You should read the following discussion in conjunction with the consolidated
financial statements and related notes included elsewhere in this report.
Our operations are organized around the following principal activities:
Media:
?The Media segment reflects the production and monetization of long-form and
short-form video content across various platforms, including WWE Network,
broadcast and pay television, digital and social media, as well as filmed
entertainment. Across these platforms, revenues principally consist of content
rights fees, subscriptions to WWE Network, and advertising and sponsorships.
Effective March 18, 2021, the domestic monetization of WWE Network is generated
from content license fees and certain shared sponsorship revenues from NBC
Universal ("NBCU"). Media segment revenues for the three months ended March 31,
2021 include the upfront revenue recognition related to the delivery of certain
intellectual property rights under this agreement.
Live Events:
?Live events provide ongoing content for our media platforms. Live Event segment
revenues consist primarily of ticket sales, including primary and secondary
distribution, revenues from events for which we receive a fixed fee, as well as
the sale of travel packages associated with the Company's global live events. As
a result of the global spread of the coronavirus pandemic ("COVID-19"), these
revenues have been greatly limited since March 2020 and we expect this pattern
to continue into 2021 for an indeterminate period.
Consumer Products:
?The Consumer Products segment engages in the merchandising of WWE branded
products, such as video games, toys and apparel, through licensing arrangements
and direct-to-consumer sales. Revenues principally consist of royalties and
licensee fees related to WWE branded products, and sales of merchandise
distributed at our live events and through eCommerce platforms.
Results of Operation
The Company presents Adjusted OIBDA as the primary measure of segment profit
(loss). The Company defines Adjusted OIBDA as operating income before
depreciation and amortization, excluding stock-based compensation, certain
impairment charges and other non-recurring material items. Adjusted OIBDA
includes depreciation and amortization expenses directly related to supporting
the operations of our segments, including content production asset amortization,
depreciation and amortization of costs related to content delivery and
technology assets utilized for WWE Network, as well as amortization of
right-of-use assets related to finance leases of equipment used to produce and
broadcast our live events. The Company believes the presentation of Adjusted
OIBDA is relevant and useful for investors because it allows investors to view
our segment performance in the same manner as the primary method used by
management to evaluate segment performance and make decisions about allocating
resources. Additionally, we believe that Adjusted OIBDA is a primary measure
used by media investors, analysts and peers for comparative purposes.
Adjusted OIBDA is a non-GAAP financial measure and may be different than
similarly titled non-GAAP financial measures used by other companies. A
limitation of Adjusted OIBDA is that it excludes depreciation and amortization,
which represents the periodic charge for certain fixed assets and intangible
assets used in our business. Additionally, Adjusted OIBDA excludes stock-based
compensation, a non-cash expense that may vary between periods with limited
correlation to underlying operating performance, as well as other non-recurring
material items. Adjusted OIBDA should not be regarded as an alternative to
operating income or net income as an indicator of operating performance, or to
the statement of cash flows as a measure of liquidity, nor should it be
considered in isolation or as a substitute for financial measures prepared in
accordance with GAAP. We believe that operating income is the most directly
comparable GAAP financial measure to Adjusted OIBDA. See Note 3, Segment
Information, in the accompanying consolidated financial statements for a
reconciliation of Adjusted OIBDA to operating income for the periods presented.
Unallocated corporate general and administrative expenses largely relate to
corporate functions such as finance, legal, human resources, facilities and
information technology. These unallocated corporate general and administrative
expenses will be shown, as applicable, as a reconciling item in tables where
segment and consolidated results are both shown.
29
--------------------------------------------------------------------------------
Table of Contents
Summary
Three Months Ended March 31, 2021 compared to Three Months Ended March 31, 2020
(dollars in millions, except where noted)
The following tables present our consolidated results followed by our Adjusted
OIBDA results:
Three Months Ended
March 31, Increase
2021 2020 (decrease)
Net revenues
Media $ 242.0 $ 256.6 (6) %
Live Events 0.5 17.5 (97) %
Consumer Products 21.0 16.9 24 %
Total net revenues (1) 263.5 291.0 (9) %
Operating expenses
Media 123.9 144.4 (14) %
Live Events 4.4 18.0 (76) %
Consumer Products 13.8 13.0 6 %
Total operating expenses (2) 142.1 175.4 (19) %
Marketing and selling expenses
Media 17.3 18.9 (8) %
Live Events 0.5 2.8 (82) %
Consumer Products 1.1 1.0 10 %
Total marketing and selling expenses 18.9 22.7 (17) %
General and administrative expenses 26.6 28.7 (7) %
Depreciation and amortization 10.8 10.9 (1) %
Operating income 65.1 53.3 22 %
Interest expense 8.5 8.2 4 %
Other income (expense), net 0.5 (10.4) 105 %
Income before income taxes 57.1 34.7 65 %
Provision for income taxes 13.3 8.5 56 %
Net income $ 43.8 $ 26.2 67 %
(1)Our consolidated net revenues decreased by $27.5 million, or 9%, in the
current year quarter as compared to the prior year quarter. This decrease was
driven by the absence of a large-scale international event, coupled with $18.6
million of lower ticket and merchandise sales from our live events due to the
cancellation of ticketed events. These declines were partially offset by
increased network revenues of $35.9 million, primarily driven by the upfront
revenue recognition related to the delivery of certain WWE Network intellectual
property rights, coupled with content license fees associated with the delivery
of new WWE Network content. Additionally, the current year quarter includes $6.5
million in incremental revenues primarily associated with the contractual
escalations of our key domestic distribution agreements for our flagship
programs, RAW and SmackDown, as well as additional revenues of $6.3 million
driven by increased e-commerce orders and sales of our licensed games and toy
products. For further analysis, refer to Management's Discussion and Analysis of
our business segments.
(2)Our consolidated operating expenses decreased by $33.3 million, or 19%, in
the current year quarter as compared to the prior year quarter. This decrease
was primarily driven by $28.2 million of lower content creation and event
related costs due to the absence of a large-scale international event and, to a
lesser extent, the cancellation of ticketed events. For further analysis, refer
to Management's Discussion and Analysis of our business segments.
Three Months Ended
March 31,
2021 2020
Reconciliation of Operating Income to Adjusted
OIBDA % of Rev % of Rev
Operating income $ 65.1 25 % $ 53.3 18 %
Depreciation and amortization 10.8 4 % 10.9 4 %
Stock-based compensation 8.0 3 % 13.1 4 %
Other adjustments - - % - - %
Adjusted OIBDA $ 83.9 32 % $ 77.3 27 %
30
--------------------------------------------------------------------------------
Table of Contents
Three Months Ended
March 31, Increase
2021 2020 (decrease)
Adjusted OIBDA
Media $ 106.6 $ 102.6 4 %
Live Events (4.3) (2.6) (65) %
Consumer Products 6.7 3.8 76 %
Corporate (25.1) (26.5) 5 %
Total Adjusted OIBDA $ 83.9 $ 77.3 9 %
Media
The following tables present the performance results and key drivers for our
Media segment:
Three Months Ended
March 31, Increase
2021 2020 (decrease)
Net Revenues
Network (including pay-per-view) (1) $ 79.4 $ 43.5 83 %
Core content rights fees (2) 139.7 133.2 5 %
Advertising and sponsorship 15.6 17.4 (10) %
Other (3) 7.3 62.5 (88) %
Total net revenues $ 242.0 $ 256.6 (6) %
(1)Network revenues consist of revenues earned from fees from customers of WWE
Network and license fees under international licensed partner agreements, as
well as amounts earned from our pay-per-view broadcasts. Effective March 18,
2021, network revenues include the domestic monetization of WWE Network
generated from content license fees. Network revenues for the three months ended
March 31, 2021 include the upfront revenue recognition related to the delivery
of certain WWE Network intellectual property rights.
(2)Core content rights fees consist primarily of licensing revenues earned from
the distribution of our flagship programs, RAW and SmackDown, as well as our NXT
programming, through global broadcast, pay television and digital platforms.
(3)Other revenues within our Media segment reflect revenues earned from the
distribution of other WWE content, including, but not limited to, certain live
in-ring programming content in international markets, scripted, reality and
other programming, as well as theatrical and direct-to-home video releases.
Three Months Ended
March 31,
2021 2020
Reconciliation of Operating Income to Adjusted
OIBDA % of Rev % of Rev
Operating income $ 97.1 40 % $ 89.3 35 %
Depreciation and amortization 3.7 2 % 3.9 2 %
Stock-based compensation 5.8 2 % 9.4 4 %
Other adjustments - - % - - %
Adjusted OIBDA $ 106.6 44 % $ 102.6 40 %
Media net revenues decreased by $14.6 million, or 6%, in the current year
quarter as compared to the prior year quarter. Other revenues within the Media
segment declined by $55.2 million, or 88%, driven primarily by the absence of a
large-scale international event as a result of COVID-19. This decline was
partially offset by an increase in Network revenues of $35.9 million, or 83%,
primarily driven by the upfront revenue recognition related to the delivery of
certain WWE Network intellectual property rights, coupled with content license
fees associated with the delivery of new WWE Network content. Additionally, our
core content rights fees increased by $6.5 million, or 5%, driven primarily by
the contractual escalations of our key domestic distribution agreements for our
flagship programs, RAW and SmackDown.
Media Adjusted OIBDA as a percentage of revenues increased in the current year
quarter as compared to the prior year quarter. This increase was driven by the
incremental network and core content rights fees revenues, as discussed above,
partially offset by the absence of a large-scale international event.
31
--------------------------------------------------------------------------------
Table of Contents
Live Events
The following tables present the performance results and key drivers for our
Live Events segment:
Three Months Ended
March 31, Increase
2021 2020 (decrease)
Net Revenues
North American ticket sales $ - $ 15.2 (100) %
International ticket sales - 0.2 (100) %
Advertising and sponsorship - 0.1 (100) %
Other (1) 0.5 2.0 (75) %
Total net revenues $ 0.5 $ 17.5 (97) %
Operating Metrics (2)
Total live event attendance - 259,000 (100) %
Number of North American events - 41 (100) %
Average North American attendance - 6,320 (100) %
Average North American ticket price (dollars) $ - $ 53.46 (100) %
Number of international events
- 1 (100) %
Average international attendance - - - %
Average international ticket price (dollars) $ - $ - - %
(1)Other revenues within our Live Events segment primarily consists of the sale
of travel packages associated with the Company's global live events and
commission earned through secondary ticketing, as well as revenues from events
for which the Company receives a fixed fee.
(2)Metrics exclude the events for our domestic and United Kingdom NXT brands.
These are our developmental brands that typically conduct their events in
smaller venues with lower ticket prices. We did not conduct any ticketed NXT
events in the current year quarter. We conducted 47 events with paid attendance
of 40,900 and average ticket prices of $37.45 in the prior year quarter.
Three Months Ended
March 31,
2021 2020
Reconciliation of Operating Loss to Adjusted OIBDA % of Rev % of Rev
Operating loss $ (4.5) (900) % $ (3.2) (18) %
Depreciation and amortization - - % - - %
Stock-based compensation 0.2 40 % 0.6 3 %
Other adjustments - - % - - %
Adjusted OIBDA $ (4.3) (860) % $ (2.6) (15) %
Live Events net revenues, which include revenues from ticket sales and travel
packages, decreased by $17.0 million, or 97%, in the current year quarter as
compared to the prior year quarter. Revenues from our ticket sales decreased by
$15.4 million, or 100%, due to the impact of 42 fewer events during the current
year quarter, primarily due to the cancellation of ticketed events.
Live Events Adjusted OIBDA decreased in the current year quarter as compared to
the prior year quarter. This decrease was driven by the impact of the
cancellation of ticketed events.
32
--------------------------------------------------------------------------------
Table of Contents
Consumer Products
The following tables present the performance results and key drivers for our
Consumer Products segment:
Three Months Ended
March 31, Increase
2021 2020 (decrease)
Net Revenues
Consumer product licensing $ 11.0 $ 7.7 43 %
eCommerce 10.0 6.0 67 %
Venue merchandise - 3.2 (100) %
Total net revenues $ 21.0 $ 16.9 24 %
Operating Metrics
Average eCommerce revenue per order (dollars) $ 62.52 $ 49.49 26 %
Number of eCommerce orders
158,700 120,100 32 %
Venue merchandise domestic per capita spending
(dollars) $ - $ 10.41 (100) %
Three Months Ended
March 31,
2021 2020
Reconciliation of Operating Income to Adjusted
OIBDA % of Rev % of Rev
Operating income $ 6.2 30 % $ 2.9 17 %
Depreciation and amortization - - % - - %
Stock-based compensation 0.5 2 % 0.9 5 %
Other adjustments - - % - - %
Adjusted OIBDA $ 6.7 32 % $ 3.8 22 %
Consumer Products net revenues increased by $4.1 million, or 24%, in the current
year quarter as compared to the prior year quarter. eCommerce revenues increased
by $4.0 million, or 67%, primarily due to a 32% increase in the volume of online
merchandise orders, coupled with a 26% increase in average revenue per order,
which was driven, in part, by changes in consumer spending habits. Consumer
product licensing revenue increased by $3.3 million, or 43%, primarily due to
higher sales of the Company's licensed video games and toys. These increases
were partially offset by venue merchandise revenues declines of $3.2 million, or
100%, primarily driven by the cancellation of ticketed events in the current
year quarter.
Consumer Products Adjusted OIBDA as a percentage of revenues increased in the
current year quarter as compared to the prior year quarter. This increase was
driven by increased revenues, as discussed above.
Corporate
Unallocated corporate general and administrative expenses largely relate to
corporate administrative functions, including finance, investor relations,
community relations, corporate communications, information technology, legal,
human resources and our Board of Directors. The Company does not allocate these
general and administrative expenses to its business segments.
Three Months Ended
March 31,
2021 2020
Reconciliation of Operating Loss to Adjusted OIBDA % of Rev % of Rev
Operating loss $ (33.7) (13) % $ (35.7) (12) %
Depreciation and amortization 7.1 3 % 7.0 2 %
Stock-based compensation 1.5 1 % 2.2 1 %
Other adjustments - - % - - %
Adjusted OIBDA $ (25.1) (10) % $ (26.5) (9) %
Corporate Adjusted OIBDA as a percentage of total revenues remained essentially
unchanged in the current year quarter as compared to the prior year quarter.
33
--------------------------------------------------------------------------------
Table of Contents
Depreciation and Amortization
Three Months Ended
March 31, Increase
2021 2020 (decrease)
Depreciation and amortization $ 10.8 $ 10.9 (1) %
Depreciation and amortization expense remained flat in the current year quarter
as compared to the prior year quarter.
Interest Expense
Three Months Ended
March 31, Increase
2021 2020 (decrease)
Interest expense $ 8.5 $ 8.2 4 %
Interest expense, which relates primarily to interest and amortization
associated with our convertible notes, our real estate and equipment finance
leases, the revolving credit facility and mortgage, was essentially unchanged in
the current year quarter as compared to the prior year quarter.
Other Income (Expense), Net
Three Months Ended
March 31, Increase
2021 2020 (decrease)
Other income (expense), net $ 0.5 $ (10.4) 105 %
Other income (expense), net is comprised of interest income, gains and losses
recorded on our equity investments, realized translation gains and losses, and
rental income. The increase of $10.9 million in the current year quarter is
driven by the timing of certain impairment charges related to our equity
investments. In the prior year quarter, we recognized $11.5 million of
impairment charges on our investments in an apparel and lifestyle brand and a
themed attraction touring company resulting from significant adverse changes in
the economic and market conditions caused by COVID-19 combined with lower sales
forecasts.
Income Taxes
Three Months Ended
March 31, Increase
2021 2020 (decrease)
Provision for (benefit from) income taxes $ 13.3 $ 8.5 56 %
Effective tax rate 23 % 25 %
The effective tax rate decreased in the current year quarter as compared to the
prior year quarter. This decline was primarily driven by a reduction in excess
tax expenses relating to share-based compensation.
?
34
--------------------------------------------------------------------------------
Table of Contents
Liquidity and Capital Resources
We had cash and cash equivalents and short-term investments of $461.1 million
and $593.4 million as of March 31, 2021 and December 31, 2020, respectively. Our
short-term investments consist primarily of U.S. Treasury securities, corporate
bonds, municipal bonds, and government agency bonds. Our debt balance totaled
$218.3 million and $316.8 million as of March 31, 2021 and December 31, 2020,
respectively, and includes the carrying value of $196.2 million and $194.7
million related to our convertible senior notes due 2023 as of March 31, 2021
and December 31, 2020, respectively.
The COVID-19 pandemic has negatively impacted the global economy, disrupted
business operations and created significant volatility and disruption to
financial markets. Significant uncertainty remains as to the potential impact of
the COVID-19 pandemic on our operations, and on the global economy as a whole.
The extent and duration of the pandemic could continue to disrupt global markets
and may affect our ability to generate cash from operations. Additionally, refer
to the risk factors previously disclosed in our Annual Report on Form 10-K for
the year ended December 31, 2020, which provides a discussion of risk factors
related to COVID-19.
We believe that our existing cash and cash equivalents and short-term investment
balances, along with cash generated from operations, will be sufficient to meet
our ongoing operating requirements for at least the next twelve months,
inclusive of dividend payments, debt service, content production activities,
planned capital expenditures and for any discretionary repurchase of shares of
our common stock under our approved share repurchase program (see below for
further details). The Company also has available capacity of $200.0 million
under its Revolving Credit Facility (defined below), which may be used, as
needed, for general corporate purposes. In addition, beginning on March 18,
2021, we commenced a multi-year agreement to grant the exclusive domestic
streaming and video-on-demand rights to WWE Network content via NBCU's Peacock
paid streaming service. We expect this agreement to provide future ongoing
liquidity to the Company through the generation of enhanced content license
fees.
In February 2019, the Company's Board of Directors authorized a stock repurchase
program of up to $500.0 million of our common stock. Repurchases may be made
from time to time at management's discretion subject to certain pre-approved
parameters and in accordance with all applicable securities and other laws and
regulations. The extent to which WWE repurchases its shares, and the timing of
such repurchases, will depend upon a variety of factors, including liquidity,
capital needs of the business, market conditions, regulatory requirements and
other corporate considerations. Repurchases under this program may be funded by
one or a combination of existing cash balances and free cash flow. The stock
repurchase program does not obligate the Company to repurchase any minimum
dollar amount or number of shares, and may be modified, suspended or
discontinued at any time. During the three months ended March 31, 2021, we
repurchased 1.5 million shares of our common stock in the open market for an
aggregate cost of $75.0 million.
As it relates to our Convertible Notes (defined below), which pursuant to the
terms are currently convertible, we believe that if note holders elected to
convert their notes within the next twelve months, the Company has sufficient
means to settle the Convertible Notes using any combination of existing cash and
cash equivalents and investment balances, borrowings under our Revolving Credit
Facility, cash generated from operations or through the issuance of shares.
Debt Summary and Borrowing Capacity
The Company has $215.0 million aggregate principal amount of 3.375% convertible
senior notes (the "Convertible Notes") due December 15, 2023. See Note 13,
Convertible Debt, and Note 5, Earnings Per Share, in the Notes to Consolidated
Financial Statements for further information on the Convertible Notes, including
the dilutive nature of the Convertible Notes.
In May 2019, the Company entered into an amended and restated $200.0 million
senior unsecured revolving credit facility with a syndicated group of banks,
with JPMorgan Chase Bank, N.A. acting as Administrative Agent (the "Revolving
Credit Facility"). The Revolving Credit Facility has a maturity date of May 24,
2024. In April 2020, as a precautionary measure to further strengthen liquidity
due to the impact of COVID-19, the Company borrowed $200.0 million under its
Revolving Credit Facility. In December 2020, the Company repaid $100.0 million
of the borrowings, and in January 2021, the Company repaid the remaining $100.0
million. As of March 31, 2021, the Company was in compliance with the provisions
of our Revolving Credit Facility, there were no amounts outstanding, and the
Company had available capacity under the terms of the facility of $200.0
million.
In September 2016, the Company acquired land and a building located in Stamford,
Connecticut adjacent to our production facility. In connection with the
acquisition, we assumed future obligations under a loan agreement, in the
principal amount of $23.0 million, which loan is secured by a mortgage on the
property. Pursuant to the loan agreement, the assets of WWE Real Estate, a
subsidiary of the Company, represent collateral for the underlying mortgage,
therefore these assets will not be available to satisfy debts and
35
--------------------------------------------------------------------------------
Table of Contents
obligations due to any other creditors of the Company. As of March 31, 2021 and
December 31, 2020, the amounts outstanding of the mortgage were $22.0 million
and $22.1 million, respectively.
Cash Flows from Operating Activities
Cash generated from operating activities was $59.9 million in the three months
ended March 31, 2021, as compared to $65.9 million for the corresponding period
in the prior year. The $6.0 million decrease in the current year period was
primarily driven by the timing of collections associated with WWE Network
revenue, partially offset by improved operating performance.
In the current year period, we spent $5.8 million on content production
activities, including WWE's Most Wanted Treasures, A&E: Biography, Total Bellas,
and various programs for WWE Network, as compared to $9.3 million in the prior
year period. We anticipate spending approximately $15 million to $25 million on
content production activities during the remainder of the current year. We
received content production incentives of $2.5 million in the current year
period, as compared to $0.4 million received in the prior year period. We
anticipate receiving approximately $15 million of content production related
incentives during the remainder of the year.
Our accounts receivable represents a significant portion of our current assets
and relate principally to a limited number of distributors and licensees. At
March 31, 2021, our largest receivable balance from customers was 38% of our
gross accounts receivable. Changes in the financial condition or operations of
our distributors, customers or licensees may result in increased delayed
payments or non-payments which would adversely impact our cash flows from
operating activities and/or our results of operations. We believe credit risk
with respect to accounts receivable is limited due to the generally high credit
quality of the Company's major customers.
Cash Flows from Investing Activities
Cash used in investing activities was $35.9 million in the three months ended
March 31, 2021, as compared to cash provided of $16.5 million in the prior year
period. During the current year period, we purchased $52.4 million of new
investments and received proceeds from the maturities of our short-term
investments of $22.8 million, as compared to proceeds of $33.5 million and
purchases of $8.7 million in the prior year period. Capital expenditures
decreased by $2.1 million in the current year period. Due to the uncertainty
created from the COVID-19 pandemic, we delayed certain planned capital
expenditures, including the construction activity on the Company's new global
headquarters space in Stamford, Connecticut. Capital expenditures for the
remainder of the current year are estimated to range between $65 million and $85
million, with a large portion of this spend associated with the resumed buildout
of the Company's new global headquarters.
Cash Flows from Financing Activities
Cash used in financing activities was $185.7 million for the three months ended
March 31, 2021, as compared to $14.3 million for the prior year period. The
Company repaid $100.0 million from borrowings under the Revolving Credit
Facility and paid $75.0 million for stock repurchases under its approved stock
repurchase program during the current year period. The Company made dividend
payments of $9.2 million and $9.3 million during the three months ended
March 31, 2021 and 2020, respectively. Additionally, the Company made employee
payroll withholding tax payments of $0.6 million in the current year period as
compared to $2.6 million in the prior year period related to the net settlement
upon vesting of employee equity awards.
Contractual Obligations
Other than for obligations in the ordinary course of business, there have been
no significant changes to our contractual obligations that were previously
disclosed in our Report on Form 10-K for the fiscal year ended December 31,
2020.
Application of Critical Accounting Policies
There have been no significant changes to our critical accounting policies that
were previously disclosed in our Report on Form 10-K for our fiscal year ended
December 31, 2020 or in the methodology used in formulating these significant
judgments and estimates that affect the application of these policies.
Recent Accounting Pronouncements
The information set forth under Note 2 to the Consolidated Financial Statements
under the caption "Recent Accounting Pronouncements" is incorporated herein by
reference.
36
--------------------------------------------------------------------------------
Table of Contents
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 Form 10-K and our other SEC filings, our press releases
and comments made in earnings calls, investor presentations or otherwise to the
public, 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 Form 10-K and our other SEC filings, in
press releases, earnings calls and other statements made by our authorized
officers: (i) risks relating to the impact of the COVID-19 outbreak on our
business, results of operations and financial condition; (ii) risks relating to
entering, maintaining and renewing major distribution, licensing and event
agreements; (iii) risks relating to a rapidly evolving media landscape; (iv)
risks relating to WWE Network; (v) our need to continue to develop creative and
entertaining programs and events; (vi) our need to retain or continue to recruit
key performers; (vii) the risk of a decline in the popularity of our brand of
sports entertainment, including as a result of changes in the social and
political climate; (viii) the possible unexpected loss of the services of
Vincent K. McMahon; (ix) possible adverse changes in the regulatory atmosphere
and related private sector initiatives; (x) the highly competitive, rapidly
changing and increasingly fragmented nature of the markets in which we operate
and/or our inability to compete effectively, especially against competitors with
greater financial resources or marketplace presence; (xi) uncertainties
associated with international markets including possible disruptions and
reputational risks; (xii) our difficulty or inability to promote and conduct our
live events and/or other businesses if we do not comply with applicable
regulations; (xiii) our dependence on our intellectual property rights, our need
to protect those rights, and the risks of our infringement of others'
intellectual property rights; (xiv) risks relating to the complexity of our
rights agreements across distribution mechanisms and geographical areas; (xv)
the risk of substantial liability in the event of accidents or injuries
occurring during our physically demanding events including, without limitation,
claims alleging traumatic brain injury; (xvi) exposure to risks relating to
large public events as well as travel to and from such events; (xvii) risks
inherent in our feature film business; (xviii) a variety of risks as we expand
into new or complementary businesses and/or make strategic investments and/or
acquisitions; (xix) risks related to our computer systems and online operations;
(xx) risks relating to privacy norms and regulations; (xxi) risks relating to a
possible decline in general economic conditions and disruption in financial
markets; (xxii) risks relating to our accounts receivable; (xxiii) risks
relating to our indebtedness including our convertible notes; (xxiv) potential
substantial liabilities if litigation is resolved unfavorably; (xxv) our
potential failure to meet market expectations for our financial performance;
(xxvi) through his beneficial ownership of a substantial majority of our Class B
common stock, our controlling stockholder, Vincent K. McMahon, exercises control
over our affairs, and his interests may conflict with the holders of our Class A
common stock; (xxvii) a substantial number of shares are eligible for sale by
Mr. McMahon and members of his family or trusts established for their benefit,
and the sale, or the perception of possible sales, of those shares could lower
our stock price; and (xxviii) risks related to the volatility of our Class A
common stock. In addition, our dividend is dependent on a number of factors,
including, among other things, our liquidity and historical and projected cash
flow, strategic plan (including alternative uses of capital), our financial
results and condition, contractual and legal restrictions on the payment of
dividends (including under our revolving credit facility), general economic and
competitive conditions and such other factors as our Board of Directors may
consider relevant. Forward-looking statements made by the Company speak only as
of the date made, are subject to change without any obligation on the part of
the Company to update or revise them, and undue reliance should not be placed on
these statements. For more information about risks and uncertainties associated
with the Company's business, please refer to the "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Risk Factors" sections of this Form 10-Q and our other SEC filings, including,
but not limited to, our annual report on Form 10-K.
© Edgar Online, source Glimpses