WWE INVESTOR PRESENTATION - FEBRUARY 2019 - WWE Corporate
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WWE INVESTOR PRESENTATION
FEBRUARY 2019
FORWARD-LOOKING STATEMENTS
This presentation contains forward-looking statements pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995, which are subject to
various risks and uncertainties. These risks and uncertainties include, without limitation, risks relating to: entering, maintaining and renewing major distribution
agreements; WWE Network (including the risk that we are unable to attract, retain and renew subscribers); our need to continue to develop creative and entertaining
programs and events; the possibility of a decline in the popularity of our brand of sports entertainment; the continued importance of key performers and the services
of Vincent K. McMahon; possible adverse changes in the regulatory atmosphere and related private sector initiatives; the highly competitive, rapidly changing and
increasingly fragmented nature of the markets in which we operate and greater financial resources or marketplace presence of many of our competitors;
uncertainties associated with international markets; our difficulty or inability to promote and conduct our live events and/or other businesses if we do not comply with
applicable regulations; our dependence on our intellectual property rights, our need to protect those rights, and the risks of our infringement of others’ intellectual
property rights; the complexity of our rights agreements across distribution mechanisms and geographical areas; potential substantial liability in the event of
accidents or injuries occurring during our physically demanding events including, without limitation, claims relating to CTE; large public events as well as travel to and
from such events; our feature film business; our expansion into new or complementary businesses and/or strategic investments; our acquisitions; our computer
systems and online operations; privacy norms and regulations; a possible decline in general economic conditions and disruption in financial markets; our accounts
receivable; our indebtedness; litigation; our potential failure to meet market expectations for our financial performance, which could adversely affect our stock; Vincent
K. McMahon exercises control over our affairs, and his interests may conflict with the holders of our Class A common stock; a substantial number of shares are eligible
for sale by the McMahons and the sale, or the perception of possible sales, of those shares could lower our stock price; and the relatively small public “float” 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 and are subject to change without any obligation on the part of the Company to update or revise
them. 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 the Company’s SEC filings,
including, but not limited to, our annual report on Form 10-K and quarterly reports on Form 10-Q.
This presentation contains non-GAAP financial information, including Adjusted OIBDA, Net Debt and Free Cash Flow. We define Adjusted OIBDA as operating income
excluding depreciation and amortization, stock-based compensation expense, certain impairment charges and other non-recurring material items that would impact
the comparability of results between periods. Adjusted OIBDA includes amortization expenses directly related to the Company’s revenue generating activities,
including the amortization of feature film, television production and WWE Network programming assets. The Company believes the presentation of Adjusted OIBDA
is relevant and useful for investors because it allows them to view the Company’s segment performance in the same manner as the primary method used by
management to evaluate segment performance and to make decisions regarding the allocation of resources. Additionally, the Company believes that Adjusted OIBDA
is a primary measure used by media investors, analysts and peers for comparative purposes. In addition, we define Free Cash Flow as net cash provided by operating
activities less cash used for capital expenditures. We believe that operating income is the most directly comparable GAAP financial measure to Adjusted OIBDA, Total
Debt is the most directly comparable GAAP financial measure to Net Debt, and net cash provided by operating activities is the most directly comparable GAAP
financial measure to Free Cash Flow. Neither Adjusted OIBDA, Net Debt nor Free Cash Flow should be regarded as an alternative to the most directly comparably
GAAP financial measure as an indicator of operating performance, or to the statement of cash flows as a measure of liquidity, nor should either metric be considered in
isolation or as a substitute for financial measures prepared in accordance with GAAP. See the Appendix at the end of this presentation for a reconciliation of the non-
GAAP measures presented herein.
2
TRANSFORMING TO A NEW
MEDIA GROWTH MODEL
Investment Rationale
1 ONE-OF-A-KIND MEDIA COMPANY
2 Executing Successful Transformation
3 Leveraging a Powerful Media Ecosystem
4 Multiple Growth Drivers
5 Strong Financial Outlook
THE NEW WWE
Delivering Sustained Growth
3
DIVERSIFIED
REVENUE STREAMS, BUSINESS MODEL
GLOBAL PLAYER 2018 Revenue
AT A GLANCE:
2018 HIGHLIGHTS
11% $930M
16%
Media
73% Live Events
PERFORMANCE (YOY)
Consumer Products
$930M $115M
Up $129M Up $39M
RECORD REVENUE OPERATING INCOME
$930M
$179M $154M 34%
Up $43M Up $83M North America
ADJUSTED OIBDA1 FREE CASH FLOW2
66% International
1 Adjusted OIBDA is a non-GAAP metric. A definition of Adjusted OIBDA, which excludes stock-based
compensation expense, and a reconciliation to Operating income can be found in WWE’s Q4 2018
earnings materials dated 02/07/19 and in the appendix of this presentation
2 Free Cash Flow is a non-GAAP metric. A definition of Free Cash Flow and reconciliation to Net cash
provided by operating activities can be found in WWE’s Q4 2018 earnings materials dated 02/07/19 and
in the appendix to this presentation
4
KEY GROWTH DRIVERS CONTRIBUTING
TO RECORD RESULTS
WWE NETWORK AVERAGE TOP 7 TV AGREEMENTS CONTINUED GROWTH IN
PAID SUBSCRIBERS CONTRACTUAL ESCALATION INTERNATIONAL REVENUE
1.65M ~$235M $318M
1.14M
Axis Title
~$130M $170M
+13% +15% +23%
2015
2015 2018
2018 2014
2014 2017
2018 2014
2015 2017
2018
2018 Revenues 2x Historic Predictable Revenue Growth;
Record Highs
PPV Revenues +~$105M from 2014 to 2018
Note: Growth rates shown represent compound annual growth rates (CAGRs) over the relevant period
5
COMPELLING CONTENT & OMNICHANNEL DISTRIBUTION
SUPPORTS A HIGHLY ENGAGED FANBASE
~1,500 HOURS OF CONTENT CREATED 5 - 6 BILLION HOURS OF CONTENT CONSUMED1
PAY TELEVISION
In-ring weekly programs DIRECT TO AD SUPPORTED
CONSUMER DIGITAL & SOCIAL
Reality
WWE Network Digital & Social
Documentary
5% 20%
DIRECT TO CONSUMER
PPVs (Playoffs and Finals)
In-ring weekly programs
Documentary/ Lifestyle
WEEKLY PROGRAMS WEEKLY PROGRAMS
& PAY-PER-VIEWS & PAY-PER-VIEWS
AD SUPPORTED DIGITAL & SOCIAL
TV-U.S. TV-International
In-ring highlights
Short form original 15% 60%
1Consumption data quoted as a percentage of total consumption in 2018
For additional detail on platforms, refer to pages 16-18 of this presentation
Note: Charts are not to scale but for illustrative purposes only
6
LARGEST SOCIAL
AND DIGITAL SPORTS
PROPERTY IN THE WORLD
980 + MILLION
GLOBAL FOLLOWERS
7
#1 SPORTS CHANNEL
ON
1 2 3
29+ 7+ 5+
BILLION BILLION BILLION
Lifetime video views Lifetime video views Lifetime video views
8
Source: Lifetime views based on Social Blade. Quoted through December 31, 2018
#2 OVERALL CHANNEL
ON
1 2 3
61+ 29+ 27+
BILLION BILLION BILLION
Lifetime video views Lifetime video views Lifetime video views
9
Source: Lifetime views based on Social Blade. Quoted through December 31, 2018
OUR ENDURING GLOBAL APPEAL IS BASED ON
BRINGING HEROES TO LIFE
Brand Development Highlights
HEROES WE CAN
SEE IN OURSELVES
#1
MOST FOLLOWED
ACTIVE U.S. ATHLETE
45M
FOLLOWERS
HEROES WE CAN
LOOK UP TO
Source: http://fanpagelist.com/category/athletes/ 10HAS CREATED HEROES
IN THE RING FOR MORE
THAN 5 DECADES
11TRANSFORMING TO A NEW
MEDIA GROWTH MODEL
Investment Rationale
1 One-of-a-kind Media Company
2 EXECUTING SUCCESSFUL TRANSFORMATION
3 Leveraging a Powerful Media Ecosystem
4 Multiple Growth Drivers
5 Strong Financial Outlook
THE NEW WWE
Delivering Sustained Growth
12EXECUTING TRANSFORMATION
TO NEW GROWTH MODEL
1999-2010 2011-2014 2015+
Traditional Media Model Retooling for New Media Model
Transformation
• TV, Live Events, • Launched • WWE Network
Pay-Per-View direct-to-consumer
• Sustainable growth
WWE Network
• Powerful brand
• Global expansion
• Invested in new model
• Grew globally
• New media ecosystem
13TRANSFORMING TO A NEW
MEDIA GROWTH MODEL
Investment Rationale
1 One-of-a-kind Media Company
2 Executing Successful Transformation
3 LEVERAGING A POWERFUL MEDIA ECOSYSTEM
4 Multiple Growth Drivers
5 Strong Financial Outlook
THE NEW WWE
Delivering Sustained Growth
14In-ring
weekly
programs
Reality Documentary
Playoffs/
Finals
1,500 In-ring
highlights
HOURS
TRANSFORMATION
REFLECTS A UNIQUE
In-ring
weekly Short-form
programs original
MULTI-PLATFORM Documentary/
CONTENT STRATEGY Lifestyle
15PAY TV PROVIDES THE MOST PROFITABLE PLATFORM
FOR MONETIZING OUR FLAGSHIP PROGRAMS
PAY TELEVISION
IN-RING WEEKLY PROGRAMS
Provides Global Scale: 800M+ Homes
Approximately 75% of total viewer
REALITY consumption in 2018
Raw / SmackDown deliver more viewers
in primetime than any US cable network
DOCUMENTARIES
Increasing blue chip / gaming sponsors
16DIGITAL AND SOCIAL CONTENT BUILD BRAND AWARENESS,
ATTRACT NEXT GENERATION AND PROMOTE WWE NETWORK
AD-SUPPORTED DIGITAL & SOCIAL
IN-RING HIGHLIGHTS
45,000+ clips on YouTube
(short-form content)1
31B+ video views across platforms2
Approximately 20% of total viewer
SHORT FORM ORIGINAL consumption2
980M+ social media followers3
1 Total clips on YouTube as of December 31, 2018
2 Ad-supported video on demand (AVOD) consumption includes videos viewed on WWE Platforms (WWE.com and WWE App), Facebook and YouTube. FY 2018 data
3 Represents the aggregate number of followers for each individual digital platform as sourced from each platform. Followers not adjusted for duplication and do not represent unique followers. Data shown as of 12/31/18
17DIRECT TO CONSUMER, WWE NETWORK, OPTIMIZES
VALUE OF PREMIUM AND LONG-TAIL CONTENT
DIRECT TO CONSUMER
PAY-PER-VIEWS
Premium live content (PPVs), originals
and archive
2nd most profitable platform
IN-RING PROGRAMS
Recognized as a leading US SVOD network
(#2 “branded” service)1
DOCUMENTARIES/ LIFESTYLE
Hours consumed trailed only CBS, ABC
and NBC on a per household basis2
1 WWE Network rank as a sport video service based on Parks Associates research (November 7, 2018)
2 Viewer hours per household for English-language broadcast and cable entertainment networks are based on live +7D total day data. Source: Nielsen Media Research, NPOWER. WWE Network data is per internal estimate
18TRANSFORMING TO A NEW
MEDIA GROWTH MODEL
Investment Rationale
1 One-of-a-kind Media Company
2 Executing Successful Transformation
3 Leveraging A Powerful Media Ecosystem
4 MULTIPLE GROWTH DRIVERS
5 Strong Financial Outlook
THE NEW WWE
Delivering Sustained Growth
19WELL-POSITIONED TO CAPITALIZE
ON CHANGING MEDIA LANDSCAPE
KEY TRENDS
PLAY TO
Value of live viewership
Acceleration of direct-to-consumer
Next generation consuming content on digital
and social platforms
Growth in broadband globally STRENGTHS
Social platforms have become
video destinations
Growth of middle-class in emerging markets
20GOING FORWARD,
MULTIPLE GROWTH DRIVERS1
KEY GROWTH DRIVERS
PERCENT REVENUE
TODAY2
Increase monetization
of premium content
~73%
Close international gap between
engagement and revenue
Utilize data to drive 360°
business model
Live Events
TIME
1 Graph is not to scale and for illustrative purposes only
2 Stated as of 12/31/18
21WWE NETWORK
POTENTIAL DRIVEN BY
WWE’S GLOBAL SCALE
311M BROADBAND HOMES
In top global 16 markets
159M
159M WWE FAN HOMES
More than half of homes have an affinity for WWE
Note: Estimates are for WWE’s top 16 markets and based on U.S. WWE Consumer Survey. 2015 Broadband household forecast per SNL Kagan (August 2014). Nielsen information is US only, 2015YTD: 12/29/14 - 12/20/15,
WWE = Raw on USA & SmackDown on Syfy, C3 data, Based on P2+ (000)
22AVERAGE PAID SUBSCRIBERS
+31%
CAGR
1.65M
1.53M
1.42M
1.14M
WWE NETWORK
HAS ACHIEVED
SUSTAINED 0.56M
YEAR-OVER-YEAR
GROWTH
2014 2015 2016 2017 2018
2014 2015 2016 2017 2018
23TV RIGHTS – A CLOSER LOOK
NEW US DISTRIBUTION AGREEMENT
RESULTS IN SIGNIFICANT GROWTH
CORE CONTENT REVENUE: ALL GLOBAL MARKETS1,2
$576
New US distribution agreements
$548 $114 with USA Networks and Fox
$348 Sports, effective October 1, 2019,
$108
Axis Title
$270 $17 increase the average annual value
$244 of WWE’s US distribution to 3.6x
that of the prior deal with NBCU
$331 $440 $462
Existing and New Agreements revenue
2017 2018 2019 2020 2021
grows from $270 MILLION IN 2018 to
2014 2017 $462 MILLION IN 2021
Existing and New Agreements To Be Negotiated
1 Revenue derived from “Existing and New Agreements” is subject to normal risks related to maintaining agreements and
counterparty risks. The Company also has agreements subject to renewal classified as “To Be Negotiated.” For illustrative
purposes, revenues “To Be Negotiated” reflect no future change in annual revenue (i.e. all future years are held equal to the
value of the last year in the current agreement)
2 Data as of 06/26/18. Refer to “WWE Secures Multi-Year Media Rights Deals with USA Network and Fox Sports” release
24INTERNATIONAL REVENUE – A CLOSER LOOK
INTERNATIONAL REVENUE POISED
FOR GROWTH1
Growth will be driven by closing
the gap between engagement
and revenue
Localization of talent and content $318
will continue to be important to
drive engagement 12%
CAGR
China, India, Latin America and
Middle East represent significant $62
long-term opportunities
2014
2004
2017
2018
FUTURE
POTENTIAL
1 $ in millions. Graph is not to scale and for illustrative purposes only 25400+ variables across consumption,
stream type & genre
NETWORK CONSUMPTION
80+ variables across past payment behavior
PAST PAYMENT BEHAVIORS
200+ variables across emails sent
and downstream actions
10 MILLION EMAIL ENGAGEMENT
USER ACCOUNTS
1200+ variables across demographics,
credit and lifestyle data
3rd PARTY/BUREAU DATA
70+ variables across platform, screen
size & streaming rate
STREAMING EXPERIENCE
IMPROVED ACCESS TO
DATA IS TRANSFORMING
OUR BUSINESS 20+ variables across live
event/merchandise purchases
WWE RELATIONSHIPS
26Data Analytics: Case Study
LEVERAGE VIEWERSHIP
DATA TO DESIGN
TARGETED MARKETING
10 Million User Accounts
DATA TYPES VARIABLES
Network Consumption Favorite Star: AJ Styles
1,000+ Variables
Lifestyle/Payment 6 Payments - VISA
Ticket Purchases 4 Tickets @ $150 Average Price
Website Activity 100 Sessions @ 20 Minutes Each
Merchandise Buys 38 Items Purchased To-Date
27Data Analytics: Case Study
LEVERAGE EVENT
ATTENDANCE DATA TO
DESIGN TARGETED MARKETING
10 Million User Accounts
DATA TYPES VARIABLES
Network Consumption Favorite Star: AJ Styles
1,000+ Variables
Lifestyle/Payment 6 Payments - VISA
Ticket Purchases 4 Tickets @ $150 Average Price
Website Activity 100 Sessions @ 20 Minutes Each
Merchandise Buys 38 Items Purchased To-Date
28Data Analytics: Case Study
LEVERAGE MERCHANDISE
PURCHASE DATA TO DESIGN
TARGETED MARKETING
10 Million User Accounts
DATA TYPES VARIABLES
Network Consumption Favorite Star: AJ Styles
1,000+ Variables
Lifestyle/Payment 6 Payments - VISA
Ticket Purchases 4 Tickets @ $150 Average Price
Website Activity 100 Sessions @ 20 Minutes Each
Merchandise Buys 38 Items Purchased To-Date
29Data Analytics: Case Study
LEVERAGE MERCHANDISE
PURCHASE DATA TO DESIGN
TARGETED MARKETING
10 Million User Accounts
PROGRAM TYPE VARIABLES
In-ring
1,000+ Variables
Reality
Documentary
Animation
Short-Form
30Data Analytics: Case Study
LEVERAGE MERCHANDISE
PURCHASE DATA TO DESIGN
TARGETED MARKETING
10 Million User Accounts
NETWORK CONSUMPTION OF NXT
City Viewership
New York
1,000+ Variables
Los Angeles
Chicago
Philadelphia
Dallas
31TRANSFORMING TO A NEW
MEDIA GROWTH MODEL
Investment Rationale
1 One-of-a-kind Media Company
2 Executing Successful Transformation
3 Leveraging A Powerful Media Ecosystem
4 Multiple Growth Drivers
5 STRONG FINANCIAL OUTLOOK
THE NEW WWE
Delivering Sustained Growth
32TRANSFORMING TO A NEW BUSINESS MODEL RAISES WWE’S
EARNINGS PROFILE AND DELIVERS SUSTAINED GROWTH1
REVENUE OPERATING INCOME ADJUSTED OIBDA2,3
(In Millions) (In Millions) (In Millions)
$115 At least
$200
~$1,000
$179
$930 $76
Axis Title
$801 $56 $136
$729
Axis Title
Axis Title
$39
$659 $98
$76
2015 2016 2017 2018 2019E 2015201620172018
2015 2016 2017 2018 2015 2016 2017 2018 2019E
1 WWE provides guidance for 2019 Revenue and Adjusted OIBDA but not for Operating income
2 A definition of Adjusted OIBDA, which excludes stock-based compensation expense, can be found in the Company’s Q4 2018 earnings materials dated 02/07/19 and in the appendix of this presentation
3 The Company has targeted 2019 Revenues of approx. $1.0 billion and 2019 Adjusted OIBDA of “at least $200 million”
331 2
Diverse Revenues High Growth
By products and geography Revenue Streams
WWE Media
FINANCIAL
STRATEGY
TARGETS STRONG
BALANCE
LONG-TERM SHEET
GROWTH
& BUILDING
SHAREHOLDER VALUE: 4 3
STOCK REPURCHASE Select Investments High Margins1
PROGRAM 70-80%
%
1The Company’s variable margins have ranged between 70%-80% in each annual
period since 2006 34INVESTMENT PRIORITIES
GLOBAL
CONTENT DIGITIZATION
MARKETS
• Strength & Sustainability
• Fan Experience
• Supporting Growth
SIGNIFICANT CASH FLOW SUPPORTS CAPITAL DEPLOYMENT STRATEGY: MAINTAIN
STRONG BALANCE SHEET, INVEST IN GROWTH OPPORTUNITIES, AND RETURN OF EXCESS
CAPITAL TO SHAREHOLDERS VIA STOCK REPURCHASE PROGRAM
35Strong Financial Outlook for 2019
2019 EXPECTED ACHIEVEMENTS
RECORD REVENUE OF ~$1.0 BILLION
RECORD ADJUSTED OIBDA1 OF AT LEAST $200M
1FY 2019 Revenue and Adjusted OIBDA represent the Company’s business outlook for the full year ending 12/31/19. Source: WWE Q4 2018 earnings materials dated 02/07/19 (corporate.wwe.com/investors). A definition of Adjusted
OIBDA, which excludes stock-based compensation expense, and a reconciliation to Operating income can be found in the Company’s Q4 2018 earnings materials dated 02/07/19 and in the appendix of this presentation
36APPENDIX
RECONCILIATION OF NON-GAAP MEASURES
RECONCILIATION OF ADJUSTED OIBDA TO OPERATING INCOME
$mm Q1 2019 FY 2019 Q4 2018 FY 2018
Adjusted OIBDA1 $9 - $14 at least $200 $ 64.4 $ 178.9
Depreciation & amortization - - (6.0) (25.1)
Stock-based compensation - - (5.0) (39.3)
2
Film impairments - - - -
Asset impairments2 - - - -
2
Gain (loss) on operating assets - - - -
Restructuring charges2 - - - -
2
Other operating income items - - - -
Operating income (U.S. GAAP Basis) Not estimable Not estimable $ 53.4 $ 114.5
RECONCILIATION OF NET CASH TO FREE CASH FLOW
$mm Q4 2018 FY 2018
Net cash provided by operating activities $ 65.2 $ 186.7
Less cash used for capital expenditures:
Purchase of property and equipment and other assets (10.9) (32.3)
Free Cash Flow $ 54.3 $ 154.4
1 A definition of Adjusted OIBDA, which excludes stock-based compensation expense, can be found in the appendix to this presentation
2 Because of the nature of these items, WWE is unable to estimate the amounts of any adjustments for these items for periods after December 31, 2018 due to its inability to forecast if or when such items will occur
38NOTES: NON-GAAP MEASURES
▪ The definition of Adjusted OIBDA, the Reconciliation of Q4 2018 and FY 2018 Adjusted OIBDA to
Operating Income can be found in the Company’s Q4 2018 earnings materials dated February 7, 2019
▪ The Company defines Adjusted OIBDA as operating income excluding depreciation and amortization,
stock-based compensation expense, certain impairment charges and other non-recurring material
items that otherwise would impact the comparability of results between periods. Adjusted OIBDA
includes amortization expenses directly related to the Company's revenue generating activities,
including the amortization of feature film, television production and WWE Network programming
assets. The Company believes the presentation of Adjusted OIBDA is relevant and useful for investors
because it allows them to view the Company’s segment performance in the same manner as the
primary method used by management to evaluate segment performance and to make decisions
regarding the allocation of resources. Additionally, the Company believes that Adjusted OIBDA is a
primary measure used by media investors, analysts and peers for comparative purposes
▪ The Company defines Free Cash Flow as net cash provided by operating activities less cash used for
capital expenditures. WWE views net cash provided by operating activities as the most directly
comparable GAAP measure. Although it is not a recognized measure of liquidity under U.S. GAAP, Free
Cash Flow provides useful information regarding the amount of cash WWE’s continuing business
generates after capital expenditures and is available for reinvesting in the business, debt service, and
payment of dividends
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