial public offering, our Subchapter S
Corporation status was terminated, and since then we have been a Subchapter C
Corporation, subject to federal, state and foreign income taxes.

Recent Developments

We have recently announced a strategic partnership with NBC to jointly own
and fund a professional football league which will begin play on February 3,
2001. Each party owns 50% of the league, which owns all eight teams. NBC has
committed to broadcast certain regular season and championship games on Saturday
nights in prime-time from February through April. We are currently building the
infrastructure to support this league. Based on current assumptions, we expect
the full capitalization of the venture to be approximately $100.0 million
through December 31, 2002. In accordance with the terms of the agreement, we
will control the operations of the venture and, accordingly, we will consolidate
such operations in our financial statements until such time that NBC converts
its non-voting equity into voting equity. NBC will, however, fund a 50% share of
the venture's cash needs from the inception of the agreement. For income tax
purposes, both NBC and we will allocate the operations equally in accordance
with federal tax law.

On May 3, 2000, we purchased the WWF NY entertainment complex in Times
Square from our licensee for approximately $24.5 million. This amount is in
addition to $3.7 million of audio/visual equipment that we previously purchased
and installed in the complex. We expect to make additional capital expenditures
of $2.0 million to $3.0 million in fiscal 2001. The complex consists of a
retail store, restaurant, full service bar, stage area and night club.

17


On March 1, 2000, we provided notice of cancellation of our contract with
USA Network with respect to four hours of our programming effective September
2000. Our agreement with USA Network with respect to our remaining hour of
programming expires in September 2000. We anticipate that, effective September
2000, our programming will air on cable networks owned by Viacom/CBS. Four
hours of programming, Raw is War, Livewire and Superstars will air on TNN and
the remaining hour, Sunday Night Heat, will air on MTV. In addition, our
SmackDown! program, which airs on UPN, has been extended for a period of 3 years
through September 2003.

On June 12, 2000, NBC purchased approximately 2.3 million newly issued shares
of our Class A common stock at $13 per share for an investment of $30.0 million.
See "Liquidity and Capital Resources."

On April 3, 2000, we entered into a non-forfeitable agreement with Viacom/CBS
whereby Viacom/CBS could acquire approximately 2.3 million newly issued shares
of our Class A common stock at $13 per share. We have accounted for this
agreement under the accounting provisions of EITF 96-18 and, accordingly,
recorded a fourth quarter fiscal 2000 charge of $9.3 milllion. On July 28,
2000, Viacom/CBS purchased approximately 2.3 million shares of our Class A
common stock at $13 per share for an investment of $30.0 million.

Fiscal Year Ended April 30, 2000 compared to Fiscal Year Ended April 30, 1999

Net Revenues. Net revenues were $379.3 million in fiscal 2000 as compared
to $251.5 million in fiscal 1999, an increase of $127.8 million, or 51%. Of this
increase, $95.4 million was from our live and televised entertainment
activities, and $32.4 million was from our branded merchandise activities.

Live and Televised Entertainment. Net revenues were $265.5 million in
fiscal 2000 as compared to $170.1 million in fiscal 1999, an increase of $95.4
million, or 56%. Revenues from the sale of advertising time and sponsorships
increased by $47.8 million in fiscal 2000 as a result of improved ratings for
our shows, the full year impact of our agreement with USA, and a new contract on
broadcast television with the United Paramount Network ("UPN") for WWF
SmackDown!, both of which provided us with the right to sell a substantial
majority of the advertising time in the respective programs. Pay-per-view
revenues increased $25.6 million in fiscal 2000, which resulted from an increase
of 1.4 million in pay-per-view buys to approximately 6.8 million in fiscal 2000
from approximately 5.4 million. As it regularly takes our distributor one year
to finalize the number of buys for each pay-per-view program, included in the
6.8 million buys for fiscal 2000 were 0.8 million buys related to pay-per-view
events in fiscal 1999 not accounted for in that year. Revenues from attendance
at our live events increased by $19.2 million in fiscal 2000 as compared to
fiscal 1999, of which $5.1 million was due to an increase in attendance and
$14.1 million was due to an increase in average ticket prices.

Branded Merchandise. Net revenues were $113.8 million in fiscal 2000 as
compared to $81.4 million in fiscal 1999, an increase of $32.4 million, or 40%.
This increase was due primarily to increases in licensing revenues of $18.1
million, new media revenues of $7.5 million, publishing revenues of $4.0 million
and home video revenues of $2.0 million. The increase in licensing resulted from
the continued success of WWF branded toys by Jakks Pacific, Inc., and the launch
of Wrestlemania 2000 for Nintendo 64 by THQ/Jakks Pacific Inc., the sale of WWF
video games by Acclaim, the release of The Rock and Mankind's autobiographies by
ReganBooks and increased international licensing revenues. The increase in new
media revenues reflects the increased traffic on our Internet web sites and the
addition in fiscal 2000 of a dedicated advertising sales force. The increase in
publishing revenues was due to the increased circulation of our two monthly
magazines to approximately 6.8 million units in fiscal 2000 from approximately
5.8 million units in fiscal 1999. The increase in home video revenues was due
to an increase in international licensing of our home video units and to a
lesser extent, the introduction of DVD units in fiscal 2000.

Cost of Revenues. Cost of revenues was $221.0 million in fiscal 2000 as
compared to $147.0 million in fiscal 1999, an increase of $74.0 million, or 50%.
Of this increase, $59.2 million was from our live and televised entertainment
activities, and $14.8 million was from our branded merchandise activities. Gross
profit as a percentage of net revenues was 42% in both fiscal 2000 and fiscal
1999.

Live and Televised Entertainment. The cost of revenues to create and
distribute our live and televised entertainment was $157.7 million in fiscal
2000 as compared to $98.5 million in fiscal 1999, an increase of $59.2 million,
or 60%. Of the $59.2 million increase, $30.3 million related to the minimum
guarantees associated with the full year impact of our contract with USA Network
and our new contract with UPN, fees paid to our guest celebrities and fees

18


paid to our performers which are directly related to our increased event
revenues. Of the remaining $28.9 million, $7.8 million was due to an increase in
television production costs, due in part to our new UPN program, WWF SmackDown!,
$6.7 million was due to increased arena rental charges and taxes, which are
directly related to our increased event revenues, $4.1 million was due to
increased sponsorship expense and $2.6 million was due to an increase in
pay-per-view and live event advertising costs. Gross profit as a percentage of
net revenues was 41% in fiscal 2000 as compared to 42% in fiscal 1999.

Branded Merchandise. The cost of revenues to market and promote our branded
merchandise was $63.3 million in fiscal 2000 as compared to $48.5 million in
fiscal 1999, an increase of $ 14.8 million, or 31%. The increase in cost of
revenues was due primarily to an increase of $12.6 million related to licensing,
$2.5 million related to publishing, and $1.0 million related to new media which
were all partially offset by a decrease in merchandise. The increase in
licensing was due to a change in product mix which resulted in increased
royalties paid to our performers and $2.9 million incurred in connection with
the operations of our National Hot Rod Association racing team ("NHRA"). The
increase in publishing and new media costs were related to the increased
revenues in these areas. The decrease in merchandise cost of sales was due to
the mix of product sold and a lower provision for obsolete inventory in fiscal
2000. Gross profit as a percentage of net revenues increased to 44% in fiscal
2000 from 40% in fiscal 1999. The increase in gross profit percentage was due
to the new media revenues increase of $7.5 million, which favorably impacted our
overall gross profit percentage, partially offset by the impact of the increased
royalty rate for licensed product and NHRA expenditures.

Stock Option Charges. In accordance with the provisions set forth in the
Statement of Financial Accounting Standard No. 123, "Accounting for Stock-Based
Compensation" and Emerging Issues Task Force Issue No. 96-18, "Accounting for
Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services," we recorded a second quarter
fiscal 2000 non-cash charge of approximately $6.0 million relating to the
granting of stock options to certain performers who are independent contractors.
The options, which vest over three years, were granted in conjunction with our
October 19, 1999 initial public offering. Additionally, in April 2000, we
entered into a non-forfeitable agreement with Viacom/CBS whereby Viacom/CBS
could acquire approximately 2.3 million newly issued shares of our Class A
common stock at $13 per share. We have accounted for this agreement under the
accounting provisions of EITF 96-18 and, accordingly, recorded a fourth quarter
fiscal 2000 charge of $9.3 milllion ($5.7 million, net of tax).


Selling, General and Administrative Expenses. Selling, general and
administrative expenses were $71.1 million in fiscal 2000 as compared to $45.5
million in fiscal 1999, an increase of $25.6 million, or 56%. Of this
increase, $11.7 million was due to an increase in staff related expenses. The
number of full-time personnel as of April 30, 2000 was 343 as compared to 277
full time personnel as of April 30, 1999, an increase of 66 employees. The
increase in personnel was related to the expansion of our business. In
addition, the chairman and the chief executive officer were paid in accordance
with the terms of their employment contracts, which became effective July 1,
1999. Of the remaining $15.0 million increase, $5.9 million related to
increased professional fees and $4.8 million related to increased advertising
and promotion costs. Selling, general and administrative expenses as a
percentage of net revenues was 19% in fiscal 2000 as compared to 18% in fiscal
1999. As of July 3, 2000, excluding our XFL and WWF NY operations, we had 362
full-time employees. In May 2000, we purchased the WWF NY entertainment complex
located in New York City. As of July 3, 2000, we had approximately 216 full
time employees at the complex.

XFL Start-up Costs. XFL start-up costs were $1.1 million in fiscal 2000.
These costs were related to the development and start-up of our professional
football league. As of July 14, 2000, we had 28 full-time XFL employees. To
support the XFL, we anticipate hiring approximately 300 employees over the next
three to four months. These new employees include individual team general
managers, head coaches, coaching staffs and other football personnel in addition
to league and team administrative staff. Additionally, we will sign over 350
football players to contracts after the annual player draft and subsequent
tryout camps in the fall of 2000.

Depreciation and Amortization. Depreciation and amortization expense was
$2.5 million in fiscal 2000 as compared to $1.9 million in fiscal 1999. The
increase of $0.6 million reflects the increased spending on capital projects.

Interest Expense. Interest expense was $2.2 million in fiscal 2000 as
compared to $1.1 million in fiscal 1999. The increase of $1.1 million was due to
interest related to the $32.0 million, 5% interest bearing note issued to Mr.

19


McMahon on June 29, 1999 for estimated federal and state income taxes payable by
him resulting from our Subchapter S status. As of April 30, 2000, we paid the
note in full, plus an additional $8.4 million, which represented the estimated
income tax payments required by the applicable federal and state taxing
authorities.

Interest and Other Income, Net. Interest and other income, net was $7.6
million in fiscal 2000 as compared to $2.1 million in fiscal 1999. The increase
of $5.5 million was primarily due to increased interest income resulting from
significantly higher cash and short term investment balances in fiscal 2000.

Provision for Income Taxes. Concurrent with our initial public offering, our
tax status was changed from a Subchapter S Corporation to a Subchapter C
Corporation. As a Subchapter C Corporation, we are directly responsible for all
federal and state income taxes. For the year ended April 30, 2000, we were taxed
on our income at an effective rate of approximately 20% based upon the number of
days during the fiscal year that we were a Subchapter S Corporation and the
number of days we were a Subchapter C Corporation. As a Subchapter S Corporation
we had to provide for only certain state and foreign income taxes. The
liability for federal, and certain state income taxes was the responsibility of
our then sole stockholder. As a consequence to this change in tax status, our
provision for income taxes substantially increased to $14.8 million in fiscal
2000 as compared to $1.9 million in fiscal 1999. On a pro forma basis, as a C
Corporation, federal, state, and foreign income taxes would have been $28.7
million and $22.2 million for fiscal 2000 and 1999, respectively.


Fiscal Year Ended April 30, 1999 compared to Fiscal Year Ended April 30, 1998

Net Revenues. Net revenues were $251.5 million in fiscal 1999 as compared
to $126.2 million in fiscal 1998, an increase of $125.3 million, or 99%. Of this
increase, $77.5 million was from our live and televised entertainment
activities, and $47.8 million was from our branded merchandise activities.

Live and Televised Entertainment. Net revenues were $170.1 million in
fiscal 1999 as compared to $92.6 million in fiscal 1998, an increase of $77.5
million, or 84%. This increase was primarily attributable to an increase in pay-
per-view revenues of $37.1 million, which resulted from an increase in pay-per-
view buys to approximately 5.4 million from approximately 2.9 million, or 86%.
Virtually all of our 12 pay-per-view events contributed to this increase.
Revenues from attendance at our events increased by $20.8 million in fiscal 1999
primarily as a result of an increase in attendance to approximately 2.3 million
in fiscal 1999 from approximately 1.6 million in fiscal 1998, or 44%, and an
increase in average ticket prices. Revenues from the sale of advertising time
and sponsorships increased by $17.9 million in fiscal 1999 as a result of
improved ratings for our shows and new contracts with the USA Network in July
1998 and September 1998, which provided us with the right to sell a substantial
majority of the advertising time in our programs.

Branded Merchandise. Net revenues were $81.4 million in fiscal 1999 as
compared to $33.6 million in fiscal 1998, an increase of $47.8 million, or 142%.
This increase was due primarily to increases in licensing revenues of $17.8
million, home video revenues of $17.7 million, publishing revenues of $5.1
million and direct sale merchandise revenues of $3.1 million. The increase in
licensing revenues resulted from heightened demand for our branded products,
particularly in the apparel and toy categories. Additionally, we increased the
number of our licensees in an effort to broaden our product offerings. In March
1998, we terminated a licensing agreement and began to produce and distribute
home videos in-house. The increase in home video revenues was due to the full
year impact of this decision and, to a lesser extent, an increase in the number
of titles offered for sale in fiscal 1999. Licensing revenues related to home
video sales in fiscal 1998 were insignificant. The increase in publishing
revenues was due to increased newsstand sales and increased sales of
subscriptions. The increase in direct sale merchandise revenues was primarily
due to an increase of $5.1 million resulting from increased attendance at our
events, partially offset by a decrease of $0.8 million resulting from a decline
in per capita spending.

Cost of Revenues. Cost of revenues was $147.0 million in fiscal 1999 as
compared to $88.0 million in fiscal 1998, an increase of $59.0 million, or 67%.
Of this increase, $31.0 million was from our live and televised entertainment
activities, and $28.0 million was from our branded merchandise activities. Gross
profit as a percentage of net revenues increased to 42% in fiscal 1999 from 30%
in fiscal 1998.

Live and Televised Entertainment. The cost of revenues to create and
distribute our live and televised entertainment was $98.5 million in fiscal 1999
as compared to $67.5 million in fiscal 1998, an increase of $31.0 million,

20


or 46%. Of the $31.0 million increase, $19.4 million related to our new
contracts with the USA Network in which we are obligated to pay the greater of a
fixed percentage of our net advertising revenues or a minimum guaranteed amount,
and fees paid to our talent which are directly related to our increased
revenues. The remaining increase was due primarily to a $4.3 million increase in
arena rental charges, which are directly related to our increased revenues from
event attendance, a $3.6 million increase in pay-per-view distribution fees,
which are directly associated with our increase in pay-per-view revenues, and a
$3.3 million increase in advertising and promotion costs. Gross profit as a
percentage of net revenues increased to 42% in fiscal 1999 from 27% in fiscal
1998. The increase in gross profit resulted from increased revenues from higher
margin areas of pay-per-view programming and television advertising and, to a
lesser extent, increased attendance and higher average ticket prices at our
events.

Branded Merchandise. The cost of revenues to market and promote our branded
merchandise was $48.5 million in fiscal 1999 as compared to $20.5 million in
fiscal 1998, an increase of $28.0 million, or 137%. Gross profit as a percentage
of net revenues increased to 40% in fiscal 1999 from 39% in fiscal 1998. The
increase in cost of revenues was due primarily to an increase of $11.7 million
related to the full year impact in fiscal 2000 of our home video and new media
operations, and increased costs of $13.7 million resulting directly from the
increase in revenues from our licensing and merchandise activities. The increase
in gross profit was due to the commencement in March 1998 of the sale of home
video products on a direct basis. This was partially offset by an increase in
direct sale merchandise costs related to our concession sales.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses, which include corporate overhead expenses, were $45.5
million in fiscal 1999 as compared to $26.1 million in fiscal 1998, an increase
of $19.4 million, or 74%. The increase was due primarily to an increase in the
number of full-time personnel by 58 persons. This increase reflects the
development and implementation of our home video and new media businesses, the
expansion of our advertising sales force to support our new contracts with the
USA Network, an increase in the number of personnel involved in the production
of our televised programming, and an increase in administrative personnel.
Selling, general and administrative expenses as a percentage of net revenues
were 18% in fiscal 1999 as compared to 21% in fiscal 1998.

Depreciation and Amortization. Depreciation and amortization expense was
$1.9 million in fiscal 1999 as compared to $1.7 million in fiscal 1998, an
increase of $0.2 million.

Interest Expense. Interest expense was $1.1 million in fiscal 1999 as
compared to $2.0 million in fiscal 1998. The decrease of $0.9 million was
primarily the result of lower average outstanding borrowings during fiscal 1999.

Interest and Other Income, Net. Interest and other income, net was $2.1
million in fiscal 1999 as compared to $0.5 million in fiscal 1998. The increase
of $1.6 million was primarily due to increased interest income resulting from
significantly higher cash balances in fiscal 1999.

Provision for Income Taxes. As a Subchapter S corporation, we had to provide
only for some state and foreign income taxes as our principal stockholder was
responsible for the payment of federal and certain other state income taxes in
these years. Income taxes were $1.9 million in fiscal 1999 as compared to $0.5
million in fiscal 1998. Upon the termination of our Subchapter S corporation
election, we became directly responsible for paying federal, state and foreign
income taxes. After giving effect to our termination of our Subchapter S
corporation election, on a pro forma basis, federal, state and foreign income
taxes would have been $22.2 million in fiscal 1999, which represents an
effective income tax rate of 40%.

Liquidity and Capital Resources

During fiscal 2000, our cash position was favorably impacted by our sale of
11.5 million shares in our initial public offering in October 1999, and the
continued success of our WWF brand of entertainment. We generated $67.6 million
from operations in fiscal 2000. In June 2000, we sold 2.3 million newly issued
shares of our Class A common stock to NBC for $30.0 million and in July 2000, we
sold 2.3 million newly issued shares of our Class A common stock to Viacom/CBS
for $30.0 million. On May 3, 2000, we purchased the WWF NY entertainment complex
for $24.5 million. In fiscal 2001, we expect to invest $15.0 million to $20.0
million for our share of the XFL's start up costs, its first season of
operations and its capital expenditures. Capital expenditures for fiscal 2001
are expected to be $32.0 million, exclusive of the XFL and WWF NY.

21


Cash flows from operating activities for the fiscal years ended April 30,
2000, 1999, and 1998 were $67.6 million, $57.6 million and $6.2 million,
respectively. This improvement primarily reflects the increase in operating
income that we experienced in fiscal 2000 and fiscal 1999. Working capital,
consisting of current assets less current liabilities, was $219.8 million as of
April 30, 2000 and $52.7 million as of April 30, 1999.

Cash flows used in investing activities for the fiscal years ended April 30,
2000, 1999 and 1998 were $15.1 million, $14.6 million and $1.3 million,
respectively. The purchase of property and equipment of $15.1 million in fiscal
2000 was related to the purchase of equipment for our television and post
production facility, equipment for WWF NY, and the remodeling of our executive
offices in Stamford, Ct. in order to accommodate our increase in personnel. The
purchase of property and equipment in fiscal 1999 principally reflects the $10.9
million acquisition of a 193-room hotel and casino facility in Las Vegas,
Nevada, which is currently classified as an an asset held for sale on our
Consolidated Balance Sheet. Capital expenditures for fiscal 2001, excluding the
XFL and WWF NY, are expected to be $32.0 million, which includes the renovation
of our television facility and the expansion of our New Media business.

Cash flows provided by (used in) financing activities for the fiscal years
ended April 30, 2000, 1999 and 1998 were $3.5 million, $(6.1) million, and $2.0
million, respectively. In connection with the initial public offering, we
received net proceeds, after deducting commissions and fees and expenses, of
$179.3 million for the sale of 11,500,000 shares of Class A common stock at an
offering price of $17.00 per share. As of April 30, 2000 we had approximately
$107.0 million invested in short term corporate and government obligations. We
made Subchapter S Corporation distributions to Mr. McMahon in the fiscal years
ended April 30, 2000, 1999 and 1998 of $67.5 million, $6.5 million, and $2.2
million, respectively. The increase in S distributions in fiscal 2000 was due to
the distribution made to Mr. McMahon on June 29, 1999, of cash in the amount of
$25.5 million out of our previously earned and undistributed earnings, which had
been fully taxed at the stockholder level. On June 29, 1999, we made an S
Corporation distribution to our then sole stockholder in the form of an
unsecured, 5% interest-bearing note in the principal amount of $32.0 million due
April 10, 2000. The note represented estimated federal and state income taxes
payable by our then sole stockholder with respect to our taxable income for
fiscal 1999 and estimated taxable income for the period May 1, 1999 through
October 18, 1999 which represents the portion of our taxable earnings for fiscal
2000 allocated to the S Corporation. As of April 30, 2000, we paid the $32.0
million note in full plus an additional $8.4 million. The additional $8.4
million represented additional tax liabilities of the then sole stockholder due
to a revision of estimated taxes payable for the tax periods described above.
To the extent the portion of our fiscal 1999 and 2000 actual earnings allocated
to the S Corporation exceeds those earnings used in the calculation of estimated
income taxes payable by our then sole stockholder, we may need to make an
additional distribution to our stockholders of record as of July 3, 1999 which
is expected to be paid no later than August 15, 2000.

On June 12, 2000, we formed a venture with NBC to own and fund the XFL, a new
professional football league which is scheduled to begin its first season in
February 2001. We are currently building the infrastructure to support this
league. As of July 3, 2000 we made a cash capital contribution of $2.5 million
and NBC made a cash capital contribution of $2.5 million. Both NBC and we will
periodically advance required funds to the venture on a 50/50 basis. Based on
current assumptions we expect the full capitalization to be approximately $100.0
million through December 31, 2002. In accordance with the terms of our agreement
with NBC, until such time that NBC converts its non-voting equity into voting
equity, we will control and manage the operations of the venture and
accordingly, we will consolidate such operations.

On June 12, 2000, NBC purchased approximately 2.3 million newly issued shares
of our Class A common stock at $13 per share for a total investment of $30.0
million. As a result of this stock purchase, we will record a non-cash charge
of $10.7 million which will be amortized over thirty months, commencing in the
first quarter of fiscal 2001.

On May 3, 2000, we purchased the WWF NY entertainment complex in Times
Square from our licensee, for approximately $24.5 million. This amount is in
addition to $3.7 million of audio/visual equipment that we previously purchased
and installed in the complex. We expect to make an additional $2.0 million to
$3.0 million in capital expenditures in fiscal 2001. The complex consists of a
retail store, restaurant, full service bar, stage area and night club.

In April 2000, we agreed to enter into a strategic alliance with Viacom/CBS.
The effectiveness of the Viacom/CBS alliance is conditioned upon our prevailing
in USA's appeal of a decision favorable to us in litigation brought by USA as
discussed above in Legal Proceedings.

22


On April 3, 2000, we entered into a non-forfeitable agreement with Viacom/CBS
whereby Viacom/CBS could acquire approximately 2.3 million newly issued shares
of our Class A common stock at $13 per share. On July 28, 2000 Viacom/CBS
purchased approximately 2.3 million shares of our Class A common stock at $13
per share for a total investment of $30.0 million.

On December 12, 1997, we entered into a mortgage loan agreement with GMAC
Commercial Mortgage Corp., which was subsequently assigned to Citicorp Real
Estate, Inc., under which we borrowed $12.0 million at an annual interest rate
of 7.6% to be repaid in monthly installments over 15 years. This term loan is
collateralized by our executive offices and production studio, both of which are
located in Stamford, Connecticut. Additional collateral includes all leases,
agreements and other items relating to our mortgaged property and its operation.
The term loan may not be prepaid in whole or in part prior to and through
December 31, 2005. Thereafter, the term loan may be prepaid in whole with the
payment of a premium. As of July 3, 2000, the outstanding principal amount of
the term loan was $10.8 million.

On December 22, 1997, we entered into a $10.0 million revolving credit
agreement with IBJ Schroder Business Credit Corporation that expires on December
21, 2000. We intend to seek modifications to our credit agreement to increase
the amounts available to borrow on more favorable terms and conditions and
extend the length of the term. We can give no assurance that we will be able to
negotiate acceptable modifications to the revolving credit agreement. Interest
on outstanding amounts are calculated at the alternate base rate plus 0.5%, or
at the Eurodollar rate plus 2.5%, based upon the availability of qualifying
receivables which collateralize the loan. In addition to qualifying receivables,
this revolving credit agreement is collateralized by our general intangible
property, excluding intellectual property. As of July 3, 2000, no amounts were
outstanding under the revolving portion of this credit agreement. We have
received a waiver to reflect the termination of our Subchapter S corporation
status.

During July 1998, we amended the revolving credit agreement to allow us to
make a capital expenditure loan. Pursuant to this amendment, we borrowed $1.6
million at the IBJ swap rate plus 3% (8.92% at July 3, 2000) to be repaid in 29
monthly installments. The studio equipment purchased with the proceeds of the
loan, as well as the other collateral under the revolving credit agreement,
collateralizes the term loan. As of July 3, 2000, the outstanding principal
amount of the loan was $0.4 million.

We have entered into various contracts under the terms of which we are
required to make guaranteed payments, including:

. Performance contracts with all of our performers, some of which
provide for future minimum guaranteed payments.

. Television distribution agreements with the USA Network, UPN and the
proposed television distribution agreement with Viacom/CBS that
provide for the payment of the greater of a fixed percentage of the
revenues from the sale of television advertising time or an annual
minimum payment. The agreement with USA Network covers five hours of
our programming and expires in September 2000 at which point we
anticipate that our programming will be broadcast on cable networks
owned by Viacom/CBS. Our agreement with Viacom/CBS will expire in
September 2005. Our agreement with the UPN covers two hours of
programming every week and expires in September 2003. The
effectiveness of the Viacom/CBS alliance is conditioned upon our
prevailing in USA's appeal of a decision favorable to us in litigation
brought by USA as discussed above in Legal Proceedings.

. Various operating leases related to our sales offices and warehouse
space.

. Employment contract with Vincent K. McMahon, which is for a seven year
term and employment contract with Linda E. McMahon which is for a four
year term.

. Employment contracts with some of our employees, the terms of which
are generally for a period of two to three years.

23


For the next three fiscal years, our aggregate minimum payment obligations
under these contracts, including the expected commitment with Viacom/CBS and the
recent extension of our UPN agreement through September 2003, is $49.6 million,
$41.8 million, and $37.6 million for fiscal 2001, 2002 and 2003, respectively.
We anticipate that all of these obligations will be satisfied out of cash flows
from operating activities.

We believe that cash generated from operations, together with amounts
available under the revolving credit agreement, our proceeds from the sale of
approximately 2.3 million newly issued shares of our Class A common stock to NBC
and to Viacom/CBS and from existing cash and short-term investments, will be
sufficient to meet our working capital, capital expenditure and cash needs for
our strategic investments over the next twelve months. However, during such
period or thereafter, depending on the size and number of the projects and
investments related to our growth strategy, we may require the issuance of debt
and/or additional equity securities.


Seasonality

Our operating results are not materially affected by seasonal factors,
however, because we operate on a fiscal calendar, the number of pay-per-view
events recorded in a given quarter may vary. In addition, revenues from our
licensing and direct sale of consumer products, including through our catalogs,
monthly magazines and Internet sites, may vary from period to period depending
on the volume and extent of licensing agreements and marketing and promotion
programs entered into during any particular period of time, as well as the
commercial success of the media exposure of our characters and brand. The timing
of these events as well as the continued introduction of new product offerings
and revenue generating outlets can and will cause fluctuation in quarterly
revenues and earnings.

Our operating results from WWF NY are expected to be higher in the summer
months and around the holidays due to tourism and school vacations.

Our operating results from the XFL will be seasonal with the playing season
beginning in February and ending in April. Almost all of our live game,
television, and advertising revenues will be generated during these three
months. Cost of revenues associated with these revenue streams will also occur
during the season. Our licensing, merchandise, and new media revenues and cost
of revenues will occur throughout the entire year, but are expected to be the
highest during the season.

Inflation

During the past three fiscal years, inflation has not had a material effect on
our business.


Recent Pronouncements

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, as amended by SFAS No. 137 "Accounting
for Derivative Instruments and Hedging Activities." The statement requires the
recognition of all derivatives as either assets or liabilities in the balance
sheet and the measurement of those instruments at fair value, and based on the
amendment, effective for all fiscal quarters of all fiscal years beginning after
June 15, 2000, which, therefore, would require us to adopt such statement on May
1, 2001. Although our involvement in derivative type instruments is limited, the
adoption of this statement would require us to reflect on our balance sheet the
estimated fair value of warrants that we received in connection with some
license agreements. See Note 16 of Notes to Consolidated Financial Statements.

In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin No.101 ("SAB 101"), Revenue Recognition in Financial
Statements". SAB 101 summarizes certain of the SEC's views in applying generally
accepted accounting principles to revenue recognition in financial statements.
On June 26, 2000, the SEC issued SAB 101B to defer the effective date of
implementation of SAB 101 until no later than the fourth fiscal quarter of
fiscal years beginning after December 15, 1999. We are required to adopt SAB 101
by the quarter ending April 30, 2001. We are evaluating whether SAB 101 will
cause any change in our revenue recognition policies and procedures.

24


Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for certain statements that are forward-looking and are not based on historical
facts. When used in this Annual Report on Form 10-K, the words "may," "will,"
"could," "anticipate," "plan," "continue," "project," "intend", "estimate",
"believe", "expect" and similar expressions are intended to identify forward-
looking statements, although not all forward-looking statements contain such
words. These statements relate to our future plans, objectives, expectations and
intentions and are not historical facts and accordingly involve known and
unknown risks and uncertainties and other factors that may cause the actual
results or the performance by us to be materially different from future results
or performance expressed or implied by such forward-looking statements. The
following factors, among others, could cause actual results to differ materially
from those contained in forward-looking statements made in this Annual Report on
Form 10-K and in oral statements made by our authorized officers: (i) our
failure to continue to develop creative and entertaining programs and events
would likely lead to a decline in the popularity of our brand of entertainment,
(ii) our failure to retain or continue to recruit key performers could lead to a
decline in the appeal of our story lines and the popularity of our brand of
entertainment, (iii) the loss of the creative services of Vincent McMahon could
adversely affect our ability to create popular characters and story lines, (iv)
our failure to maintain or renew key agreements could adversely affect our
ability to distribute our television and pay-per-view programming, (v) we may
not be able to compete effectively, especially against competitors with greater
financial resources or marketplace presence, (vi) we may not be able to protect
our intellectual property rights which could negatively impact our ability to
compete in the sports entertainment market, (vii) a decline in the general
economic conditions or in the popularity of our brand of sports entertainment
could adversely impact our business, (viii) our insurance may not be adequate to
cover liabilities resulting from accidents or injuries, such as the Own Hart
accident, (ix) we may be prohibited from promoting and conducting our live
events if we do not comply with applicable regulations, (x) we could incur
substantial liabilities, or be required to conduct certain aspects of our
business differently, if pending or future material litigation is resolved
unfavorably, (xi) the failure of our new complementary businesses, including our
professional football league, the XFL, and our entertainment complex, WWF NY and
other new or complementary businesses into which we may expand in the future
could adversely affect our existing businesses, (xii) through his beneficial
ownership of a substantial majority of our Class B common stock, our controlling
stockholder can exercise significant influence over our affairs, and his
interests could conflict with the holders of our Class A common stock, and
(xiii) a substantial number of shares will be eligible for future sale by our
current majority stockholder, and the sale of those shares could lower our stock
price. The forward-looking statements speak only as of the date of this Annual
Report on Form 10-K and undue reliance should not be placed on these statements.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

No information with respect to market risk has been included as it has not
been material to our financial condition or results of operations.


Item 8. Consolidated Financial Statements and Schedule

The information required by this item is set forth in the Consolidated
Financial Statements filed with this report.



Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures

Not Applicable.

25


PART III

The information required by Part III (Items 10-13) is incorporated herein by
reference to the captions "Election of Directors", "Executive Compensation" and
"Security Ownership of Cetain Beneficial Owners and Management" in our
definitive proxy statement for our 2000 Annual Meeting of Stockholders.

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a) The following documents are filed as a part of this report:

1. Financial Statements and Schedule: See index to Financial Statements on
page F-1 of this Report.

2. Exhibits:

Exhibit No. Description of Exhibit
- ----------- ----------------------


3.1 Amended and Restated Certificate of Incorporation of World
Wrestling Federation Entertainment, Inc. (Incorporated by
reference to Exhibit 3.2 to our Registration Statement on Form S-
1 (No. 333-84327)).

3.2 Amended and Restated By-laws of World Wrestling Federation
Entertainment, Inc. (Incorporated by reference to Exhibit 3.4 to
our Registration Statement on Form S-1 (No. 333-84327)).


10.1 Form of 1999 Long -Term Incentive Plan. (Incorporated by
reference to Exhibit 10.1 to our Registration Statement on Form
S-1 (No. 333-84327)).*

10.2 Employment Agreement with Vincent K. McMahon. (Incorporated by
reference to Exhibit 10.2 to our Registration Statement on Form
S-1 (No. 333-84327)).*

10.3 Booking Contract with Vincent K. McMahon, dated February 15, 2000
(filed herewith).*

10.4 Employment Agreement with Linda E. McMahon. (Incorporated by
reference to Exhibit 10.3 to our Registration Statement on Form
S-1 (No. 333-84327)).*

10.5 Booking Contract with Linda E. McMahon dated February 15, 2000
(filed herewith).*

10.6 Employment Agreement between Titan Sports Inc. and August J.
Liguori, dated as of August 24, 1998. (Incorporated by reference
to Exhibit 10.4 to our Registration Statement on Form S-1 (No.
333-84327)).

10.7 Employment Agreement with Stuart C. Snyder (filed herewith).*

10.8 License Agreement between the USA Network and Titan Sports Inc.,
dated as of July 2, 1998. (Incorporated by reference to Exhibit
10.5 to our Registration Statement on Form S-1 (No. 333-84327).
(1)

10.9 Agreement between the USA Network and Titan Sports Inc., dated as
of September 1, 1998. (Incorporated by reference to Exhibit 10.6
to our Registration Statement on Form S-1 (No. 333-84327).

10.10 License Agreement between Titan Sports Inc. and inDemand,
formerly known as Viewer's Choice L.L.C., dated as of January 20,
1999. (Incorporated by reference to Exhibit 10.7 to our
Registration Statement on Form S-1 (No. 333-84327)). (1)

26


10.11 License Agreement between United Paramount Network and World
Wrestling Federation Entertainment, Inc., dated as of August 26,
1999. (Incorporated by reference to Exhibit 10.8 to our
Registration Statement on Form S-1 (No. 333-84327)). (2)

10.12 Limited Liability Company Agreement, dated June 12, 2000, between
WWFE Sports, Inc. and NBC-XFL Holding, Inc. (filed herewith).

10.13 Registation Rights Agreement, dated June 12, 2000, by and between
NBC-WWFE Holding, Inc. and the Registrant (filed herewith).

10.14 Registration Rights Agreement, dated July 28, 2000, by and
between Viacom Inc. and the Registrant (filed herewith).

10.15 Revolving Credit and Security Agreement between Titan Sports Inc.
and IBJ Schroder Business Credit Corporation, dated as of
December 22, 1997. (Incorporated by reference to Exhibit 10.9 to
our Registration Statement on Form S-1 (No. 333-84327)).

10.16 Amendment to Revolving Credit and Security Agreement between
Titan Sports Inc. and IBJ Schroder Business Credit Corporation,
dated as of June 9, 1998. (Incorporated by reference to Exhibit
10.10 to our Registration Statement on Form S-1 (No. 333-84327)).

10.17 Open End Mortgage Deed, Assignment of Rents and Security
Agreement between TSI Realty Company and GMAC Commercial Mortgage
Corp. (assigned to Citicorp Real Estate, Inc.), dated as of
December 12, 1997. (Incorporated by reference to Exhibit 10.11 to
our Registration Statement on Form S-1 (No. 333-84327)).

10.18 Promissory Note issued by TSI Realty Company to GMAC Commercial
Mortgage Corp. (assigned to Citicorp Real Estate, Inc.), dated as
of December 12, 1997. (Incorporated by reference to Exhibit 10.12
to our Registration Statement on Form S-1 (No. 333-84327)).

10.19 Environmental Indemnity Agreement among TSI Realty Company, Titan
Sports Inc. and GMAC Commercial Mortgage Corp. (assigned to
Citicorp Real Estate, Inc.), dated as of December 12, 1997.
(Incorporated by reference to Exhibit 10.13 to our Registration
Statement on Form S-1 (No. 333-84327)).

10.20 Assignment of Leases and Rents between TSI Realty Company and
GMAC Commercial Mortgage Corp. (assigned to Citicorp Real Estate,
Inc.), dated as of December 12, 1997. (Incorporated by reference
to Exhibit 10.14 to our Registration Statement on Form S-1 (No.
333-84327)).

10.21 Form of Tax Indemnification Agreement among World Wrestling
Federation Entertainment, Inc., Stephanie Music Publishing, Inc.,
Vincent K. McMahon and the Vincent K. McMahon Irrevocable Deed of
Trust, dated as of June 30, 1999. (Incorporated by reference to
Exhibit 10.15 to our Registration Statement on Form S-1 (No. 333-
84327)).

10.22 Agreement between WWF-World Wide Fund for Nature and Titan
Sports, Inc. dated January 20, 1994. (Incorporated by reference
to Exhibit 10.16 to our Registration Statement on Form S-1 (No.
333-84327)).


21.1 List of Significant Subsidiaries. (Incorporated by reference to
Exhibit 21.1 to our Registration Statement on Form S-1 (No. 333-
84327)).


23.1 Consent of Deloitte & Touche LLP (filed herewith).

27


27.1 Financial data schedule for the fiscal year ended April 30, 2000
(filed herewith).

________________________________________________________________________________


* Indicates management contract or compensatory plan or arrangement.

(1) Certain portions of this exhibit have been omitted based upon a request for
confidential treatment filed by the Company with the Secretary of the Commission
on August 25, 1999, as amended on October 8, 1999. The omitted portion of this
exhibit has been separately filed with the Commission.


(2) Certain portions of this exhibit have been omitted based upon a request for
confidential treatment filed by the Company with the Secretary of the Commission
on September 14, 1999 as amended on October 8, 1999. The Omitted portion of this
exhibit has been separately filed with Commission.

(b) Reports on Form 8-K:

The Registrant filed a Report on Form 8-K, dated April 4, 2000, under Item 5-
Other Events.

28


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.


World Wrestling Federation Entertainment, Inc.
(Registrant)


Dated: July 28, 2000 By:/s/ August J. Liguori
-----------------------------------
August J. Liguori
Executive Vice President, Chief Financial
Officer and Treasurer

Dated: July 28, 2000 By:/s/ Frank G. Serpe
-----------------------------------
Frank G. Serpe
Senior Vice President, Finance and
Chief Accounting Officer



Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.



Signature Title or Capacity Date
--------- ----------------- ----

/s/ Vincent K. McMahon Chairman of the Board of Directors July 28, 2000
- ------------------------------
Vincent K. McMahon

/s/ Linda E. McMahon Chief Executive Officer and Director July 28, 2000
- ------------------------------
Linda E. McMahon

/s/ Lowell P. Weicker Jr. Director July 28, 2000
- ------------------------------
Lowell P. Weicker Jr.

/s/ David Kenin Director July 28, 2000
- ------------------------------
David Kenin

/s/ Joseph Perkins Director July 28, 2000
- ------------------------------
Joseph Perkins

/s/ Stuart C. Snyder President, Chief Operating Officer and Director July 28, 2000
- ------------------------------
Stuart C. Snyder

/s/ August J. Liguori Executive Vice President, Chief Financial Officer,
- ------------------------------ Treasurer and Director July 28, 2000
August J. Liguori


29


WORLD WRESTLING FEDERATION ENTERTAINMENT, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



Page
----

Independent Auditors' Report......................................................................................... F-2

Consolidated Balance Sheets as of April 30, 2000 and 1999............................................................ F-3

Consolidated Statements of Income for the years ended April 30, 2000, 1999, and 1998................................. F-4

Consolidated Statements of Changes in Stockholders' Equity for the years ended April 30, 2000, 1999 and 1998......... F-5

Consolidated Statements of Cash Flows for the years ended April 30, 2000, 1999 and 1998.............................. F-6

Notes to Consolidated Financial Statements........................................................................... F-7

Schedule II - Valuation and Qualifying Accounts...................................................................... F-23


F-1


INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of World Wrestling Federation
Entertainment Inc.

We have audited the accompanying consolidated balance sheets of World Wrestling
Federation Entertainment, Inc. as of April 30, 2000 and 1999 and the related
consolidated statements of income, changes in stockholders' equity and cash
flows for each of the three years in the period ended April 30, 2000. Our audits
also included the financial statement schedule listed in the index at Item 14.
These financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and financial statement schedule based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the consolidated financial position of the Company as of
April 30, 2000 and 1999 and the consolidated results of its operations and its
consolidated cash flows for each of the three years in the period ended April
30, 2000 in conformity with accounting principles generally accepted in the
United States of America. Also, in our opinion, such financial statement
schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.



/s/ Deloitte and Touche LLP
Stamford, Connecticut
June 20, 2000
(July 28 as to Note 18)

F-2


World Wrestling Federation Entertainment, Inc.

CONSOLIDATED BALANCE SHEETS

(dollars in thousands)



As of April 30,
---------------
2000 1999
---- ----

ASSETS
CURRENT ASSETS:
Cash and cash equivalents............................................................ $101,779 $ 45,727
Short-term investments............................................................... 107,213 --
Accounts receivable (less allowance for doubtful accounts of $1,033 at
April 30, 2000 and $920 at April 30, 1999)...................................... 60,424 37,509
Inventory, net....................................................................... 2,752 2,939
Prepaid expenses and other current assets............................................ 6,084 2,849
Assets held for sale................................................................. 9,600 10,183
-------- --------
Total current assets............................................................ 287,852 99,207
PROPERTY AND EQUIPMENT--Net............................................................... 41,484 28,377
OTHER ASSETS.............................................................................. 7,696 2,604
-------- --------
TOTAL ASSETS $337,032 $130,188
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable..................................................................... $ 17,690 $ 12,946
Accrued expenses and other liabilities............................................... 32,632 18,816
Accrued income taxes................................................................. 4,536 2,291
Deferred income...................................................................... 12,220 11,084
Current portion of long-term debt.................................................... 1,017 1,388
-------- --------
Total current liabilities......................................................... 68,095 46,525

LONG-TERM DEBT............................................................................ 10,400 11,403


COMMITMENTS AND CONTINGENCIES (Note 11)

STOCKHOLDERS' EQUITY:
Common stock......................................................................... 682 567
Additional paid in capital........................................................... 222,535 1
Accumulated other comprehensive income (loss)........................................ 105 (87)
Retained earnings.................................................................... 35,215 71,779
-------- --------
Total stockholders' equity...................................................... 258,537 72,260
-------- --------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................................................ $337,032 $130,188
======== ========


See Notes to Consolidated Financial Statements.

F-3


World Wrestling Federation Entertainment, Inc.

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share data)



Fiscal year ended April 30,
---------------------------
2000 1999 1998
---- ---- ----

Net revenues....................................................... $379,310 $251,474 $126,231
Cost of revenues................................................... 220,980 147,026 87,969
Stock option charges............................................... 15,330 -- --
Selling, general and administrative expenses....................... 71,095 45,521 26,117
XFL start up costs................................................. 1,079 -- --
Depreciation and amortization...................................... 2,544 1,946 1,676
-------- -------- --------
Operating income................................................... 68,282 56,981 10,469
Interest expense (Note 9).......................................... 2,155 1,125 2,019
Interest and other income, net..................................... 7,571 2,117 479
-------- -------- --------
Income before income taxes......................................... 73,698 57,973 8,929
Provision for income taxes (Note 10)............................... 14,790 1,943 463
-------- -------- --------
Net income......................................................... $ 58,908 $ 56,030 $ 8,466
======== ======== ========

Earnings per common share - basic.................................. $ 0.94 $ 0.99 $ 0.15
======== ======== ========
Earnings per common share - diluted................................ $ 0.94 $ 0.99 $ 0.15
======== ======== ========

UNAUDITED PRO FORMA INFORMATION (Note 3):
Historical income before income taxes......................... $ 73,698 $ 57,973
Pro forma adjustment other than income taxes.................. 427 2,515
-------- --------
Pro forma income before income taxes.......................... 73,271 55,458
Pro forma provision for income taxes.......................... 28,722 22,227
-------- --------
Pro forma net income.......................................... $ 44,549 $ 33,231
======== ========
Pro forma earnings per common share - basic................... $ 0.71 $ 0.59
======== ========
Pro forma earnings per common share - diluted................. $ 0.71 $ 0.59
======== ========


See Notes to Consolidated Financial Statements

F-4


World Wrestling Federation Entertainment, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

(dollars in thousands)





Accumulated
Additional Other
Common Paid-In Comprehensive Retained
Stock Capital Income (Loss) Earnings Total
----- ------- ------------- -------- -----

Balance, May 1, 1997........................ $ 567 $ 1 $ (62) $ 15,914 $ 16,420

Comprehensive income:
Net income................................ -- -- -- 8,466 8,466
Translation adjustment.................... -- -- (37) -- (37)
--------
Total comprehensive income..................... 8,429
S Corporation distributions.................... -- -- -- (2,152) (2,152)
--------- --------- ------------- -------- --------
Balance, April 30, 1998........................ 567 1 (99) 22,228 22,697

Comprehensive income:
Net income................................ -- -- -- 56,030 56,030
Translation adjustment.................... -- -- 12 -- 12
--------
Total comprehensive income..................... 56,042
S Corporation distributions.................... -- -- (6,479) (6,479)
--------- ---------- ------------- -------- --------
Balance, April 30, 1999........................ 567 1 (87) 71,779 72,260

Comprehensive Income:
Net income................................ -- -- -- 58,908 58,908
Unrealized holding gain, net of tax....... -- -- 194 -- 194
Translation adjustment.................... -- -- (2) -- (2)
--------
Total comprehensive income..................... 59,100
Net proceeds from initial public offering...... 115 181,700 -- -- 181,815
Stock issuance costs........................... -- (2,492) -- -- (2,492)
Stock option charges........................... -- 15,330 -- -- 15,330
S Corporation earnings retained................ -- 27,996 -- (27,996) --
S Corporation distributions.................... -- -- -- (67,476) (67,476)
--------- --------- ------------- -------- --------
Balance, April 30, 2000........................ $ 682 $ 222,535 $ 105 $ 35,215 $258,537
========= ========= ============= ======== ========





See Notes to Consolidated Financial Statements

F-5


World Wrestling Federation Entertainment, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)




Year ended April 30,
--------------------------
2000 1999 1998
-------- -------- --------

OPERATING ACTIVITIES:
Net income............................................................... $ 58,908 $ 56,030 $ 8,466
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization............................................ 2,544 1,946 1,676
Provision for doubtful accounts.......................................... 113 920 --
Provision for inventory obsolescence..................................... 1,174 1,530 --
Deferred income taxes.................................................... (7,148) (483) --
Stock option charges..................................................... 15,330 -- --
Changes in assets and liabilities:
Accounts receivable.................................................. (23,027) (17,208) (8,848)
Inventory............................................................ (987) (1,842) (2,332)
Prepaid expenses and other current assets............................ (1,553) (1,522) (3)
Accounts payable..................................................... 4,744 (1,937) 1,772
Accrued expenses and other liabilities............................... 13,814 13,409 5,558
Accrued income taxes................................................. 2,570 1,698 360
Deferred income...................................................... 1,128 5,105 (393)
--------- --------- ---------
Net cash provided by operating activities.......................... 67,610 57,646 6,256
--------- --------- ---------

INVESTING ACTIVITIES:
Purchases of property and equipment......................................... (15,068) (3,756) (1,294)
Purchase of Las Vegas property.............................................. -- (10,878) --
--------- --------- ---------
Net cash used in investing activities.............................. (15,068) (14,634) (1,294)
--------- --------- ---------

FINANCING ACTIVITIES:
Repayments of short-term debt............................................ -- -- (3,300)
Proceeds from long-term debt............................................. -- 1,563 12,000
Repayments of long-term debt............................................. (1,373) (1,166) (4,478)
Repayments of capital lease obligations.................................. -- -- (96)
Purchase of short-term investments....................................... (106,964) -- --
S Corporation distributions.............................................. (67,476) (6,479) (2,152)
Net proceeds from initial public offering................................ 181,815 -- --
Stock issuance costs..................................................... (2,492) -- --
--------- --------- ---------
Net cash provided by (used in) financing activities................ 3,510 (6,082) 1,974
--------- --------- ---------

NET INCREASE IN CASH AND CASH EQUIVALENTS................................... 56,052 36,930 6,936
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD.............................. 45,727 8,797 1,861
--------- --------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD ................................... $ 101,779 $ 45,727 $ 8,797
========= ========= =========

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the period for income taxes............................. $ 19,697 $ 644 $ 106
Cash paid during the period for interest................................. 2,153 1,143 2,063
SUPPLEMENTAL NON-CASH INFORMATION:
Receipt of warrants (Note 16)............................................ $ 7 $ 2,359 --
OTHER INFORMATION:
XFL start-up costs....................................................... $ 1,079 -- --



See Notes to Consolidated Financial Statements

F-6


World Wrestling Federation Entertainment, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and per share data)


1. Basis of Presentation and Business Description

The accompanying consolidated financial statements include the accounts of World
Wrestling Federation Entertainment, Inc., formerly known as Titan Sports Inc.,
its wholly-owned subsidiaries, TSI Realty Company, WWF Hotel & Casino Ventures
LLC, World Wrestling Federation Entertainment Canada, Inc., formerly known as
Titan Promotions (Canada), Inc., Stephanie Music Publishing, Inc., WWFE Sports,
Inc., Event Services, Inc., WWF New York, Inc. and the Company's majority-owned
subsidiary Titan/Shane Partnership (collectively the "Company"). The Company's
50% interest (which currently includes all of the voting equity) in the new
venture with NBC ("XFL, LLC"), is held by a wholly owned subsidiary. In the
opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
All significant intercompany balances have been eliminated. Certain prior year
amounts have been reclassified to conform with the current year presentation.

The Company is an integrated media and entertainment company, principally
engaged in the development, production and marketing of television programming,
pay-per-view programming, live events, and the licensing and sale of branded
consumer products featuring its World Wrestling Federation brand of
entertainment. The Company's operations are organized around two principal
activities:

. Live and televised entertainment, which consists of live events,
television programming and pay-per-view programming. Revenues consist
principally of attendance at live events, sale of television
advertising time, cable television rights fees, and pay-per-view buys.

. Branded merchandise, which consists of licensing and direct sale of
merchandise. Revenues include sales of merchandise by third party
licensees and direct marketing and sales of merchandise, magazines and
home videos.

Prior to the consummation of the initial public offering of the common stock of
World Wrestling Federation Entertainment, Inc. on October 19, 1999 (the
"Offering"), the Company entered into a series of transactions that consolidated
World Wrestling Federation Entertainment Canada, Inc. and Stephanie Music
Publishing, Inc. under World Wrestling Federation Entertainment, Inc. These
transactions were accounted for similar to a pooling of interests as World
Wrestling Federation Entertainment Canada, Inc. and Stephanie Music Publishing,
Inc. had been under common control since their respective formations.


2. Summary of Significant Accounting Policies

Cash and Cash Equivalents - Cash and cash equivalents include cash on deposit in
overnight deposit accounts, certificates of deposit with original maturities of
three months or less and investments in money market accounts.

Short-term Investments - The Company classifies all of its short-term
investments as available-for-sale securities. Such short-term investments
consist primarily of the United States government and federal agencies
securities, corporate commercial paper and corporate bonds which are stated at
market value, with unrealized gains and losses on such securities reflected, net
of tax, as other comprehensive income in stockholders' equity. Realized gains
and losses on short-term investments are included in earnings and are derived
using the specific identification method for determining the cost of securities.
It is the Company's intent to maintain a liquid portfolio to take advantage of
investment opportunities; therefore, all securities are considered to be
available-for-sale and are classified as current assets.

Accounts Receivable - Accounts receivable relate principally to amounts due the
Company from cable companies for pay-per-view presentations and balances due
from the sale of television advertising, videotapes and magazines.

F-7


World Wrestling Federation Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(dollars in thousands, except share and per share data)

Inventory - Inventory consists of merchandise sold on a direct sales basis, and
videotapes, which are sold through wholesale distributors and retailers.
Inventory is stated at the lower of cost (first-in, first-out basis) or market.
Substantially all inventories are comprised of finished goods.

Property and Equipment - Property and equipment are stated at historical cost.
Depreciation and amortization is computed on a straight-line basis over the
estimated useful lives of the assets or, when applicable, the life of the lease,
whichever is shorter. Vehicles and equipment are depreciated based on estimated
useful lives varying from three to five years. Buildings and related
improvements are amortized over thirty-one years, the estimated useful life.
Maintenance and repairs are charged directly to expense as incurred.

Income Taxes - Concurrent with the closing of the Offering, the Company
terminated its S Corporation election and thereafter has been subject to
federal, state and foreign income taxes. See Note 3 regarding pro forma income
taxes assuming that the Company had been a C Corporation for the periods prior
to the Offering.

Other than World Wrestling Federation Entertainment Canada, Inc., prior to the
termination of its S Corporation status, federal taxable income attributable to
the operations of the Company was included in the federal taxable income of the
individual stockholder. The provision for income taxes for the years ended April
30, 1999 and 1998 relates to the foreign operations of the Company and certain
state taxes. The deferred state and foreign tax provision is determined under
the asset and liability method. Under this method, deferred assets and
liabilities are recognized based on differences between financial statement and
income tax basis of assets and liabilities using presently enacted tax rates.
Concurrent with the termination of the Company's S Corporation election, all
deferred taxes were revalued using a combined federal and state tax rate.

Revenue Recognition - Revenues from live and televised entertainment are
recorded when earned, specifically upon the occurrence or airing of the related
event. Revenues from the licensing and sale of branded consumer products consist
principally of royalty revenues, magazine subscription and newsstand revenues
and sales of branded merchandise, net of estimated returns. Royalty revenues are
recognized in accordance with the terms of applicable royalty and license
agreements with each counter party, which is generally upon receipt of notice by
the individual licensee as to license fees due. In certain situations the
Company receives royalty advances from third parties which are deferred and
recognized over the term of the related agreements. Subscription revenues are
initially deferred and earned pro-rata over the related subscription periods.
Sales of merchandise and newsstand magazines are recorded when shipped to third
parties.

Advertising Expense-- Expenses are charged to income during the period incurred,
except for expenses related to the development of a major commercial or media
campaign which are charged to income in the period in which the commercial or
campaign is first presented by the media.

Foreign Currency Translation - For translation of the financial statements of
its Canadian subsidiary, the Company has determined that the Canadian dollar is
the functional currency. Assets and liabilities are translated at the year-end
exchange rate, and income statement accounts are translated at average exchange
rates for the year. The resulting translation adjustment is recorded as
accumulated other comprehensive income (loss), a component of stockholders'
equity. Foreign currency transactions are recorded at the exchange rate
prevailing at the transaction date.

Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.

Valuation of Long-Lived Assets - The Company periodically evaluates the carrying
value of long-lived assets when events and circumstances warrant such a review.
The carrying value of a long-lived asset is considered impaired when indicators
of impairment are present and undiscounted cash flows estimated to be generated
by the asset are less than the asset's carrying amount. In that event, a loss is
recognized based on the amount by which the carrying value exceeds the fair
value of the long-lived asset. Fair value is determined primarily using the
anticipated cash flows discounted at a rate commensurate with the risk involved.

F-8


World Wrestling Federation Entertainment Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

(dollars in thousands, except share and per share data)

Stock-Based Compensation--The Company follows the disclosure-only provisions of
Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for
Stock-Based Compensation." SFAS No. 123 encourages, but does not require,
companies to adopt a fair value based method for determining expense related to
stock-based compensation. The disclosures are set forth in Note 12. The Company
continues to account for stock-based compensation using the intrinsic value
method as prescribed under Accounting Principles Board Opinion ("APB") No 25,
"Accounting for Stock Issued to Employees," and related Interpretations.

Recent Accounting Pronouncements - In June 1998, SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities" was released, as amended by SFAS
No. 137, for the deferral of the implementation. The statement requires the
recognition of all derivatives as either assets or liabilities in the balance
sheet and the measurement of those instruments at fair value, and is effective
for all fiscal quarters of all fiscal years beginning after June 15, 2000, which
therefore would require the Company to adopt such statement on May 1, 2001.
Although the Company's involvement in derivative type instruments is limited,
the impact of adoption of this statement, if adopted currently, would be to
reflect the estimated fair value of certain warrants received by the Company in
connection with license agreements (see Note 16).

In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin No.101 ("SAB 101"), "Revenue Recognition in Financial
Statements". SAB 101 summarizes certain of the SEC's views in applying generally
accepted accounting principles to revenue recognition in financial statements.
On June 26, 2000, the SEC issued SAB 101B to defer the effective date of
implementation of SAB 101 until no later than the fourth fiscal quarter of
fiscal years beginning after December 15, 1999. The Company is required to adopt
SAB 101 by the quarter ending April 30, 2001. The Company is evaluating whether
SAB 101 will cause any change in its revenue recognition policies and
procedures.

3. Unaudited Pro Forma Information

The unaudited pro forma consolidated statements of income information presents
the pro forma effects on the historical consolidated statements of income for
fiscal years ended April 30, 2000 and 1999 of $427 and $2,515, respectively, for
additional compensation to the chairman of the board of directors and to the
chief executive officer pursuant to employment agreements that became effective
July 1, 1999. Additionally, it presents income taxes of $28,722 and $22,227 for
the fiscal years ended April 30, 2000 and 1999, respectively, to give pro forma
effect due to the change in the Company's tax status from a Subchapter S
Corporation to a Subchapter C Corporation, representing an overall effective tax
rate of 39.2% for fiscal 2000 and 40% for fiscal 1999.

4. Earnings Per Share

For the year ended April 30, 2000, for the purpose of calculating earnings per
share - basic, the weighted average number of common shares outstanding was
62,806,726 and for the purpose of calculating earnings per share - diluted, the
weighted average number of common shares outstanding, including dilutive
securities, was 62,830,279 which includes 23,553 shares representing the
dilutive effect of outstanding options.

For the years ended April 30, 1999 and 1998, for the purpose of calculating
earnings per share - basic and earnings per share - diluted, the weighted
average number of common shares outstanding was 56,667,000.

F-9


World Wrestling Federation Entertainment, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS- (Continued)

(dollars in thousands, except share and per share data)


5. Investments

Short-term investments consist of the following as of April 30, 2000:



Unrealized Fair
Cost Holding Gain Value
---------------------------------

Government obligations............................................................... $ 9,300 $ 19 $ 9,319
Corporate obligations................................................................ 96,435 230 96,665
Other................................................................................ 1,229 -- 1,229
-------- ---- --------
Total........................................................................... $106,964 $249 $107,213
======== ==== ========


6. Assets Held for Sale

Assets held for sale at April 30, 2000 and 1999 consists primarily of real
property of the WWF Hotel & Casino Ventures, LLC located in Las Vegas, Nevada.
Management has made a decision to sell the property and is currently soliciting
offers. The property was purchased in the second quarter of fiscal 1999 as part
of the Company's expansion project. The assets are being carried at their
historical cost, which is less than estimated fair value less costs to sell. In
determining the fair value, the Company considered, among other things, the
range of preliminary purchase prices being discussed with potential buyers as
well as a recent appraisal of the property.


7. Property and Equipment

Property and equipment consists of the following as of:



April 30,
--------------------
2000 1999
-------- --------

Land, buildings and improvements................................................. $ 41,960 $ 31,010
Equipment........................................................................ 24,785 20,170
Vehicles......................................................................... 629 543
-------- --------
67,374 51,723
Less accumulated depreciation and amortization.............................. 25,890 23,346
-------- --------
Total................................................................... $ 41,484 $ 28,377
======== ========


Depreciation and amortization expense was $2,544, $1,946, and $1,676 for the
years ended April 30, 2000, 1999 and 1998, respectively.

8. Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consist of the following as of:



April 30,
-------------------
2000 1999
------- -------

Accrued pay-per-view event costs........................................................ $ 7,020 $ 5,364
Accrued talent royalties................................................................ 1,981 1,389
Accrued payroll related costs........................................................... 7,228 2,910
Accrued television costs................................................................ 8,719 3,009
Accrued other........................................................................... 7,684 6,144
------- -------
Total.............................................................................. $32,632 $18,816
======= =======


F-10


World Wrestling Federation Entertainment, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(dollars in thousands, except share and per share data)


9. Debt

Debt as of April 30, 2000 and 1999 consists of the following:



2000 1999
------- --------

GMAC Commercial Mortgage Corporation................................................. $10,932 $11,410
IBJ-Business Credit Corporation...................................................... 485 1,133
J.L.J. Financial Services Corp....................................................... -- 88
Charter Financial, Inc............................................................... -- 160
------- -------
Total debt........................................................................... 11,417 12,791
Less current portion................................................................. 1,017 1,388
------- -------
Long-term debt....................................................................... $10,400 $11,403
======= =======


During December 1997, the Company entered into a mortgage loan agreement with
GMAC Commercial Mortgage Corporation, assigned to Citicorp Real Estate, Inc.,
under the terms of which the Company borrowed $12,000 at an annual interest rate
of 7.6%. Principal and interest are to be paid in 180 monthly installments of
approximately $112, which commenced on January 1, 1998. The loan is
collateralized by the Company's executive offices and television studio in
Stamford, Connecticut.

During December 1997, the Company entered into a revolving line of credit
agreement with IBJ Schroder Business Credit Corporation ("IBJ") under the terms
of which the Company may borrow up to $10,000 at the IBJ alternate base rate
plus .50% or the IBJ eurodollar rate plus 2.50%, based upon the availability of
qualifying receivables which will collateralize the loan. The IBJ agreement
expires in December 2000. The credit agreement contains various financial and
operating covenants, which, among other things, require the maintenance of
certain financial ratios, places limitations on distributions to stockholders
and restrict the Company's ability to borrow funds from other sources. In July
1999, the Company obtained a waiver which, among other things, raised the
existing limitations on stockholder distributions. At April 30, 2000, there were
no outstanding borrowings under the revolving portion of the credit agreement.
The Company is obligated to pay an annual .5% commitment fee on the unused
portion of the facility during the term of the agreement.

During July 1998, the Company amended its revolving line of credit agreement
with IBJ to allow the Company to make a capital expenditure loan, under the
terms of which the Company borrowed $1,564 at the IBJ Swap Rate plus 3% (8.92%
at April 30, 2000 and at April 30,1999) to be repaid in 29 monthly installments
of approximately $54 which commenced on September 1, 1998. The loan is
collateralized by the purchased equipment.

During February 1997, the Company entered into a Note and Security Agreement
with JLJ Finnancial Services Corp. under which the Company borrowed $285 at a
fixed interest rate of 10.89%. As of April 30, 2000, there were no amounts
outstanding under this agreement.

During fiscal 1995, the Company entered into a Note and Security Agreement with
Charter Financial, Inc. under which the Company borrowed $713 at a fixed
interest rate of 10.5%. As of April 30, 2000, there were no amounts outstanding
under this agreement.

Interest expense was $2,155, $1,125 and $2,019 for the years ended April 30,
2000, 1999 and 1998, respectively. Included in interest expense for the year
ended April 30, 2000 was interest of $1,127 incurred in connection with the
$32,000 note payable to the Company's then sole stockholder.

F-11


World Wrestling Federation Entertainment, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(dollars in thousands, except share and per share data)


At April 30, 2000, the scheduled principal repayments under the loan agreements
described above were as follows:

Ending April 30,
----------------
2001.......................................... $ 1,017
2002.......................................... 570
2003.......................................... 615
2004.......................................... 663
2005.......................................... 715
Thereafter...................................... 7,837
-------
Total........................................ $11,417
=======


10. Income Taxes

Other than World Wrestling Federation Entertainment Canada, Inc., the Company
was formerly an S Corporation for U.S. federal income tax purposes. An S
Corporation's income or loss and distributions are passed through to, and taken
into account by, the corporation's stockholder in computing personal taxable
income. Accordingly, no provision for U.S. federal income tax has been made in
the accompanying historical consolidated financial statements for the fiscal
years ended April 30, 1999 and 1998. Concurrent with the Company's initial
public offering, its tax status was changed from a Subchapter S Corporation to a
Subchapter C Corporation. As a Subchapter C Corporation, the Company is directly
responsible for all federal and state income taxes. As a result of the change in
its tax status, for the year ended April 30, 2000, the Company was taxed on its
income at an effective rate of approximately 20% based upon the number of days
during the fiscal year that it was a Subchapter S Corporation and the number of
days it was a Subchapter C Corporation. The Company's income tax provision for
fiscal 2000, 1999 and 1998 was $ 14,790, $1,943 and $463 respectively, and was
comprised primarily of current state and foreign taxes for fiscal 1999 and 1998,
and includes federal, state and foreign taxes for fiscal 2000. See Note 3
regarding pro forma income taxes assuming the Company had not been an S
Corporation.

The Company accounts for income taxes in accordance with the provisions of SFAS
109, "Accounting For Income Taxes." The components of the Company's tax
provision for each of the three years in the period ended April 30, 2000 are as
follows:




2000 1999 1998
---- ---- ----

Current:
Federal............................................. $16,901 -- --
State and local..................................... 4,764 $2,202 $ 414
Foreign............................................. 273 224 49
Deferred:
Federal............................................. (5,951) -- --
State and local..................................... (1,181) (413) --
Foreign............................................. (16) (70) --
------- ------ -----
Total............................................ $14,790 $1,943 $ 463
======= ====== =====


F-12


World Wrestling Federation Entertainment, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(dollars in thousands, except share and per share data)


The following sets forth the difference between the provision for income taxes
computed at the U.S. federal statutory income tax rate of 35% and that reported
for financial statement purposes:



Year Ended
April 30, 2000
--------------

Statutory U.S. federal tax at 35%............................................... $ 25,794
State and local taxes, net of federal benefit................................... 3,204
Deferred tax benefit due to change in tax status................................ (2,660)
Federal benefit of S-Corporation ............................................... (11,976)
Foreign......................................................................... 93
Other permanent items........................................................... 335
----------
Provision for income taxes...................................................... $ 14,790
==========


The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities consist of the following
as of April 30, 2000 and 1999:



2000 1999
---- ----

Deferred tax assets:
Accounts receivable............................................................ $ 364 $ 188
Inventories.................................................................... 1,665 100
Prepaid royalties.............................................................. 1,251 --
Stock options.................................................................. 6,012 --
Accrued liabilities and reserves............................................... 548 65
Other.......................................................................... 464 226
Foreign........................................................................ 86 70
------- -----
10,390 649
Deferred tax liabilities:
Fixed assets and depreciation.................................................. 1,109 117
Intangible assets.............................................................. 108 7
Other liabilities.............................................................. -- 16
Prepaid royalties.............................................................. 1,522 --
------- -----

2,739 140
------- -----
Total, net................................................................. $ 7,651 $ 509
======= =====


The temporary differences described above represent differences between the
tax basis of assets or liabilities and their reported amounts in the
consolidated financial statements that will result in taxable or deductible
amounts in future years when the reported amounts of the assets or liabilities
are recovered or settled. $2,349 of the net deferred tax asset is included in
prepaid expenses and other current assets and the remaining $5,302 are included
in other non-current assets in the Consolidated Balance Sheet.

United States income taxes have not been provided on unremitted earnings of
the Company's foreign subsidiary, because the Company's intent is to keep such
earnings indefinitely reinvested in the foreign subsidiary's operations.

F-13


World Wrestling Federation Entertainment, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(dollars in thousands, except share and per share data)


11. Commitments and Contingencies

Commitments

The Company has certain commitments, including various non-cancellable operating
leases, performance contracts with various performers, employee agreements, and
agreements with USA Networks and United Paramount Network ("UPN"), both of which
are television networks, which guarantees each of the networks a minimum payment
for advertising during the course of the respective agreements. The Company's
agreement with USA Networks expires on September 1, 2000 at which time, in
connection with the Company's agreement with Viacom/CBS, the Company anticipates
that its programming will air on cable networks owned by Viacom/CBS through
September 2005. The agreement with Viacom/CBS, guarantee the network a minimum
payment for advertising during the course of the agreement. In addition, as part
of the agreement with Viacom/CBS, the Company's programming agreement with UPN
was extended for a three year period ending September 2003. The effectiveness of
the Viacom/CBS agreement is conditioned upon the Company's prevailing in USA's
appeal of a decision favorable to the Company in litigation brought by USA (See
"Legal Proceedings" below). Future minimum payments under the leases and these
agreements as of April 30, 2000, adjusted for the Viacom/CBS television
agreement and UPN extension, as described above are as follows:



Operating
Lease Other
Year Ending April 30, Commitments Commitments Total
-------------------- ----------- ----------- -----

2001............................................... $ 2,984 $ 46,614 $ 49,598
2002............................................... 2,991 38,792 41,783
2003............................................... 2,997 34,586 37,583
2004............................................... 3,042 19,696 22,738
2005............................................... 2,888 10,736 13,624
Thereafter............................................ 29,771 13,217 42,988
------- -------- --------
Total.............................................. $44,673 $163,641 $208,314
======= ======== ========



Rent expense under operating leases was approximately $573, $260 and $170, for
the fiscal years ended April 30, 2000, 1999 and 1998, respectively.

On June 29, 1999, the Company made an S Corporation distribution to its then
sole stockholder in the form of an unsecured, 5% interest-bearing note in the
principal amount of $32,000 due April 10, 2000. The note represented estimated
federal and state income taxes payable by the Company's then sole stockholder
with respect to the Company's taxable income for fiscal 1999 and estimated
taxable income for the period May 1, 1999 through October 18, 1999 which
represents the portion of the Company's taxable earnings for fiscal 2000
allocated to the S Corporation. As of April 30, 2000, the Company paid the
$32,000 note in full plus an additional $8,400. The additional $8,400
represented additional tax liabilities of the then sole stockholder due to a
revision of estimated taxes payable for the tax periods described above. To the
extent the portion of the Company's fiscal 1999 and 2000 actual earnings
allocated to the S Corporation exceeds those earnings used in the calculation of
estimated income taxes payable by its then sole stockholder, the Company may
need to make an additional distribution to its stockholders of record as of July
3, 1999 which is expected to be paid no later than August 15, 2000.

F-14


World Wrestling Federation Entertainment, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(dollars in thousands, except share and per share data)


Legal Proceedings

On May 13, 1991, William R. Eadie, a former professional wrestler who had
been one of the Company's performers, filed a lawsuit in state court in
Wisconsin against the Company and Mr. McMahon. The case was removed to the
United States District Court for the District of Connecticut on August 7, 1991.
The suit alleges that the Company breached an oral agreement to compensate Eadie
for the use of his ideas in connection with a wrestling tag team called
"Demolition" and to employ him for life. Plaintiff is seeking $6,500 in
compensatory damages and unspecified punitive damages. The Company has denied
any liability and is vigorously contesting this action. In a similar action
filed against the Company on April 10, 1992 in the United States District Court
for the District of Connecticut, Randy Colley, a former professional wrestler
who had been one of the Company's performers, also alleges that the Company
breached an oral agreement to compensate him for disclosing his idea for a
wrestling tag team called "Demolition." He is seeking unspecified compensatory
and punitive damages. The Company has denied any liability and is vigorously
defending this action. Colley's claims were consolidated for trial with those of
Eadie. The Company believes that both plaintiffs' claims are without merit. On
May 20, 1998, a magistrate judge ruled that the plaintiffs' expert on damages
could not testify at trial. Thereafter, the plaintiffs engaged a second expert
on damages, whose report was filed on August 31, 1999. Given the substance of
the second expert's opinion, as well as continuing developments in the law
regarding the relevance and reliability of expert opinions, it is not possible
to predict whether this second expert's opinion will be admitted into evidence
at trial. The Company believes that an unfavorable outcome in these actions may
have a material adverse effect on its financial condition, results of operations
or prospects.


On June 21, 1996, the Company filed an action against WCW and Turner
Broadcasting Systems, Inc. ("TBS") in the United States District Court for the
District of Connecticut, alleging unfair competition and infringement of its
copyrights, servicemarks and trademarks with respect to two characters owned by
the Company, Razor Ramon and Diesel. On May 18, 1998, WCW filed an action
against the Company in the United States District Court for the District of
Connecticut and immediately moved to consolidate this action with the Company's
pending action against WCW and TBS. WCW alleged that the Company diluted various
marks owned by and/or licensed to WCW by disparaging those marks and also claims
that the Company engaged in unfair competition when it aired a "Flashback"
series of past World Wrestling Federation performances on USA Network without
disclosing that some of the performers, at the time the series was subsequently
broadcast, were then affiliated with WCW. The parties have resolved the pending
litigation between them to their mutual satisfaction.

On June 15, 1999, members of the family of Owen Hart, a professional
wrestler performing under contract with the Company, filed suit in state court
in Missouri against the Company, Vincent and Linda McMahon and nine other
defendants, including the manufacturer of the rigging equipment involved,
individual equipment riggers and the arena operator, as a result of the death of
Owen Hart during a pay-per-view event at Kemper Arena in Kansas City, Missouri
on May 23, 1999. The specific allegations against the Company include the
failure to use ordinary care to provide proper equipment and personnel for the
safety of Owen Hart, the failure to take special precautions when conducting an
inherently dangerous activity, endangerment and the failure to warn, vicarious
liability for the negligence of the named individual defendants, the failure to
properly train and supervise, and the provision of dangerous and unsafe
equipment. Plaintiffs seek compensatory and punitive damages in unspecified
amounts. On September 1, 1999, the Company filed its answer, affirmative
defenses and cross-claims, denying any liability for negligence and other claims
asserted against the Company. Subsequently, the manufacturing defendants
settled, and the Company has filed third party petitions against them. The
Company believes that it has meritorious defenses and intends to defend
vigorously against the suit. On October 1, 1999, the Company filed a complaint
in the United States District Court for the District of Connecticut, principally
seeking a declaratory judgment with respect to the enforceability of contractual
defenses, forum selection clauses, and other provisions of Owen Hart's contract
with the Company. The defendants have filed a motion to dismiss the Company's
complaint for want of jurisdiction, which is currently pending before the court.
On February 22, 2000, the Company filed an Emergency Motion for Specific
Enforcement of and for Summary Judgment on Forum Selection Clause seeking a
legal ruling that any claims belonging to Owen Hart arising out of his
relationship with the Company be adjudicated in Connecticut. The Company's
motion is currently pending. The Company believes that an unfavorable outcome of
this suit may have a material adverse effect on its financial condition, results
of operations or prospects.

F-15


World Wrestling Federation Entertainment, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(dollars in thousands, except share and per share data)

On September 20, 1999, the Company was formally served with a complaint
regarding an action that Nicole Bass, a professional wrestler previously
affiliated with the Company, filed in the United States District Court for the
Eastern District of New York in which she alleges sexual harassment under New
York law, civil assault and intentional infliction of emotional distress. Bass's
complaint sought $20,000 in compensatory damages and $100,000 in punitive
damages. On or about November 9, the Company received a Notice of Charge of
Discrimination from the Equal Employment Opportunity Commission (EEOC) filed by
Nicole Bass. On January 27, 2000, the EEOC closed its file on her claim. The
Company filed a Motion to Dismiss the complaint on or about January 10, 2000.
Plaintiff filed an amended complaint on February 28, 2000 withdrawing her stated
demand of $100,000 in punitive damages as well as her claims of civil assault
and intentional infliction of emotional distress. The amended complaint now
seeks relief under Title VII for Sexual Harassment, Title 42 ss.1981 (a) for
gender bias, and for violations of the New York Human Rights law. The Company
has filed a Motion to Dismiss, Motion to Strike and Motion for a More Definite
Statement to the Amended Complaint. The Company believes that the claims are
without merit and intend to vigorously defend against this action. Based on the
Company's preliminary review of the allegations and the underlying facts, as the
Company understands them, the Company does not believe that an unfavorable
outcome in this action will have a material adverse effect on its financial
condition or results of operations or prospects.

On April 17, 2000 WWF-World Wide Fund for Nature (the "Fund") instituted legal
proceedings against the Company in the English High Court seeking injunctive
relief and unspecified damages for alleged breaches of an agreement between the
Fund and the Company. The Fund alleges that the Company's use of the initials
"WWF" in various contexts, including uses in the wwf.com and wwfshopzone.com
internet domain names and in contents of various of the Company's web sites; its
"scratch" logo; and certain oral uses in the contexts of foreign broadcasts of
its programming, violate the agreement between the Fund and the Company. The
Company believes that it has meritorius defenses and intends to defend the
action vigorously. The Company believes that an unfavorable outcome of this suit
may have a material adverse effect on its financial condition, results of
operations or prospects.

Pursuant to the Company's contract with USA Network, the Company tendered to USA
an offer made by Viacom/CBS for a strategic alliance agreement, which included
certain transmission rights for its programming. USA Network purported to match
the offer and simultaneously filed an action in the Delaware Court of Chancery
seeking (i) injunctive relief enjoining the contract between Viacom/CBS and the
Company, and (ii) an award of specific performance requiring the Company to
enter into a contract with USA Network. After expedited discovery proceedings
and a trial on the merits, the Court ruled in its favor that USA Network had
failed to match Viacom/CBS's offer. USA has filed an appeal of this ruling to
the Delaware Supreme Court and a hearing is scheduled for August 14, 2000.

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

12. Stockholders' Equity

On October 15, 1999, the Company filed an amended and restated certificate of
incorporation which, among other things, authorized 60,000,000 shares of new
Class B common stock, par value $.01 per share, reclassified each outstanding
share of World Wrestling Federation Entertainment, Inc. common stock into
566,670 shares of Class B common stock, authorized 180,000,000 shares of new
Class A common stock, par value $.01 per share and authorized 20,000,000 shares
of preferred stock, par value $.01 per share. On October 19,1999, the Company
sold 11,500,000 shares of its Class A common stock to the public at an initial
offering price of $17.00 per share. The net proceeds to the Company generated
from the offering were approximately $179,323 after deducting commissions, fees
and expenses. On April 30, 2000, the Company had 56,667,000 shares of Class B
common stock and 11,500,000 shares of Class A common stock outstanding.

In July 1999, the Company adopted the 1999 Long-Term Incentive Plan ("LTIP"),
which became effective with the Offering. The LTIP provides for grants of
options as incentives and rewards to encourage employees, directors, consultants
and performers in the long-term success of the Company. The LTIP provides for
grants of options to

F-16


World Wrestling Federation Entertainment, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(dollars in thousands, except share and per share data)

purchase shares at a purchase price equal to the fair market value on the date
of the grant. The options expire 10 years after the date of the grant and are
generally exercisable in installments beginning one year from the date of the
grant. The LTIP also provides for the grant of other forms of equity based
incentive awards as determined by the Compensation Committee of the Board of
Directors. The total number of shares reserved for issuance under the LTIP are
10,000,050, of which 5,348,500 stock options were outstanding under the LTIP as
of April 30, 2000. Of these options, 987,000 were granted to independent
contractors consisting primarily of the Company's performers. With respect to
the options granted to independent contractors, the Company accounted for the
equity instrument grants in accordance with SFAS No. 123, "Accounting for Stock
Based Compensation" and with Emerging Issues Task Force Issue No. 96-18,
"Accounting for Equity Instruments That Are Issued to Other Than Employees For
Acquiring, or in Conjunction with Selling, Goods or Services" and as a result
recorded a charge of $6,020 during the second quarter of fiscal 2000. The
options granted to employees have been accounted for in accordance with
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees."

Presented below is a summary of the LTIP's activity for the period commencing
with the date of the offering through the fiscal year ended April 30, 2000.




Weighted Average
Options Exercise Price
------- --------------

Options granted at Offering........................................... 5,400,500 $17.00
Options granted subsequent to the Offering............................ 45,000 17.00
Options cancelled..................................................... (97,000) 17.00
--------- ------
Balance April 30, 2000................................................ 5,348,500 $17.00
========= ======


The following table summarizes information for options outstanding and
exercisable at April 30, 2000:



Number of Options Weighted Average Weighted Average Number of Options Weighted Average
----------------- ---------------- -----------------
Range of Prices Outstanding Remaining Life Exercise Price Exercisable Exercise Price
--------------- ----------- -------------- -------------- ----------- --------------

$17.00 5,348,500 9.5 years $17.00 621,100 $17.00



Pro Forma Fair Value Disclosures

Had compensation expense for the Company's stock options been recognized based
on the fair value on the grant date under the methodology prescribed by SFAS
No.123, the Company's net income and basic and diluted earnings per common share
for the year ended April 30, 2000 would have been impacted as shown in the
following table:



April 30, 2000
--------------

Reported net income...................................................... $ 58,908
Pro forma net income..................................................... $ 53,039
Reported basic and diluted earnings per common share..................... $ 0.94
Pro forma basic and diluted earnings per common share.................... $ 0.84


F-17


World Wrestling Federation Entertainment, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(dollars in thousands, except share and per share data)

The fair value of options granted to employees, which is amortized to expense
over the option vesting period in determining the pro forma impact, is estimated
on the date of the grant using the Black-Scholes option-pricing model with the
following weighted average assumptions:

Expected life of option 3 years
Risk-free interest rate 5.5%
Expected volatility of the Company's common stock 44%

The weighted average fair value of options granted to employees during fiscal
2000 is as follows:

Fair value of each option granted to employees $ 6.04
Total number of options granted to employees 4,361,500
Total fair value of all options granted to employees $ 26,364

In accordance with SFAS No.123, the weighted average fair value of stock options
granted to employees is based on a theoretical statistical model using the
preceding assumptions. In actuality, because the Company's stock options are not
traded on any exchange, employees can receive no value nor derive any benefit
from holding stock options under these plans without an increase in market price
of the World Wrestling Federation Entertainment, Inc. common stock. Such an
increase in stock price would benefit all stockholders commensurately.

In April 2000, the Company entered into a non-forfeitable agreement with
Viacom/CBS whereby, Viacom/CBS could acquire 2.3 million newly issued shares of
the Company's stock at $13 per share. The Company accounted for this agreement
under the provisions of Emerging Issues Task Force Issue No. 96-18, "Accounting
for Equity Instruments That Are Issued to Other Than Employees for Aquiring, or
in Conjunction with Selling, Goods or Services," and, accordingly, recorded a
fourth quarter fiscal 2000 charge of $9,310.


13. Employee Benefit Plans

The Company sponsors a 401(k) defined contribution plan covering substantially
all employees. Under this plan, participants are allowed to make contributions
based on a percentage of their salaries, subject to a statutorily prescribed
annual limit. The Company makes matching contributions of 50 percent of each
participant's contributions, up to 6 percent of eligible compensation (maximum
3% matching contribution). The Company may also make additional discretionary
contributions to the 401(k) plan. The Company's expense for matching
contributions and additional discretionary contributions to the 401(k) plan was
$1,082 during fiscal 2000 and $233 during fiscal 1999. There were no Company
matching contributions to the 401(k) plan in fiscal 1998.

The Company sponsored a profit sharing plan for the benefit of employees meeting
certain eligibility requirements. This profit sharing plan was merged into the
Company's 401(k) plan during fiscal 1999, with all assets associated with the
profit sharing plan being transferred into the 401(k) plan. The Company's
expense under the profit sharing plan was $1,568 during fiscal 1998.

During fiscal 1999 the Company created its Money Purchase Plan. Under this plan,
the Company makes a contribution to each participant's account based upon a
formula as prescribed by the plan document. The Company's expense under the
Money Purchase Plan was $1,434 and $769 during fiscal 2000 and fiscal 1999,
respectively.


14. Related Party Transactions

The Company expensed approximately $2, $123 and $1,063 in fiscal 2000, 1999 and
1998, respectively in travel related costs and management fees paid to a travel
agency which had been owned by the chief executive officer of the Company. On
June 5, 2000, the chief executive officer sold the travel agency to an
unaffiliated third party. The management fee is paid in return for the travel
agency's overall management of the Company's travel planning requirements.
Amounts

F-18


World Wrestling Federation Entertainment, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(dollars in thousands, except share and per share data)

receivable from the travel agency at April 30, 2000 and 1999 was $336 and $205,
respectively. These balances arise from transactions conducted in the normal
course of business.

A member of the Company's board of directors also was an independent contractor
engaged by the Company during fiscal 2000. Prior to the date of the Offering,
this director received $63 for his services and for the period subsequent to the
Offering through April 30, 2000, this director received $38.

The Company had a receivable from Shane Distribution Co. in the amount of $377
at April 30, 2000 and 1999. Shane Distribution Co. is a movie distribution
company owned by the chairman of the Company.

For the fiscal years ended April 30, 2000, 1999 and 1998, the Company made S
Corporation distributions to its sole stockholder of $67,476, $6,479 and $2,152
respectively. Of the $67,476 distributed in fiscal 2000, $40,412 related to the
payment of taxes by our then sole stockholder for S Corporation earnings of the
Company.

On April 10, 2000, in connection with the payment of the outstanding balance of
the note payable to its then sole stockholder, the Company paid $1,127 of
interest on the $32,000 note payable to its then sole stockholder.

On June 29, 1999, the Company made a distribution of $25,500 to its then sole
stockholder representing a portion of previously earned and undistributed
earnings, which have been fully taxed at the stockholder level. In addition, on
June 29, 1999, the Company made an S Corporation distribution to its then sole
stockholder in the form of an unsecured, 5% interest-bearing note in the
principal amount of $32,000 due April 10, 2000. The note represented estimated
federal and state income taxes payable by the Company's then sole stockholder
with respect to the Company's taxable income for fiscal 1999 and estimated
taxable income for the period May 1, 1999 through October 18, 1999 which
represents the portion of the Company's taxable earnings for fiscal 2000
allocated to the S Corporation. As of April 30, 2000, the Company paid the
$32,000 note in full plus an additional $8,400. The additional $8,400
represented additional tax liabilities of the then sole stockholder due to a
revision of estimated taxes payable for the tax periods described above. To the
extent the portion of the Company's fiscal 1999 and 2000 actual earnings
allocated to the S Corporation exceeds those earnings used in the calculation of
estimated income taxes payable by its then sole stockholder, the Company may
need to make an additional distribution to its stockholders of record as of July
3, 1999 which is expected to be paid no later than August 15, 2000.

F-19


World Wrestling Federation Entertainment, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(dollars in thousands, except share and per share data)

15. Segment Information

The Company's operations are currently conducted within three reportable
segments, live and televised entertainment, branded merchandise and XFL
activities. The live and televised entertainment segment consists of live
events, television programming and pay per view programming. The branded
merchandise segment includes consumer products sold through third party
licensees and the marketing and sale of merchandise, magazines and home videos.
The XFL segment currently consists of costs related to the development and
start-up of the Company's professional football league. The Company does not
allocate corporate overhead to each of the segments and as a result, corporate
overhead is a reconciling item in the table below. Included in corporate
overhead for the year ended April 30, 2000 is non-cash stock option charges of
$15,330. There are no intersegment revenues. Results of operations and assets
from non-U.S. sources are less than 10% of the respective consolidated financial
statement amounts. The table presents information about the financial results of
each segment for the years ended April 30, 2000, 1999 and 1998 and assets as of
April 30, 2000 and 1999.



April 30,
----------------------
2000 1999 1998
--------- --------- ---------

Net revenues:
Live and televised entertainment - WWF brand................................. $ 265,485 $ 170,045 $ 92,649
Branded merchandise - WWF brand.............................................. 113,825 81,429 33,582
--------- --------- ---------
Total net revenues........................................................... $ 379,310 $ 251,474 $ 126,231
========= ========= =========

Depreciation and Amortization:
Live and televised entertainment - WWF brand................................. $ 1,333 $ 908 $ 633
Branded merchandise - WWF brand.............................................. -- -- --
Corporate.................................................................... 1,211 1,038 1,043
--------- --------- ---------
Total depreciation and amortization.......................................... $ 2,544 $ 1,946 $ 1,676
========= ========= =========

Operating Income (Loss):
Live and televised entertainment - WWF brand................................. $ 94,672 $ 61,870 $ 19,390
Branded merchandise - WWF brand.............................................. 41,340 26,163 11,159
XFL (start-up costs) ..................................................... (1,079) -- --
Corporate (including fiscal 2000 non-cash stock option charges of $15,330)... (66,651) (31,052) (20,080)

--------- --------- ---------
Total operating income....................................................... $ 68,282 $ 56,981 $ 10,469
========= ========= =========

Assets:
Live and televised entertainment............................................. $ 72,042 $ 39,096
Branded merchandise.......................................................... 23,320 24,118
Unallocated.................................................................. 241,670 66,974
--------- ---------
Total assets................................................................. $ 337,032 $ 130,188
========= =========


F-20


World Wrestling Federation Entertainment, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(dollars in thousands, except share and per share data)


16. Financial Instruments and Off-Balance Sheet Risk

Concentration of Credit Risk - Financial instruments, which potentially subject
the Company to concentrations of credit risk, are principally bank deposits and
accounts receivable. Cash and cash equivalents are deposited with high credit
quality financial institutions. Except for receivables from cable companies
related to pay-per-view events, concentrations of credit risk with respect to
trade receivables are limited due to the large number of customers. A
significant portion of trade receivables for pay-per-view events are due from
the Company's pay-per-view administrator, who collects and remits payments to
the Company from individual cable system operators. The Company performs ongoing
evaluations of its customers' financial condition, including its pay-per-view
administrator, and monitors its exposure for credit losses and maintains
allowances for anticipated losses.

Fair Value of Financial Instruments - The carrying amounts of cash, cash
equivalents, accounts receivable and accounts payable approximate fair value
because of the short-term nature and maturity of such instruments. The carrying
amount of the Company's long-term debt approximates fair value as the interest
rates on the instruments approximate market rates. In addition, the Company has
received warrants from three publicly traded companies with whom it has
licensing agreements. The estimated fair value of the warrants on the date of
receipt aggregated approximately $2,366. Such amount is being recognized as
license revenues over the respective license periods. The carrying amount of
these warrants is included in other assets at April 30, 2000. The estimated fair
value of such warrants was $2,657 at April 30, 2000.


17. Quarterly Financial Summaries (unaudited)



1st 2nd 3rd 4th
Quarter Quarter(1) Quarter Quarter (1)
------- ---------- ------- -----------

2000
- ----
Net revenues................................................ $76,222 $88,267 $98,374 $116,447
Gross profit................................................ $35,177 $36,139 41,711 $ 45,303
Net income.................................................. $20,276 $ 7,848 $20,169 $ 10,615
Earnings per common share - basic........................... $ 0.36 $ 0.14 $ 0.30 $ 0.16
Earnings per common share--diluted.......................... $ 0.36 $ 0.14 $ 0.29 $ 0.16
Pro forma net income........................................ $12,499 $ 6,851 $15,721 $ 9,478
Pro forma earnings per common share - basic and diluted..... $ 0.22 $ 0.12 $ 0.23 $ 0.14

1999
- ----
Net revenues................................................ $39,042 $53,412 $65,199 $ 93,821
Gross profit................................................ $14,011 $22,485 $27,870 $ 40,082
Net income.................................................. $ 5,061 $12,234 $17,031 $ 21,704
Earnings per common share - basic and diluted............... $ 0.09 $ 0.22 $ 0.30 $ 0.38
Pro forma net income........................................ $ 2,801 $ 7,222 $10,198 $ 13,010
Pro forma earnings per common share - basic and diluted..... $ 0.05 $ 0.13 $ 0.18 $ 0.23


F-21


World Wrestling Federation Entertainment, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(dollars in thousands, except share and per share data)


(1) - Includes the second quarter fiscal 2000 non-cash charge of approximately
$6,020 relating to the granting of stock options to certain performers who are
independent contractors.

(2) - Includes the fourth quarter fiscal 2000 non-cash charge of approximately
$9,310 ($5,660, net of tax) relating to the Company's nonforfeitable agreement
with Viacom/CBS to aquire approximately 2.3 million newly issued shares of the
Company's Class A common stock.


18. Subsequent Events

Purchase of WWF NY Entertainment Complex

On May 3, 2000, the Company acquired net assets of approximately $21,000 of the
WWF NY entertainment complex from its licensee for $24,500. The Company will
account for this transaction as a purchase. Goodwill arising as a result of this
transaction amounted to approximately $3,500 which will be amortized over 10
years.

NBC Agreements

On June 12, 2000, the Company entered into a venture with National Broadcasting
Company, Inc. ("NBC") to own and fund a professional football league, XFL. Both
the Company and NBC own 50% of the league, which owns all eight football teams.
In accordance with the terms of the agreement, the Company will control the
operations of the venture and, accordingly, will consolidate such operations in
its financial statements until such time that NBC converts its non-voting equity
into voting equity. NBC will, however, fund a 50% share of the venture's cash
needs from the inception of the agreement. For income tax purposes, both NBC and
the Company will allocate the operations equally in accordance with federal tax
law. On June 12, 2000, NBC purchased approximately 2.3 million newly issued
shares of the Company's Class A common stock at $13 per share for a total
investment of $30,000. As a result of the stock purchase, the Company will
record a non-cash charge of $10,700 which will be amortized over approximately
30 months, commencing in the first quarter of fiscal 2001.

Viacom/CBS Agreeement

On July 28, 2000 Viacom/CBS purchased approximately 2.3 million newly issued
shares of the Company's Class A common stock at $13 per share for a total
investment of $30,000.

F-22


SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

(In Thousands)



Balance Additions
---------
At Charged to Balance at
Beginning Costs and End of
Description of Period Expenses Deductions(1) Period
----------- --------- -------- ------------- ------

For the Year Ended April 30, 2000
Allowance for doubtful accounts deducted
from accounts receivable.................. $ 920 $ 113 $ -- $1,033
Inventory obsolesence....................... 1,530 1,174 (633) 2,071
For the Year Ended April 30, 199
Allowance for doubtful accounts deducted
from accounts receivable................. -- 920 -- 920
Inventory obsolesence....................... -- 1,530 -- 1,530
For the Year Ended April 30, 1998
Allowance for doubtful accounts deducted
from accounts receivable.................. -- -- -- --
Inventory obsolesence....................... 124 -- (124) --


(1) Deductions are comprised of disposals of obsolete inventory.

F-23