WORLD WRESTLING FEDERATION ENTERTAINMENT INC, 424B1, 1999-10-19

WORLD WRESTLING FEDERATION ENTERTAINMENT INC
424B1, 1999-10-19
AMUSEMENT & RECREATION SERVICES

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<PAGE>

RULE NO. 424(b)(1)
REGISTRATION NO. 333-84327

PROSPECTUS

10,000,000 Shares
World Wrestling Federation Entertainment, Inc.

Class A Common Stock

[LOGO]

This is an initial public offering of 10,000,000 shares of the Class A common
stock of World Wrestling Federation Entertainment, Inc. We are selling all of
the shares of Class A common stock being offered by means of this prospectus.
Of the 10,000,000 shares being offered, the U.S. underwriters are initially
offering 8,000,000 shares in the United States and Canada, and the
international managers are initially offering 2,000,000 shares outside the
United States and Canada.

There is no public market for our Class A common stock at the present time.

Our Class A common stock has been approved for quotation on the Nasdaq
National Market under the symbol "WWFE."

See "Risk Factors" beginning on page 9 to read about risks that you should
consider before buying any shares of our Class A common stock.

Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved of these securities or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
<TABLE>
<CAPTION>
Per
Share Total
------ ------------
<S> <C> <C>
Public offering price...................................... $17.00 $170,000,000
Underwriting discounts and commissions..................... $ 1.19 $ 11,900,000
Proceeds, before expenses, to us........................... $15.81 $158,100,000
</TABLE>

The U.S. underwriters and the international managers have an option to
purchase up to an additional 1,500,000 shares of Class A common stock from us
at the initial public offering price less the underwriting discount.

Bear, Stearns & Co. Inc.
Credit Suisse First Boston
Merrill Lynch & Co.
Wit Capital Corporation

The date of this prospectus is October 18, 1999.
<PAGE>

Prospective investors may rely only on the information contained in this
prospectus. Neither we nor any United States underwriter has authorized anyone
to provide prospective investors with different or additional information. This
prospectus is not an offer to sell nor is it seeking an offer to buy these
securities in any jurisdiction where such offer or sale is not permitted. The
information contained in this prospectus is correct only as of the date of this
prospectus, regardless of the time of the delivery of this prospectus or any
sale of these securities.

----------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary.................. 1
Risk Factors........................ 9
Conventions Which Apply In This
Prospectus......................... 14
Use of Proceeds..................... 15
Dividend Policy..................... 15
Reclassification of Stock and Prior
Subchapter S Corporation Status.... 16
Capitalization...................... 17
Selected Historical Combined
Financial and Other Data........... 18
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 21
</TABLE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Business........................... 31
Management......................... 45
Certain Relationships and Related
Transactions...................... 52
Principal Stockholders............. 53
Description of Capital Stock....... 54
Shares Eligible for Future Sale.... 56
United States Federal Tax
Considerations to Non-United
States Holders.................... 57
Plan of Distribution............... 60
Legal Matters...................... 64
Experts............................ 64
Where You Can Find More
Information....................... 64
Index to Financial Statements...... F-1
</TABLE>

----------------

Until November 12, 1999 (25 days after the date of this prospectus), all
dealers that buy, sell or trade shares of our Class A common stock, whether or
not participating in the offering, may be required to deliver a prospectus.
This is in addition to each dealer's obligation to deliver a prospectus when
acting as an underwriter and with respect to its unsold allotments or
subscriptions.
<PAGE>

PROSPECTUS SUMMARY

This summary highlights certain information found in greater detail elsewhere
in this prospectus. In addition to this summary, we urge you to read the entire
prospectus carefully, especially the risks of investing in our Class A common
stock discussed under "Risk Factors" before you decide whether to buy our Class
A common stock.

World Wrestling Federation Entertainment, Inc.

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 we have developed the World Wrestling Federation into one of the
most popular forms of entertainment today. We aggressively promote and market
our brand, our programming, our events and our products in numerous ways,
including:

. Holding approximately 200 live events each year in major stadiums and
arenas throughout the world, including Madison Square Garden in New
York City, Arrowhead Pond of Anaheim, California, Skydome in Toronto,
Canada and the Manchester Evening News Arena in Manchester, England;

. Producing nine hours of original television programming, 52 weeks per
year;

. Producing 12 domestic pay-per-view events each year;

. Distributing our programs and pay-per-view events in over 150
countries in nine languages;

. Marketing and selling our branded merchandise directly to consumers
and to major retailers worldwide;

. Licensing our brand to approximately 85 companies to produce and
distribute thousands of retail products worldwide;

. Publishing two monthly magazines with a combined annual circulation
of approximately 5.8 million; and

. Distributing news and information about our story lines, performers
and programming and effecting e-commerce sales and advertising
through our Internet sites.

We believe that our success results from our ability to offer consumers an
affordable and exciting entertainment experience. Central to the development of
this entertainment experience are our creative and compelling story lines and
our roster of approximately 110 talented performers. Each week we advance our
story lines, develop our characters and create the drama and excitement that
drive our business and attract customers to the World Wrestling Federation. Our
success is evidenced by the following:

. Our flagship television program, Raw is War, was the number one rated
regularly scheduled cable television program, according to the
Nielsen ratings, for 19 consecutive weeks through June 30, 1999;

. Raw is War earned 26 of the top 30 hourly rankings on the Nielsen
list of most watched shows on all basic cable networks for the second
quarter of 1999, achieving an average weekly Nielsen rating of 6.2
for the six months ended June 30, 1999;

. Through the success of our programming, we have attracted over 50
major advertisers and sponsors, such as AT&T, Castrol, Coca Cola,
Hasbro, M&M/Mars, Sony Playstation, and four branches of the United
States armed forces;

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<PAGE>

. In fiscal 1999, approximately 5.4 million households purchased our
pay-per-view programs, generating retail revenues of approximately
$150 million;

. In March 1999, Wrestlemania, our premier annual pay-per-view event,
generated approximately 800,000 pay-per-view buys, making it one of
the highest subscribed non-boxing pay-per-view events ever;

. Estimated retail revenues from sales of our branded merchandise
through licensees were approximately $400 million in fiscal 1999;

. According to Billboard Magazine, seven of our home videos ranked
among the top 10 best selling home videos in the "Sports" category as
of August 28, 1999;

. Our most recent music compilation, World Wrestling Federation--The
Music Volume III, achieved platinum status and reached number 10 on
the Billboard 200, selling approximately 1.4 million units as of June
30, 1999; and

. During June 1999, our main web site, wwf.com, generated approximately
100 million page views, and, according to Media Metrix, an Internet
measurement company, had approximately 1,581,000 visitors. As a
result, 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.

Our revenues have grown to $251.5 million in fiscal 1999 from $81.9 million
in fiscal 1997. During this same period, EBITDA increased to $59.3 million in
fiscal 1999 from a loss of $5.0 million in fiscal 1997. Our net income, as a
Subchapter S corporation, increased to $56.0 million in fiscal 1999 from a net
loss of $6.5 million in fiscal 1997.

Our Operations

Our operations are organized around two principal activities:

. the creation, marketing and distribution of our live and televised
entertainment, which includes the sale of advertising time on our
television programs; and

. the marketing and promotion of our branded merchandise.

Live and Televised Entertainment

Live Events

In fiscal 1999, we held approximately 200 live events in approximately 100
cities in North America, including 18 of the 20 largest metropolitan areas in
the United States. Attendance at our live events has increased approximately
109% over the last three years, from approximately 1.1 million people in fiscal
1997 to approximately 2.3 million people in fiscal 1999. Our live events
provide the content for our television and pay-per-view programming.

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 weekly
television shows, including our two-hour flagship show, Raw is War, are carried
by the USA Network. We have enjoyed a 17-year relationship with the USA
Network, which reaches approximately 75 million households in the United
States. Two of our other shows are syndicated and are carried by

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approximately 120 stations nationwide. Our newest show, WWF SmackDown!, a two-
hour program, has aired since August 1999 on the United Paramount Network,
which can be seen in approximately 82 million households in the United States.
Our brand of entertainment appeals to a wide demographic audience, and although
it is principally directed to audiences aged 18 to 34, it has become most
popular with males aged 18 to 34 and teenagers aged 12 to 17.

Pay-Per-View Programming

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 had increased our pay-per-view offerings to 12 per year. Our events
consistently rank among the pay-per-view programs achieving the highest number
of buys.

Branded Merchandise

Licensing and Direct Sales

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 our merchandise worldwide
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.

We currently maintain licensing agreements with approximately 85 licensees
worldwide, and our logo and images of our characters appear on thousands of
retail products, including various types of apparel, toys and video games, and
a wide assortment of other items. We retain creative approval over all licensed
products.

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. In 1998, we
began to produce and market home videos in-house using this library. Our home
videos are distributed nationwide by third parties to major retailers, such as
Blockbuster Video, Wal-Mart and Target.

Music

Music is an integral part of the entertainment experience at our live events
and in our television programs. We compose and record theme songs for our
performers in our recording studio. A third party manufactures and distributes
CDs of our music to retailers nationwide, such as Tower Records, Best Buy,
Target and Circuit City.

Publishing

Our publishing operations consist primarily of two monthly magazines, WWF
Magazine and RAW Magazine, which are used to help shape and complement our
story lines. We also include our direct marketing catalog in our magazines on a
quarterly basis. We prepare all of the editorial content in-house and use
outside contractors for printing and distribution.

New Media

We utilize the Internet to communicate with our fans and market and
distribute our various products. Through our network of Internet sites, our
fans can obtain our latest news and information, stay abreast of our evolving
story lines, tap into interactive chat rooms to communicate with each other and
our performers,

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purchase our webcast pay-per-view events, and purchase our branded merchandise.
Our main site, wwf.com, is currently one of the Internet's most popular and
most visited sites. 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.

Our Business Strategy

Some of the key elements of our strategy are to:

. Expand our television and pay-per-view distribution relationships;

. Increase the licensing and direct sale of our branded products;

. Grow our Internet operations;

. Form strategic relationships with other media and entertainment
companies;

. Create new forms of entertainment and brands that complement our
existing businesses; and

. Develop branded location-based entertainment businesses directly or
through licensing agreements, joint ventures or other arrangements.

We cannot assure you that we will be able to achieve our business objectives,
which will depend, in large part, on the continued popularity of our brand of
sports entertainment and our success in expanding into new or complementary
businesses in the face of a variety of risks as summarized under "Risk
Factors."

Our Address

The address of our principal executive offices is P.O. Box 3857, 1241 East
Main Street, Stamford, Connecticut 06902, and our telephone number is (203)
352-8600. We are located on the Internet at wwf.com. None of the information on
any of our websites is part of this prospectus.

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<PAGE>

The Offering

<TABLE>
<C> <S>
Class A common stock offered............... 10,000,000 shares(1)

Common stock to be outstanding 10,000,000 shares of Class A
after the offering........................ common stock(1)(2)

56,667,000 shares of Class B
common stock(3)

Use of proceeds............................ We intend to use the net proceeds
of approximately $155.6 million
from the offering for working
capital and other general
corporate purposes. See "Use of
Proceeds."

Voting rights.............................. The holders of Class A common
stock have voting rights
identical to holders of Class B
common stock, except that holders
of Class A common stock are
entitled to one vote per share
and holders of Class B common
stock are entitled to ten votes
per share.
</TABLE>
- --------
(1) Excludes up to 1,500,000 shares to be sold by us if the underwriters
exercise their over-allotment option in full, as described under "Plan of
Distribution."

(2) Excludes:

. 5,398,500 shares of Class A common stock that will be issuable upon
the exercise of stock options granted under our long-term incentive
plan at the time of the offering. Of those options, options to
purchase 630,450 shares of Class A common stock will become
exercisable on April 17, 2000; and options to purchase 1,397,038
additional shares of Class A common stock will become exercisable on
October 17, 2000.

. 4,601,550 additional shares of Class A common stock reserved for
issuance under our long-term incentive plan. You should read the
discussion under "Management--Long-Term Incentive Plan" for
additional information concerning our long-term incentive plan.

After the offering, 1.7% of the voting power of our outstanding common
stock will be held by the holders of the Class A common stock.

(3) The Class B common stock is fully convertible into Class A common stock, on
a one-for-one basis, at any time at the option of the holder or upon the
transfer of the Class B common stock to any person or entity not affiliated
with Vincent McMahon, Linda McMahon or their family. See "Description of
Capital Stock." After the offering, 98.3% of the voting power of our
outstanding common stock will be held by the holders of the Class B common
stock.

5
<PAGE>

Summary Historical Combined Financial And Other Data

The following table sets forth our summary historical combined financial data
for each of the three fiscal years in the period ended April 30, 1999 and for
the three months ended July 31, 1998 and July 30, 1999 and as of July 30, 1999
and summary unaudited pro forma financial data for the fiscal year ended April
30, 1999 and as of and for the three months ended July 30, 1999. The summary
historical combined financial data for the three years ended April 30, 1999
have been derived from our audited combined financial statements included
elsewhere in this prospectus. The summary historical combined financial data
for the three months ended July 31, 1998 and July 30, 1999 and as of July 30,
1999 have been derived from our unaudited combined financial statements, which
in the opinion of management include all adjustments, consisting of normal
recurring adjustments, that are necessary to present fairly our results of
operations and financial position for the periods and the date presented. The
results of operations for the three months ended July 30, 1999 are not
necessarily indicative of the results to be expected for the full year. You
should read the summary historical combined financial data in conjunction with
our historical combined financial statements, the related notes and the
information set forth under "Selected Historical Combined Financial and Other
Data," and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained elsewhere in this prospectus.

The unaudited pro forma combined balance sheet and statement of operations
data included in the table are based upon information in our combined balance
sheet as of July 30, 1999 and our combined statement of operations for fiscal
1999 and the three months ended July 30, 1999, which appear elsewhere in this
prospectus, after giving effect to the pro forma adjustments described in the
notes to the table. Such adjustments have been made assuming the transactions
reflected in the pro forma combined financial data took place on July 30, 1999
for balance sheet purposes and May 1, 1998 for statement of operations
purposes. The unaudited pro forma combined financial data are provided for
informational purposes only and do not purport to be indicative of the results
of operations and financial position that would have been obtained or that may
be expected to occur in the future.

We elected, beginning with our fiscal year ended April 30, 1988, to be
subject to the provisions of Subchapter S of the Internal Revenue Code.
Accordingly, since that time, our taxable income or loss has been included in
the federal and certain state income tax returns of our stockholder. The
provision for income taxes reflected in our historical combined financial
statements since fiscal 1988 relates only to foreign and certain state income
taxes for those states that do not recognize Subchapter S corporations. Our
stockholder is 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. Prior to or concurrent with the
issuance of shares in the offering, we will terminate our election to be
subject to the provisions of Subchapter S and will become subject to the
provisions of Subchapter C of the Internal Revenue Code. As a Subchapter C
corporation, we will be fully subject to federal, state and foreign income
taxes.

EBITDA represents income from operations plus depreciation and amortization.
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.

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<TABLE>
<CAPTION>
Fiscal Year Ended April 30, Three Months Ended
------------------------------ ---------------------------
1997 1998 1999 July 31, 1998 July 30, 1999
--------- --------- --------- ------------- -------------
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Combined Statement of
Operations Data:
Net revenues............ $ 81,863 $ 126,231 $ 251,474 $39,042 $ 76,222
Cost of revenues........ 60,958 87,969 146,618 25,031 41,045
Selling, general and
administrative
expenses............... 25,862 26,117 45,559 8,305 13,970
Depreciation and
amortization........... 1,729 1,676 1,946 418 659
Interest expense........ 782 2,019 1,125 245 409
Other income, net....... 777 479 1,747 193 851
-------- --------- --------- ------- --------
Income (loss) before
income taxes........... (6,691) 8,929 57,973 5,236 20,990
Provision (benefit) for
income taxes........... (186) 463 1,943 175 714
-------- --------- --------- ------- --------
Net income (loss)....... $ (6,505) $ 8,466 $ 56,030 $ 5,061 $ 20,276
======== ========= ========= ======= ========
Unaudited Pro Forma
Combined Statement of
Operations Data:
Historical income before
income taxes........... $ 57,973 $ 20,990
Pro forma adjustment
other than income
taxes.................. 2,515(1) 427(1)
--------- --------
Pro forma income before
income taxes........... 55,458 20,563
Pro forma provision for
income taxes........... 22,227(2) 8,064(2)
--------- --------
Pro forma net income.... $ 33,231 $ 12,499
========= ========
Pro forma earnings per
common share (basic and
diluted)............... $ 0.59(3) $ 0.22(3)
========= ========
Combined Statement of
Cash Flows Data:
Net cash provided by
(used in) operating
activities............. $ 3,628 $ 6,256 $ 57,646 $ 3,002 $ 17,615
Net cash provided by
(used in) investing
activities............. (849) (1,294) (14,634)(4) (907) (1,717)
Net cash provided by
(used in) financing
activities............. (1,803) 1,974 (6,082) (706) (27,315)(5)

</TABLE>

<TABLE>
<CAPTION>
As of July 30,
-------------------------
Pro forma, as
1999 adjusted 1999
-------- -------------
<S> <C> <C> <C> <C>
Combined Balance Sheet Data:
Cash and cash equivalents................... $ 34,310(5) $189,910(6)
Property and equipment-net.................. 29,435 29,435
Total assets................................ 117,514 273,114(6)
Total long-term debt (including current
portion)................................... 12,538 12,538
Note payable to stockholder................. 32,000(7) 32,000(7)
Total stockholder's equity.................. 33,453 189,053(6)
</TABLE>

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<TABLE>
<CAPTION>
Fiscal Year Ended April 30, Three Months Ended
--------------------------------- ---------------------------
1997 1998 1999 July 31, 1998 July 30, 1999
---------- ---------- ---------- ------------- -------------
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Other Financial Data:
EBITDA (8).............. $ (4,957) $ 12,145 $ 59,297 $ 5,706 $ 21,207
Capital expenditures.... 892 1,294 3,756 907 1,717
Other Non-Financial
Data:
Number of live events... 199 218 199 51 51
Total attendance........ 1,060,740 1,576,112 2,273,701 489,946 620,258
Average weekly Nielsen
rating of Raw is War... 2.4 3.1 5.0 4.7 6.6
Pay-per-view buys....... 2,252,200 2,936,100 5,365,100 930,600 1,183,500
</TABLE>
- --------
(1) This amount gives pro forma effect to the increase in compensation to
Vincent and Linda McMahon pursuant to employment agreements that will
become effective prior to the closing of the offering. See "Management."
Historically, both executives were paid less compensation because they
benefited from Subchapter S corporation distributions to Mr. McMahon. Since
July 1, 1999, Mr. and Mrs. McMahon have been paid on a basis consistent
with the terms of their respective employment agreements.
(2) 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 during fiscal 1999 and for the three
months ended July 30, 1999. Prior to or concurrent with the issuance of
shares in the offering, we will terminate our status as a Subchapter S
corporation. See "Reclassification of Stock and Prior Subchapter S
Corporation Status."
(3) Based on a weighted average number of common shares outstanding of
56,667,000 for the fiscal year ended April 30, 1999 and the three month
period ended July 30, 1999.
(4) 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 particular property is no longer consistent
with our business objectives, and we intend to sell this property during
fiscal 2000.
(5) Reflects the distribution of $25.5 million to our stockholder, Mr. McMahon,
on June 29, 1999 representing a portion of previously earned and
undistributed earnings, which has been fully taxed at the stockholder
level. As of July 30, 1999, approximately $19.1 million of undistributed
earnings was retained in our company.
(6) Reflects our receipt of the net proceeds from the offering of approximately
$155.6 million, after deducting the underwriting discount and offering
expenses.
(7) Reflects the accrual of tax distributions in the amount of $32.0 million
relating to estimated federal and state income taxes payable by our
stockholder with respect to our earnings in fiscal 1999 and the period from
May 1, 1999 through September 30, 1999. Accordingly, on June 29, 1999, we
made a Subchapter S corporation distribution to our stockholder in the form
of an unsecured, 5% interest-bearing note in the principal amount of $32.0
million due April 10, 2000, the principal of which will be paid
periodically as estimated income tax payments become due. Our actual
earnings through the date of the offering could exceed those used in the
calculation of the estimated federal and state income taxes payable by our
stockholder thus requiring additional distributions in the form of cash or
notes to our stockholder.
(8) EBITDA is defined by us as net income (loss), plus provision for income
taxes, depreciation and amortization and interest expense less benefit for
income taxes and other income, net.

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RISK FACTORS

You should carefully consider the following factors and other information
contained in this prospectus in evaluating our business before deciding whether
to invest in shares of our Class A common stock.

The 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.

The creation, marketing and distribution of our live and televised
entertainment, including our pay-per-view events, is the core of our business
and is critical to our ability to generate revenues. A failure to continue to
create popular live events and televised programming would likely lead to a
decline in our television ratings and attendance at our live events. Such
decline would adversely affect our ability to generate revenues.

The 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.

Our success depends, in large part, upon our ability to recruit, train and
retain athletic performers who have the physical presence, acting ability and
charisma to portray characters in our live events and televised programming. We
cannot assure you that we will be able to continue to identify, train, and
retain such performers in the future. Additionally, we cannot assure you that
we will be able to retain our current performers when their contracts expire.
Our failure to attract and retain key performers, or a serious or untimely
injury to, or the death of, any of our key performers, would likely lead to a
decline in the appeal of our story lines, and the popularity of our brand of
entertainment, which would adversely affect our ability to generate revenues.

The loss of the creative services of Vincent McMahon could adversely affect our
ability to create popular characters and creative story lines.

For the foreseeable future, we will heavily depend on the vision and services
of Vincent McMahon. In addition to serving as chairman of our board of
directors, Mr. McMahon leads the creative team that develops the story lines
and the characters for our televised programming and our live events. Mr.
McMahon is also an important member of the cast of performers. The loss of Mr.
McMahon due to retirement, disability or death could have a material adverse
effect on our ability to create popular characters and creative story lines. We
do not carry key man life insurance on Mr. McMahon.

The failure to maintain or renew key agreements could adversely affect our
ability to distribute our television and pay-per-view programming.

Of the weekly television programming we currently produce, five of the nine
hours are seen on the USA Network and two of the nine hours are seen on the
United Paramount Network. An agreement that we have with the USA Network with
respect to one hour of programming expires in September 2000. The other
agreement with that network, which covers the other four hours of programming,
expires in September 2001, but may be terminated by either party in September
2000. The agreement that we have with the United Paramount Network expires in
September 2000. If we cannot agree on the terms of new contracts with the USA
Network or the United Paramount Network, we may have to enter into agreements
to carry our programs with other television networks, which may not be
available in as many households as the USA Network or the United Paramount
Network. In addition, any such agreements may not be as advantageous to us as
our present agreements. We cannot assure you that we will be able to negotiate
new agreements with the USA Network, the United Paramount Network or another
network with terms as favorable as those in our current agreements.

In addition, we have a contract expiring in 2004 with Viewer's Choice, the
leading distributor of pay-per-view programming in the United States to
continue to provide services to us. As our revenues are generated, directly and
indirectly, from the distribution of our televised programming, any failure to
maintain or renew

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<PAGE>

these arrangements with the distributors of our programs or the failure of such
distributors to continue to provide services to us could have a material
adverse effect on our operating results, financial condition and prospects.

The entertainment market in which we operate is highly competitive, and we may
not be able to compete effectively, especially against competitors with greater
financial resources or marketplace presence.

In our sports entertainment market, we compete on a national basis primarily
with World Championship Wrestling, Inc., a Time Warner company. 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.
Other sources of competition in our sports entertainment market are regional
promoters of wrestling events.

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

This competition could result in a significant loss of viewers, venues,
distribution channels or performers and fewer entertainment and advertising
dollars spent on our form of sports entertainment, any of which could have a
material adverse effect on our operating results, financial condition and
prospects.

Because we depend upon our intellectual property rights, our inability to
protect those rights could negatively impact our ability to compete in the
sports entertainment market.

Our inability to protect our large portfolio of trademarks, service marks,
copyrighted material and characters, trade names and other intellectual
property rights could negatively impact our ability to compete.

Other parties may infringe on our intellectual property rights and may
thereby dilute our brand in the marketplace. Any such infringement of our
intellectual property rights would also likely result in our commitment of time
and resources to protect these rights. We have engaged, and continue to engage,
in litigation with parties that claim or misuse some of our intellectual
property. We are involved in significant pending lawsuits relating primarily to
the ownership of copyrights of some of the characters featured in our live and
televised events and our home videos. Similarly, we may infringe on others'
intellectual property rights. One or more adverse judgments with respect to
these intellectual property rights could negatively impact our ability to
compete.

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, 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. From
time to time, disagreements have arisen under that agreement concerning its
scope and the limitations on our use of those initials, including use on our
Internet sites, as well as the use of our stylized logo. We have recently
received a notice of alleged violations of the agreement from the other party.
We have 60 days under the agreement to cure any actual violation, and we are
currently reviewing the allegations. Any determination further limiting our use
of those initials or our logo could have a material adverse effect on our brand
recognition and our ability to compete.

A decline in general economic conditions or in the popularity of our brand of
sports entertainment could adversely impact our business.

Our operations are affected by general economic conditions and consumer
tastes, and therefore our future success is unpredictable. The demand for
entertainment and leisure activities tends to be highly sensitive to

10
<PAGE>

consumers' disposable incomes, and thus a decline in general economic
conditions could result in our fans or potential fans having less discretionary
income to spend on our live and televised entertainment and branded
merchandise, which could have an adverse effect on our business or prospects.

The growing popularity of our brand of sports entertainment has increasingly
attracted more fans, resulting in greater shares of television audiences,
increased sales of advertising time on our television programs, and increased
sales of our branded merchandise. The continued popularity of our brand of
entertainment is important to our results of operations and the long-term value
of our brand. Public tastes are unpredictable and subject to change and may be
affected by changes in the country's political and social climate. A change in
public tastes or a decline in general economic conditions may adversely affect
our future success.

Our insurance may not be adequate to cover liabilities resulting from accidents
or injuries.

We hold approximately 200 live events each year primarily in the United
States and Canada. This schedule exposes our performers and our employees who
are involved in the production of those events to the risk of travel and
performance-related accidents, the consequences of which may not be fully
covered by insurance. The physical nature of our events exposes our performers
to the risk of serious injury or death. Although we have general liability
insurance and umbrella insurance policies, and although our performers are
responsible for obtaining their own health, disability and life insurance, we
cannot assure you that the consequences of any accident or injury will be fully
covered by insurance. Our liability resulting from any accident or injury not
covered by our insurance could have a material adverse effect on operating
results, financial condition and prospects.

We may be prohibited from promoting and conducting our live events if we do not
comply with applicable regulations.

In various states in the United States and some Canadian provinces, athletic
commissions and other applicable regulatory agencies require us to obtain
promoters licenses, performers licenses, medical licenses and/or event permits
in order for us to promote and conduct our live events. In the event that we
fail to comply with the regulations of a particular jurisdiction, we may be
prohibited from promoting and conducting our live events in that jurisdiction.
The inability to present our live events over an extended period of time or in
a number of jurisdictions would lead to a decline in the various revenue
streams generated from our live events, which could have an adverse effect on
our business or prospects.

We could incur substantial liabilities if pending material litigation is
resolved unfavorably.

We are currently a party to civil litigation which, if concluded adversely to
our interests, could have a material adverse effect on our operating results
and financial condition. These material legal proceedings are more fully
described elsewhere in this prospectus. These include a suit by members of the
family of Owen Hart, a professional wrestler performing under contract with us,
filed on June 15, 1999 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,
alleging negligence and other claims in connection with the death of Owen Hart
during a pay-per-view event at Kemper Arena in Kansas City, Missouri on May 23,
1999. Plaintiffs seek compensatory and punitive damages in unspecified amounts.
In other pending litigation, three former professional wrestlers who had been
performers for us have filed separate suits against us relating primarily to
the ownership of copyrights of some of the characters previously featured in
our live and televised events. Plaintiffs in these suits seek compensatory and
punitive damages.

We will face a variety of risks if we expand into new or complementary
businesses in the future.

Over the last 20 years, our core operations have consisted of marketing,
promoting and distributing our live and televised entertainment and our branded
merchandise. Our current strategic objectives include not only further
developing and enhancing our existing business but also entering into new or
complementary

11
<PAGE>

businesses, such as the creation of new forms of entertainment and brands, the
development of new television programming and the development of branded
location-based entertainment businesses. The following risks are associated
with expanding into new or complementary businesses by acquisition, strategic
alliance, investment, licensing or other arrangements:

. potential diversion of management's attention and resources from our
existing business and an inability to recruit or develop the
necessary management resources to manage new businesses;

. unanticipated liabilities or contingencies from new or complementary
businesses or ventures;

. reduced earnings due to increased goodwill amortization, increased
interest costs and additional costs related to the integration of
acquisitions;

. potential reallocations of resources due to the growing complexity
of our business and strategy;

. competition from companies then engaged in the new or complementary
businesses that we are entering;

. possible additional regulatory requirements and compliance costs;

. dilution of our stockholders' percentage ownership and/or an
increase of our leverage when issuing equity or convertible debt
securities or incurring debt; and

. potential unavailability on acceptable terms, or at all, of
additional financing necessary for expansion.

Our management has broad discretion over the use of proceeds from the offering,
and therefore investors will not have the opportunity to evaluate information
concerning the application of proceeds.

The net proceeds of the offering will be approximately $155.6 million after
deducting the underwriting discount and offering expenses. Management will
retain broad discretion as to the use and allocation of those net proceeds.
Accordingly, our investors will not have the opportunity to evaluate the
economic, financial and other relevant information that we may consider in the
application of the net proceeds.

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 may conflict with the holders of our
Class A common stock.

We have two classes of common stock-- Class A, which carries one vote per
share, and Class B, which carries ten votes per share. After the offering, a
substantial majority of the issued and outstanding shares of Class B common
stock will be owned by Vincent McMahon directly or as the trustee of a trust
for the benefit of his children. As a result, Mr. McMahon will control
approximately 97.3% of the voting power of the issued and outstanding shares of
our common stock, or approximately 97.0% if the underwriters' over-allotment
option is exercised in full. Accordingly, he will be able to control the
outcome of substantially all actions requiring stockholder approval, including
the election of our directors, the adoption of amendments to our certificate of
incorporation and approval of mergers or sales of substantially all of our
assets. The interests of Mr. McMahon may conflict with the interests of the
holders of our Class A common stock. In addition, the voting power of Mr.
McMahon through his ownership of our Class B common stock could discourage
others from initiating potential mergers, takeovers or other change of control
transactions. As a result, the market price of our Class A common stock could
decline.

A substantial number of shares will be eligible for future sale by our current
stockholder, and the sale of those shares could lower our stock price.

We cannot predict the effect, if any, that future sales of shares of our
Class A common stock or the availability of those shares for future sale will
have on the market price of our Class A common stock. Sales of substantial
amounts of our Class A common stock, or the perception that such sales could
occur, may lower the

12
<PAGE>

prevailing market price of our Class A common stock. These factors could also
make it more difficult for us to raise funds through future offerings of our
Class A common stock.

Upon completion of the offering, our current stockholder will own
approximately 84.2% of the outstanding shares of our common stock, or 82.3% if
the underwriters' over-allotment option is exercised in full. We, our
directors, our executive officers, some of our other officers and our
stockholder have agreed not to sell, otherwise dispose of, or announce our or
their intention to do so, with respect to any shares of Class A common stock,
or any securities convertible into or exercisable or exchangeable for any
shares of Class A common stock, for a period of 180 days after the date of this
prospectus without the prior written consent of Bear, Stearns & Co. Inc. After
the expiration of a 180-day "lock-up" period, these parties will be entitled to
dispose of a portion of their shares upon compliance with applicable securities
laws.

There has been no prior market for our Class A common stock, and the market
price of the shares will fluctuate.

We cannot be sure that an active public market for our Class A common stock
will develop or continue after the offering. Prices for our Class A common
stock will be determined in the marketplace and may be influenced by many
factors, including variations in our financial results, changes in earnings
estimates by industry research analysts, investors' perceptions of us and
general economic, industry and market conditions. The initial public offering
price per share of our Class A common stock has been determined by negotiations
among us and the representatives of the underwriters. Investors may not be able
to sell their Class A common stock at or above the initial public offering
price. We believe there are relatively few comparable companies that have
publicly traded equity securities. This may also affect the trading price of
our Class A common stock after the offering and make it more difficult for you
to evaluate the value of our Class A common stock. The market price of our
Class A common stock is likely to be highly volatile and could be subject to
wide fluctuations in response to, among other things, the following factors:

. trends in television viewership and changes in audience tastes;

. changes in the popularity of our brand of sports entertainment;

. our operating performance and the performance of similar companies;

. news announcements or other developments relating to us, our
principal competitor or our industry;

. changes in earnings estimates or recommendations by research
analysts;

. changes in general economic conditions; and

. the significant price and volume volatility in the stock markets
that has occurred in recent years and may continue to occur and that
is often unrelated to the operating performance of specific
companies.

Our operations may suffer temporary disruptions from Year 2000 computer
problems resulting in increased expenses, decreased revenues or reduced
earnings.

Year 2000 issues exist when computers record years using two digits rather
than four and then use those years for arithmetic operations, comparisons or
sorting. A two-digit recording program may recognize a date using "00" as 1900
rather than 2000, which could cause the computer system relying on that program
to perform inaccurate computations or fail to operate. While we believe that
prior to January 1, 2000 we will have addressed any Year 2000 issues affecting
our internal systems, if the steps that we have taken and propose to take are
not adequate, or if our significant business partners, vendors or customers do
not take appropriate steps, then Year 2000 problems could temporarily have a
material adverse effect on our ability to conduct our business in the ordinary
course. For example, disruptions in cable television systems would seriously
hinder our ability to distribute our television and pay-per-view programs until
alternative distribution arrangements could be made.

13
<PAGE>

This prospectus contains forward-looking information, which may not prove
accurate.

This prospectus contains forward-looking statements regarding our business.
When used in this prospectus, the words "anticipates," "plans," "believes,"
"estimates," "intends," "expects" and "projects" typically identify forward-
looking statements, although not all forward-looking statements contain such
words. Such statements, including, but not limited to, our statements regarding
our business and operating strategies and liquidity and capital resources, are
based on management's beliefs, as well as on assumptions made by, and
information currently available to, management, and involve risks and
uncertainties, certain of which are beyond our control. Our actual results
could differ materially from those expressed in any forward-looking statement
made by us or on our behalf. In light of these risks and uncertainties, we
cannot assure you that any forward-looking information in this prospectus will
prove to be accurate.

CONVENTIONS WHICH APPLY IN THIS PROSPECTUS

References in this prospectus to "the company," "we," "our" and "us" refer to
World Wrestling Federation Entertainment, Inc. and our subsidiaries, after
giving effect to the contribution of two of our affiliated companies to us by
our stockholder prior to the offering. Unless we indicate otherwise, all
information in this prospectus reflects the following:

.a 566,670-for-one stock split effected on October 15, 1999;

. no exercise by the underwriters of their over-allotment option to
purchase up to 1,500,000 additional shares of Class A common stock;

. the reclassification of our common stock prior to the closing of the
offering;

. the termination of our Subchapter S corporation election under the
Internal Revenue Code prior to or concurrent with the closing of the
offering; and

. all references to a fiscal year refer to a year beginning on May 1 of
a calendar year and ending on April 30 of the next calendar year; for
example, fiscal 1999 refers to the year from May 1, 1998 to April 30,
1999.

World Wrestling Federation and the World Wrestling Federation logo are two of
our marks. This prospectus also contains trademarks and trade names of other
companies. All trademarks and trade names appearing in this prospectus are the
property of their respective holders.

14
<PAGE>

USE OF PROCEEDS

The net proceeds to us from the sale of the shares being offered will be
approximately $155.6 million, after deducting the underwriting discount and
offering expenses. If the underwriters exercise their over-allotment option in
full, then we estimate that the net proceeds to us from the sale of the shares
being offered will be approximately $179.3 million.

The principal purposes of this offering are to increase our working capital,
create a public market for our common stock and facilitate our future access to
the public capital markets. We intend to use the net proceeds from the offering
to provide additional funds for our operations and for general corporate
purposes. Except for upgrading our television and post-production facility at
an estimated cost of $12.0 million, we cannot specify with certainty the
particular uses for the net proceeds to be received upon completion of this
offering. Accordingly, our management will have broad discretion in applying
the net proceeds. Pending any such use, we intend to invest the net proceeds in
interest-bearing instruments. See "Risk Factors--Our management had broad
discretion over the use of proceeds from the offering, and therefore investors
will not have the opportunity to evaluate information concerning the
application of proceeds."

DIVIDEND POLICY

We plan to retain all of our earnings, if any, 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. Our future 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. Prior to the offering, as a
Subchapter S corporation, we made distributions to our stockholder for federal
and state income tax and other purposes, subject to limitations in our credit
agreement.

15
<PAGE>

RECLASSIFICATION OF STOCK AND PRIOR SUBCHAPTER S CORPORATION STATUS

On or prior to the closing of the offering, we will amend and restate our
certificate of incorporation in the state of Delaware. Pursuant to the
certificate of incorporation, as amended and restated, we will be authorized to
issue up to 240,000,000 shares of $.01 par value common stock, of which
180,000,000 shares will be classified as Class A common stock and 60,000,000
shares as Class B common stock. Upon the filing of our amended and restated
certificate of incorporation, each outstanding share of our common stock will
automatically be reclassified and converted into 566,670 shares of Class B
common stock. The Class A and Class B common stock will be identical in all
respects, except that the Class A common stock will be entitled to one vote for
each share and the Class B common stock will be entitled to ten votes for each
share. The Class B common stock is fully convertible into Class A common stock,
on a one-for-one basis, at any time at the option of the holder or upon the
transfer of the Class B common stock to any person or entity not affiliated
with Vincent McMahon, Linda McMahon or their family. Mr. McMahon and the trust
that he created for the benefit of his children hold our common stock and, upon
the reclassification, will hold Class B common stock.

We have been subject to taxation under Subchapter S of the Internal Revenue
Code of 1986, as amended, since fiscal 1988. As a result, we currently pay no
federal income tax and pay only foreign and certain state income taxes. Our
earnings are subject to federal and, generally, state income taxation directly
at the stockholder level. As a Subchapter S corporation, we have made periodic
distributions to our stockholder for the payment of such taxes without the
imposition of a second tax on us.

On June 29, 1999, we made a Subchapter S corporation distribution to Mr.
McMahon in the form of an unsecured, 5% interest-bearing note in the principal
amount of $32.0 million due April 10, 2000. The note can be prepaid at any time
in whole or in part. We intend to prepay the principal of the note periodically
as estimated income tax payments become due. The note represents estimated
federal and state income taxes payable by our stockholder with respect to our
income for fiscal 1999 and for the interim period from May 1, 1999 through
September 30, 1999. We will terminate our Subchapter S corporation status prior
to or concurrent with the issuance of shares in the offering, at which time we
will become subject to corporate income taxation under Subchapter C of the
Internal Revenue Code. Our actual earnings through the date of the offering
could exceed those used in the calculation of the estimated federal and state
income taxes payable by our stockholder thus requiring additional distributions
in the form of cash or notes to our stockholder. We anticipate using cash on
hand and cash generated from future operations to make any such additional
distributions and to fund the payment of the short-term note at maturity. In
addition, we distributed $25.5 million in cash to Mr. McMahon on June 29, 1999
representing a portion of our previously earned and undistributed earnings,
which has been fully taxed at the stockholder level. As of July 30, 1999,
approximately $19.1 million of undistributed earnings were retained in our
company.

We have entered into a tax indemnification agreement with our stockholder,
under which he has agreed to indemnify us for any federal and state income
taxes, including interest and penalties, that we may incur if, for any reason,
we are deemed to be a Subchapter C corporation during any period for which we
reported our taxable income as a Subchapter S corporation, or if an adjustment
to one or more of our tax returns for a C taxable year results in a net
increase in our taxable income in a C taxable year and a net decrease in our
taxable income in an S taxable year. In addition, we have agreed to indemnify
the stockholder for any federal and state income taxes, including interest and
penalties, that Mr. McMahon or the trust may incur if an adjustment to one or
more of our tax returns for an S taxable year results in a net increase in our
taxable income in an S taxable year and a net decrease in our taxable income in
a C taxable year. This tax indemnification obligation is limited to the
aggregate amount of tax distributions to the stockholder for all periods since
fiscal 1995, for which we are subject to tax audit. Purchasers of Class A
common stock in the offering will not be parties to the tax indemnification
agreement.

16
<PAGE>

CAPITALIZATION

The following table sets forth our combined cash, indebtedness and
capitalization as of July 30, 1999 on an actual basis and on a pro forma basis
to reflect the following events prior to or concurrent with the issuance of
shares in the offering:

. the contribution by our stockholder of the stock of two of our
affiliated companies to us;

. the termination of our status as a Subchapter S corporation; and

. the reclassification of our common stock into Class A and Class B common
stock.

And as further adjusted to give effect to:

. the offering of 10,000,000 shares of Class A common stock at an initial
offering price of $17.00 per share; and

. our receipt of the net proceeds from the offering of approximately
$155,600,000, after deducting the underwriting discount and offering
expenses.

This table should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the combined
financial statements and the related notes included elsewhere in this
prospectus.
<TABLE>
<CAPTION>
July 30, 1999
--------------------
Pro forma,
Actual as adjusted
------- -----------
(in thousands,
except
share data)
<S> <C> <C>
Cash and cash equivalents................................ $34,310 $189,910
======= ========
Total debt:
Long-term debt (including current portion)............. $12,538 $ 12,538
Note payable to stockholder due April 10, 2000......... 32,000 32,000
------- --------
Total debt........................................... 44,538 44,538
------- --------
Stockholders' equity:
Class A common stock, $.01 par value; as adjusted,
180,000,000 shares authorized, 10,000,000 shares
issued and outstanding ............................... -- 100
Class B common stock, $.01 par value; as adjusted,
60,000,000 shares authorized, 56,667,000 shares issued
and outstanding(1).................................... 568 567
Additional paid-in capital............................. -- 174,621(2)
Accumulated other comprehensive loss................... (107) (107)
Retained earnings...................................... 32,992 13,872(2)
------- --------
Total stockholders' equity........................... 33,453 189,053
------- --------
Total capitalization................................. $77,991 $233,591
======= ========
</TABLE>
- --------
(1) Prior to the consummation of the offering, two of our affiliated companies
will be contributed to us by our stockholder. As of July 30, 1999, the
capital stock of these entities was as follows: World Wrestling Federation
Entertainment, Inc., formerly Titan Sports Inc., common stock, no par
value, 12,500 shares authorized, and 100 shares issued and outstanding;
World Wrestling Federation Entertainment Canada, Inc., formerly Titan
Promotions (Canada), Inc., common shares, no par value, unlimited
authorization, and 100 shares issued and outstanding; and Stephanie Music
Publishing, Inc. common stock, no par value, 5,000 shares authorized, and
100 shares issued and outstanding.

(2) A reconciliation of actual and pro forma, as adjusted retained earnings and
additional paid-in capital is as follows:

<TABLE>
<S> <C>
Retained earnings--actual.......................................... $ 32,992
Subchapter S corporation earnings retained by us, reclassified to
additional paid-in capital........................................ (19,120)
--------
Retained earnings--pro forma, as adjusted.......................... $ 13,872
========
Additional paid-in capital--actual................................. $ --
Contribution of Stephanie Music Publishing, Inc.................... 1
Subchapter S corporation earnings retained by us, reclassified from
retained earnings................................................. 19,120
Net offering proceeds in excess of par value....................... 155,500
--------
Additional paid-in capital--pro forma, as adjusted................. $174,621
========
</TABLE>

17
<PAGE>

SELECTED HISTORICAL COMBINED FINANCIAL AND OTHER DATA

The following table sets forth our selected historical combined financial
data for each of the five fiscal years in the period ended April 30, 1999 and
as of the end of each such fiscal year and for the three months ended July 31,
1998 and July 30, 1999 and as of July 30, 1999 and selected unaudited pro forma
financial data for the fiscal year ended April 30, 1999 and as of and for the
three months ended July 30, 1999. The selected historical combined financial
data as of April 30, 1998 and 1999 and for the fiscal years ended April 30,
1997, 1998 and 1999 have been derived from the audited combined financial
statements included elsewhere in this prospectus. The selected historical
combined financial data as of April 30, 1995, 1996 and 1997 and for the fiscal
years ended April 30, 1995 and 1996 have been derived from our audited combined
financial statements, which have not been included in this prospectus. The
selected historical combined financial data for the three months ended July 31,
1998 and July 30, 1999 and as of July 30, 1999 have been derived from our
unaudited combined financial statements, which in the opinion of management
include all adjustments, consisting of normal recurring adjustments, that are
necessary to present fairly our results of operations and financial position
for the periods and at the date presented. The results of operations for the
three months ended July 30, 1999 are not necessarily indicative of the results
to be expected for the full year. You should read the selected historical
combined financial data in conjunction with our historical combined 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 prospectus.

18
<PAGE>

<TABLE>
<CAPTION>
Fiscal Year Ended April 30, Three Months Ended
--------------------------------------------- ----------------------------
1995 1996 1997 1998 1999 July 31, 1998 July 30, 1999
------- ------- ------- -------- -------- ------------- -------------
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Combined Statement of
Operations Data:
Net revenues............ $87,352 $85,815 $81,863 $126,231 $251,474 $ 39,042 $ 76,222
Cost of revenues........ 60,558 55,172 60,958 87,969 146,618 25,031 41,045
Selling, general and
administrative
expenses............... 26,205 22,934 25,862 26,117 45,559 8,305 13,970
Depreciation and
amortization........... 2,570 2,354 1,729 1,676 1,946 418 659
Interest expense........ 691 1,025 782 2,019 1,125 245 409
Other income (expense),
net.................... (1,493) (1,026) 777 479 1,747 193 851
------- ------- ------- -------- -------- -------- --------
Income (loss) before
income taxes........... (4,165) 3,304 (6,691) 8,929 57,973 5,236 20,990
Provision (benefit) for
income taxes........... 266 105 (186) 463 1,943 175 714
------- ------- ------- -------- -------- -------- --------
Net income (loss)....... $(4,431) $ 3,199 $(6,505) $ 8,466 $ 56,030 $ 5,061 $ 20,276
======= ======= ======= ======== ======== ======== ========
Unaudited Pro Forma
Combined Statement of
Operations Data:
Historical income before
income taxes........... $ 57,973 $ 20,990
Pro forma adjustment
other than income
taxes.................. 2,515(1) 427(1)
-------- --------
Pro forma income before
income taxes........... 55,458 20,563
Pro forma provision for
income taxes........... 22,227(2) 8,064(2)
-------- --------
Pro forma net income.... $ 33,231 $ 12,499
======== ========
Pro forma earnings per
common share (basic and
diluted)............... $ 0.59(3) $ 0.22(3)
======== ========
Combined Statement of
Cash Flows Data:
Net cash provided by
(used in) operating
activities............. $(2,277) $ 2,245 $ 3,628 $ 6,256 $ 57,646 $ 3,002 $ 17,615
Net cash provided by
(used in) investing
activities............. (1,383) 1,510 (849) (1,294) (14,634)(4) (907) (1,717)
Net cash provided by
(used in) financing
activities............. (192) (4,476) (1,803) 1,974 (6,082) (706) (27,315)
<CAPTION>
As of April 30, As of July 30,
--------------------------------------------- ----------------------------
Pro forma,
as adjusted
1995 1996 1997 1998 1999 1999 1999
------- ------- ------- -------- -------- ------------- -------------
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Combined Balance Sheet
Data:
Cash and cash
equivalents............ $ 1,606 $ 885 $ 1,861 $ 8,797 $ 45,727 $ 34,310(5) $189,910(6)
Property and equipment-
net.................... 32,497 27,368 26,499 26,117 28,377 29,435 29,435
Total assets............ 51,134 46,739 41,856 59,594 130,188 117,514 273,114(6)
Total long-term debt
(including current
portion)............... 10,332 7,608 8,267 12,394 12,791 12,538 12,538
Note payable to
stockholder............ -- -- -- -- -- 32,000(7) 32,000(7)
Total stockholder's
equity................. 23,792 25,304 16,420 22,697 72,260 33,453 189,053(6)
</TABLE>

19
<PAGE>

<TABLE>
<CAPTION>
Fiscal Year Ended April 30, Three Months Ended
-------------------------------------------------- ---------------------------
1995 1996 1997 1998 1999 July 31, 1998 July 30, 1999
--------- --------- --------- --------- --------- ------------- -------------
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Other Financial Data:
EBITDA (8).............. $ 589 $ 7,709 $ (4,957) $ 12,145 $ 59,297 $ 5,706 $ 21,207
Capital expenditures.... 1,568 343 892 1,294 3,756 907 1,717
Other Non-Financial
Data:
Number of live events... 347 247 199 218 199 51 51
Total attendance........ 1,163,259 931,954 1,060,740 1,576,112 2,273,701 489,946 620,258
Average weekly Nielsen
rating of
Raw is War............. 3.0 3.0 2.4 3.1 5.0 4.7 6.6
Pay-per-view buys....... 1,868,900 2,831,700 2,252,200 2,936,100 5,365,100 930,600 1,183,500
</TABLE>
- --------
(1) This amount gives pro forma effect to the increase in compensation to
Vincent and Linda McMahon pursuant to employment agreements that will
become effective prior to the closing of the offering. See "Management."
Historically, both executives were paid less compensation because they
benefited from Subchapter S distributions to Mr. McMahon. Since July 1,
1999, Mr. McMahon and Mrs. McMahon have been paid on a basis consistent
with the terms of their respective employment agreements.
(2) 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 during fiscal 1999 and for the three
months ended July 30, 1999. Prior to or concurrent with the issuance of
shares in the offering, we will terminate our status as a Subchapter S
corporation. See "Reclassification of Stock and Prior Subchapter S
Corporation Status."
(3) Based on a weighted average number of common shares outstanding of
56,667,000 for the fiscal year ended April 30, 1999 and the three month
period ended July 30, 1999.
(4) 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 intend to sell this particular property during
fiscal 2000.
(5) Reflects the distribution of $25.5 million to our stockholder, Mr. McMahon,
on June 29, 1999 representing a portion of previously earned and
undistributed earnings, which have been fully taxed at the stockholder
level. As of July 30, 1999, approximately $19.1 million of undistributed
earnings were retained in our company.
(6) Reflects our receipt of the net proceeds from the offering of approximately
$155.6 million, after deducting the underwriting discount and offering
expenses.
(7) Reflects the accrual of tax distributions in the amount of $32.0 million
relating to estimated federal and state income taxes payable by our
stockholder with respect to our earnings in fiscal 1999 and the period from
May 1, 1999 through September 30, 1999. Accordingly, on June 29, 1999, we
made a Subchapter S corporation distribution to our stockholder in the form
of an unsecured, 5% interest-bearing note in the principal amount of $32.0
million due April 10, 2000, the principal of which will be paid
periodically as estimated income tax payments become due. Our actual
earnings through the date of the offering could exceed those used in the
calculation of the estimated federal and state income taxes payable by our
stockholder thus requiring additional distributions in the form of cash or
notes to our stockholder.
(8) EBITDA is defined by us as net income (loss), plus provision for income
taxes, depreciation and amortization and interest expense less benefit for
income taxes and other income, net.

20
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with the audited
combined financial statements and related notes included elsewhere in this
prospectus.

General

We are 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 our highly successful World Wrestling Federation brand of
entertainment. 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. See "Business" for further information concerning our
management initiatives.

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 are 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 cable television rights fees.

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

The combined financial statements include the financial statements of our
company, formerly known as Titan Sports Inc., and its two wholly-owned
subsidiaries, two affiliated companies and its majority owned subsidiary, which
are presented on a combined basis because of their common ownership. Other than
our Canadian affiliate, none of these entities have been subject to federal
income tax at the corporate level as a Subchapter C corporation. Prior to or
concurrent with the issuance of shares in the offering, we will terminate our
Subchapter S corporation status and will thereafter be subject to federal,
state and foreign income taxes. Following the contribution to us by our
stockholder of the outstanding capital stock of our affiliated companies, the
financial statements will be presented on a consolidated basis. Additionally,
our results of operations in the future will be affected by, among other
matters, the accounting treatment of stock option grants to our performers. For
more information, see "--Recent Pronouncements."

Results of Operations

First Quarter Ended July 30, 1999 Compared to First Quarter Ended July 31,
1998

Net Revenues. Net revenues were $76.2 million in the first quarter of fiscal
2000 as compared to $39.0 million in the first quarter of fiscal 1999, an
increase of $37.2 million, or 95%. Of this increase, $24.4 million was from our
live and televised entertainment activities and $12.8 million was from our
branded merchandise activities.

Live and Televised Entertainment. Net revenues were $51.3 million in the
first quarter of fiscal 2000 as compared to $26.9 million in the first quarter
of 1999, an increase of $24.4 million, or 91%. This increase was primarily
attributable to an increase in pay-per-view revenues of $7.1 million, which
resulted from an increase in pay-per-view buys from approximately 0.9 million
to approximately 1.2 million, or 33%. All three of our

21
<PAGE>

pay-per-view events contributed to this increase. Revenues from attendance at
our events increased by $6.6 million in the first quarter of fiscal 2000.
Attendance at our events has increased by approximately 0.1 million and our
average ticket price has increased by approximately $5 per ticket. As part of
our new contracts with the USA Network, we substantially increased the amount
of advertising time available for sale by our sales force. This inventory,
coupled with improved ratings of our television programs, resulted in increased
revenues from the sale of advertising time and sponsorships of $9.4 million in
the first quarter of fiscal 2000.

Branded Merchandise. Net revenues were $24.9 million in the first quarter of
fiscal 2000 as compared to $12.1 million in the first quarter of fiscal 1999,
an increase of $12.8 million, or 106%. This increase was due primarily to the
increases in home video revenues of $5.2 million, licensing revenues of $4.7
million, publishing revenues of $1.7 million, and new media revenues of $1.3
million. In March 1998, we began to produce our home videos in-house, and since
that time, we have developed a catalog of approximately 50 titles. This
expanded catalog, coupled with the significant expansion of our customer base,
resulted in an increase of 0.7 million home video units sold in the first
quarter of fiscal 2000 as compared to the first quarter of fiscal 1999. The
increase in licensing revenues resulted from heightened demand for our branded
products, particularly in the video game and toy categories. The increase in
publishing revenues was due to increased newsstand and subscription sales. The
total circulation of our two monthly magazines increased from 1.1 million in
the first quarter of fiscal 1999 to 1.8 million in the first quarter of fiscal
2000. The growth in new media revenues reflects the increased traffic on our
Internet web sites. Our main site, wwf.com, generated approximately 107 million
monthly page views in the first quarter of fiscal 2000 as compared to
approximately 14 million monthly page views in the first quarter of fiscal
1999. In addition, there were an average of approximately 1.7 million visitors
per month in the first quarter of fiscal 2000 as compared to approximately 0.5
million visitors per month in the first quarter of fiscal 1999.

Cost of Revenues. Cost of revenues was $41.0 million in the first quarter of
fiscal 2000 as compared to $25.0 million in the first quarter of fiscal 1999,
an increase of $16.0 million, or 64%. Of this increase, $11.3 million was from
our live and televised entertainment activities, and $4.7 million was from our
branded merchandise activities. Gross profit as a percentage of revenues
increased to 46% in the first quarter of fiscal 2000 from 36% in the first
quarter of fiscal 1999.

Live and Televised Entertainment. The cost of revenues to create and
distribute our live and televised entertainment was $28.5 million in the first
quarter of fiscal 2000 as compared to $17.2 million in the first quarter of
fiscal 1999, an increase of $11.3 million, or 66%. Of the $11.3 million
increase in cost of revenues, $6.0 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 primarily due to a $1.5 million increase in arena
rental charges, which are directly related to our increased revenues from event
attendance, a $1.3 million increase in television production costs associated
with our additional television programming, and a $0.6 million increase in
advertising and promotion costs. Gross profit as a percentage of net revenues
increased to 44% in the first quarter of fiscal 2000 from 36% in the first
quarter of fiscal 1999. 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 ticket
prices at our events.

Branded Merchandise. The cost of revenues to market and promote our branded
merchandise was $12.5 million in the first quarter of fiscal 2000 as compared
to $7.8 million in the first quarter of fiscal 1999, an increase of $4.7
million, or 60%. The increase in cost of revenues was due to the increased
revenues from home videos, licensing, and new media. Of the $4.7 million
increase, $2.1 million related to home video, $1.9 million related to licensing
and $0.7 million related to new media. Gross profit as a percentage of net
revenues increased to 50% in the first quarter of fiscal 2000 from 36% in the
first quarter of fiscal 1999. Home video gross profit percentage increased
primarily due to an increase in the licensing revenues from the international
distribution of our titles. The increase in publishing gross profit percentage
was due to the decrease in the average cost per copy sold for both of our
magazines. Licensing revenues increased, which favorably impacted our overall
gross profit percentage of our branded merchandise activities.

22
<PAGE>

Selling, General, and Administrative Expenses. Selling, general and
administrative expenses, which include corporate overhead expenses, were $14.0
million in the first quarter of fiscal 2000 as compared to $8.3 million in the
first quarter of fiscal 1999, an increase of $5.7 million, or 69%. During
fiscal 1999, we engaged in strategic initiatives to expand our business, which
required an increase in the number of full-time personnel by 67 persons. The
increase in personnel reflects the impact of 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 the first
quarter 2000 as compared to 21% in the first quarter of fiscal 1999.

Depreciation and Amortization. Depreciation and amortization expense was $0.7
million in the first quarter of fiscal 2000 as compared to $0.4 million in the
first quarter of fiscal 1999, an increase of $0.3 million. This increase was
due to amortization of capitalized expenditure projects completed in 1999.

Interest Expense. Interest expense was $0.4 million in the first quarter of
fiscal 2000 as compared to $0.2 million in the first quarter of fiscal 1999.
The increase of $0.2 million was primarily due to interest accrued on the $32.0
million note issued to Mr. McMahon on June 29, 1999.

Other Income, Net. Other income, net was $0.9 million in the first quarter of
fiscal 2000 as compared to $0.2 million in the first quarter of fiscal 1999.
The increase of $0.7 million was due primarily to interest earned on our
significantly higher cash balances.

Provision for Income Taxes. As a Subchapter S corporation, we have had to
provide only for some state and foreign income taxes, as our stockholder was
responsible for the payment of federal and certain other state income taxes in
these years. Income taxes were $0.7 million in the first quarter of fiscal 2000
as compared to $0.2 million in the first quarter of fiscal 1999. Upon the
termination of our Subchapter S corporation election, we will be 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 $8.1
million, which represents an effective income tax rate of 39%.

Net Income. As a result of the foregoing, Subchapter S corporation net income
was $20.3 million in the first quarter of fiscal 2000 as compared to $5.1
million in the first quarter of fiscal 1999, an increase of $15.2 million, or
298%. On a pro forma basis, giving effect to the termination of our S
corporation election and other pro forma adjustments, pro forma net income for
the first quarter of fiscal 2000 would have been $12.5 million.

Fiscal 1999 Compared to Fiscal 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, $77.4 million was from our live and televised entertainment
activities, and $47.9 million was from our branded merchandise activities.

Live and Televised Entertainment. Net revenues were $170.0 million in fiscal
1999 as compared to $92.6 million in fiscal 1998, an increase of $77.4 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
from approximately 2.9 million to approximately 5.4 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 from approximately 1.6 million in fiscal
1998 to approximately 2.3 million in fiscal 1999, 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 $81.5 million in fiscal 1999 as
compared to $33.6 million in fiscal 1998, an increase of $47.9 million, or
143%. This increase was due primarily to increases in licensing

23
<PAGE>

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 $146.6 million in fiscal 1999 as
compared to $88.0 million in fiscal 1998, an increase of $58.6 million, or 67%.
Of this increase, $30.6 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 $98.1 million in fiscal
1999 as compared to $67.5 million in fiscal 1998, an increase of $30.6 million,
or 45%. Of the $30.6 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 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 1999 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 $45.6
million in fiscal 1999 as compared to $26.1 million in fiscal 1998, an increase
of $19.5 million, or 75%. 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. We anticipate that
selling, general and administrative expenses will increase by approximately
$13.5 million in fiscal 2000, reflecting the full year impact of the increase
in headcount in fiscal 1999 and the continued expansion of our business.

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.

24
<PAGE>

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.

Other Income, Net. Other income, net was $1.7 million in fiscal 1999 as
compared to $0.5 million in fiscal 1998. The increase of $1.2 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 have 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 will be 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%.

Net Income. As a result of the foregoing, Subchapter S corporation net income
was $56.0 million for fiscal 1999 as compared to $8.5 million for fiscal 1998,
an increase of $47.5 million, or 559%. On a pro forma basis, giving effect to
the termination of our S corporation election and other pro forma adjustments,
pro forma net income for fiscal 1999 would have been $33.2 million.

Fiscal 1998 Compared to Fiscal 1997

Net Revenues. Net revenues were $126.2 million in fiscal 1998 as compared to
$81.9 million in fiscal 1997, an increase of $44.3 million, or 54%. Of this
increase, $28.7 million was from our live and televised entertainment
activities, and $15.6 million was from our branded merchandise activities.

Live and Televised Entertainment. Net revenues were $92.6 million in fiscal
1998 as compared to $63.9 million in fiscal 1997, an increase of $28.7 million,
or 45%. This increase was primarily attributable to an increase in pay-per-view
revenues of $17.1 million, which resulted from an increase in pay-per-view buys
from approximately 2.3 million to approximately 2.9 million, or 26%. A
substantial portion of this increase was generated by Wrestlemania XIV.
Revenues from attendance at our events increased by $8.0 million in fiscal 1998
as a result of an increase in attendance from approximately 1.1 million to
approximately 1.6 million, or 45%, and, to a lesser extent, higher average
ticket prices. Advertising revenues increased by $2.8 million due to the
increase in our television ratings and the expansion of our sponsorship
program.

Branded Merchandise. Net revenues were $33.6 million in fiscal 1998 as
compared to $18.0 million in fiscal 1997, an increase of $15.6 million, or 87%.
The increase in revenues was due primarily to increased revenues from direct
sale merchandise revenues of $11.0 million and licensing revenues of $3.8
million. The increase in merchandise revenues was due to higher attendance and
a 44% increase in per capita spending at our live events. During fiscal 1997,
we made a decision to terminate a licensing agreement relating to our direct
mail catalog and to bring this operation in-house. The increase in direct sale
merchandise revenues also reflects the impact of our decision to terminate this
licensing agreement. The increase in licensing revenues resulted from an
increase in the number of licensees and heightened demand for our branded
products, particularly action figures.

Cost of Revenues. Cost of revenues was $88.0 million in fiscal 1998 as
compared to $61.0 million in fiscal 1997, an increase of $27.0 million, or 44%.
Of this increase, $18.5 million was from our live and televised entertainment
activities, and $8.5 million was from our branded merchandise activities. Gross
profit as a percentage of net revenue was 30% in fiscal 1998 as compared to 26%
in fiscal 1997.

Live and Televised Entertainment. The cost of revenues to create and
distribute our live and televised entertainment was $67.5 million in fiscal
1998 as compared to $49.0 in fiscal 1997, an increase of $18.5 million, or 38%.
Of the $18.5 million increase in cost of revenues, $11.6 million related to
expenditures

25
<PAGE>

for special guest talent for Wrestlemania XIV and fees paid to our talent which
are directly related to our increased revenues. The remaining increase was due
to a $3.4 million increase in production costs associated with our additional
television programming, a $2.4 million increase in arena rental charges, which
are directly related to our increased revenues from event attendance, and a
$1.1 million increase in pay-per-view distribution fees which are directly
associated with our increased pay-per-view revenues. Gross profit as a
percentage of revenues was 27% in fiscal 1998 as compared to 23% in fiscal
1997. The increase in gross profit was due to the increase in our live event
attendance and the increase in our cable television programming rights fees due
to the expansion of Raw is War from a one hour to a two hour format. These
increases were partially offset by expenditures for special guest talent for
Wrestlemania XIV.

Branded Merchandise. The cost of revenues to market and promote our branded
merchandise was $20.5 million in fiscal 1998 as compared to $12.0 million in
fiscal 1997, an increase of $8.5 million, or 71%. The increase in cost of
revenues was due to the full year impact of our decision to terminate an
agreement with respect to catalog sales and to handle this function in-house
and due to increased merchandise costs directly resulting from the increased
merchandise revenues. Gross profit as a percentage of revenues was 39% in
fiscal 1998 as compared to 33% in fiscal 1997. The increase in gross profit was
primarily a result of increased sales of our direct sale merchandise at our
events and the full year impact of our decision to handle catalog sales
in-house.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses were $26.1 million in fiscal 1998 as compared to $25.9
million in fiscal 1997, an increase of $0.2 million.

Depreciation and Amortization. Depreciation and amortization expense was $1.7
million in both fiscal 1998 and fiscal 1997.

Interest Expense. Interest expense was $2.0 million in fiscal 1998 as
compared to $0.8 million in fiscal 1997. The increase of $1.2 million reflects
higher borrowings related to the mortgage loan obtained in December 1997,
partially offset by a decrease in borrowings under the revolving credit
facility and lower average borrowing rates.

Other Income, Net. Other income, net was $0.5 million in fiscal 1998 as
compared to $0.8 million in fiscal 1997. This decrease of $0.3 million
primarily reflects a one-time gain realized in fiscal 1997 from an insurance
claim reimbursement relating to a transmission loss at one of our pay-per-view
events.

Provision for Income Taxes. As a Subchapter S corporation, we have had to
provide only for some state and foreign income taxes as our stockholder was
responsible for the payment of federal and certain state income taxes in these
years. Income taxes were $0.5 million in fiscal 1998 as compared to an income
tax benefit of $0.2 million in fiscal 1997, reflecting modest increases in
state and foreign income taxes paid.

Net Income (Loss). As a result of the foregoing, Subchapter S corporation net
income was $8.5 million for fiscal 1998 as compared to a net loss of $6.5
million for fiscal 1997.

Liquidity and Capital Resources

Cash flows from operating activities increased during the first quarter 2000
to $17.6 million from $3.0 million in the first quarter 1999. This improvement
primarily reflects the increase in operating income that we experienced in the
first quarter 2000. Working capital, consisting of current assets less current
liabilities, was $12.0 million as of July 30, 1999 and $12.2 million as of July
31, 1998. Cash flows from operating activities increased during fiscal 1999 to
$57.6 million from $6.3 million in fiscal 1998 and $3.6 million in fiscal 1997.
This improvement primarily reflects the increase in operating income that we
experienced in fiscal 1999. Working capital (deficiency) was $52.7 million,
$8.3 million and $(3.9) million as of April 30, 1999, 1998 and 1997,
respectively.

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<PAGE>

Cash flows used in investing activities were for capital expenditures, which
were $1.7 million in the first quarter of fiscal 2000 as compared to $0.9
million in the first quarter 1999. The increase in capital expenditures in the
first quarter of fiscal 2000 was principally due to the purchase of equipment
for our television and post-production facility. Cash flows used in investing
activities were $14.6 million in fiscal 1999, $1.3 million in fiscal 1998 and
$0.8 million in fiscal 1997. The increase in fiscal 1999 principally reflects
the acquisition of a 193-room hotel and casino facility in Las Vegas, Nevada
totaling $10.9 million. In addition, we made other payments related to the
hotel and casino totaling $2.3 million as of July 30, 1999. We have since
determined that the ownership and operation of this particular property is no
longer consistent with our business objectives, and we intend to sell this
property during fiscal 2000. This property is classified on the combined
balance sheet as an asset held for sale. In the future, we may seek to develop
branded location-based entertainment businesses directly or through licensing
agreements, joint ventures or other arrangements. Capital expenditures were
$3.7 million in fiscal 1999, $1.3 million in fiscal 1998, and $0.9 million in
fiscal 1997. The increase in capital expenditures in fiscal 1999 was due
primarily to the purchase of equipment for use in our television and post-
production facility.

Cash flows used in financing activities were $27.3 million in the first
quarter of fiscal 2000 as compared to $0.7 million in the first quarter of
fiscal 1999. We made Subchapter S corporation distributions to our stockholder
totaling $59.1 million in the first quarter of fiscal 2000 and $0.5 million in
the first quarter of fiscal 1999. The increase in Subchapter S distributions
was due principally to the distribution made to Mr. McMahon on June 29, 1999,
of cash in the amount of $25.5 million out of our earned and undistributed
earnings which have been fully taxed at the stockholder level. In addition, we
made an S distribution to Mr. McMahon in the form of an unsecured, 5% interest-
bearing note due April 10, 2000 in an amount equal to the estimated income
taxes payable by Mr. McMahon in respect of income taxes for fiscal 1999
estimated to be $22.0 million and for the interim period May 1, 1999 through
September 30, 1999 estimated to be $10.0 million. Our actual earnings through
the date of the offering could exceed those used in the calculation of the
estimated federal and state income taxes payable by our stockholder thus
requiring additional distributions in the form of cash or notes to our
stockholder. Cash flows (used in) provided by financing activities were $(6.1)
million in fiscal 1999, $2.0 million in fiscal 1998, and $(1.8) million in
fiscal 1997. We made Subchapter S corporation distributions to our stockholder
totaling $6.5 million in fiscal 1999, $2.2 million in fiscal 1998 and $2.4
million in fiscal 1997.

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 August 20, 1999, the outstanding principal
amount of the term loan was $11.3 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. 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 August 20, 1999, no amounts were outstanding under the
revolving portion of this credit agreement. We intend to seek modifications to
our credit agreement to increase the amounts available to borrow on more
favorable terms and conditions, extend the length of the term and reflect the
termination of our Subchapter S corporation status. We can give no assurance
that we will be able to negotiate acceptable modifications to the revolving
credit agreement.

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% (8.9% at August 20, 1999) to be repaid in
29 monthly installments. The studio equipment purchased with the proceeds

27
<PAGE>

of the loan, as well as the other collateral under the revolving credit
agreement, collateralizes the term loan. As of August 20, 1999, the outstanding
principal amount of the loan was $0.9 million, of which $0.6 million was
classified on our combined balance sheet as a current liability.

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 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. An agreement with respect to one hour of programming
expires in September 2000, and the other agreement with this
network, which covers four hours, expires in September 2001 but may
be terminated earlier by either party. We have recently entered into
a one year agreement with the United Paramount Network expiring in
September 2000, which covers two hours of programming every week and
which also provides for a minimum performance payment by us.

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

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

For the next three fiscal years, our aggregate minimum payment obligations
under these contracts, including the recent United Paramount Network commitment
and the employment agreements with Vincent and Linda McMahon, are $41.3 million
for fiscal 2000, $35.7 million for fiscal 2001, and $16.3 million for fiscal
2002. We anticipate that all of these obligations will be satisfied out of cash
flow from operating activities.

We believe that cash generated from operations, together with amounts
available under the revolving credit agreement and net proceeds from the
offering, 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.

Year 2000 Readiness Disclosure

Overview. We are currently working to eliminate the potential impact on the
processing of date-sensitive information by our computer and non-information
systems of dates beginning with January 1, 2000. Year 2000 issues exist when
computers record years using two digits rather than four, and then use that
information for arithmetic operations, comparisons or sorting. A two-digit
recording program may recognize a date using "00" as 1900 rather than 2000,
which could cause it or the computer on which the program is running to perform
inaccurate computations or fail to operate. Year 2000 issues are not limited to
computers and can also affect non-information systems, such as elevators, which
use embedded technology.

Our Year 2000 project team is composed of internal information systems,
operations, finance and executive personnel as well as external information
systems consultants. We began our Year 2000 compliance program during 1997 by
identifying and assessing the potential impact of the Year 2000 on both our
information and non-information systems.

Our Year 2000 project team has divided our operations into the following
three categories: management information systems, television programming and
facilities.

. Management information systems include all internally developed and
externally acquired hardware, software, networking and
communications equipment.

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<PAGE>

. Television programming has been further subdivided into production,
graphics and music. Production includes equipment used in our
television studio. Graphics includes all special effects hardware
and software. Music includes musical instruments and recording
equipment used in our music studio.

. Facilities covers all non-information technology systems not
included in the television programming category, such as heat,
ventilation and air conditioning systems, fire alarms, security
systems and elevators.

State of Readiness. We have completed the identification and assessment of
all information and non-information systems that process date-sensitive
information. We are testing and remediating non-compliant systems and
developing contingency plans for systems that may not be Year 2000 compliant by
the necessary date.

Management Information Systems. We have either replaced or purchased upgrades
to most non-compliant externally purchased software packages. Installation of
most upgrades to non-compliant software has been completed. We expect all
externally purchased software to be fully compliant by September 1999. All
internally developed software programs have been reviewed, and the program code
for non-compliant internally developed software programs has been rewritten.
All internally developed and externally purchased software has been tested for
compliance, and most is currently compliant. All hardware, networking and
communications equipment are Year 2000 compliant.

Television Programming. We have contacted substantially all of the
manufacturers of our television production equipment. Approximately 90% of
these manufacturers have responded to us. The vast majority of those responding
have represented that their equipment that is used by us is Year 2000
compliant. We are in the process of upgrading some of our television production
equipment as recommended by the manufacturers who have responded that their
equipment is non-compliant. We have contacted substantially all of the
manufacturers of our graphics equipment. We have received responses from
approximately 80% of these manufacturers and are in the process of replacing
non-compliant graphics equipment. All music equipment in our music studio is
Year 2000 compliant.

Facilities. We are in the process of replacing all non-information systems
that are not Year 2000 compliant. We expect all non-information systems to be
compliant by October 1999.

Third Parties. We have sent Year 2000 compliance surveys to all of our
significant business partners, vendors and customers. Although we have little
or no control over the Year 2000 compliance efforts of these third parties, we
are making an effort to determine the level of compliance of each such party.
Approximately 60% have responded that they are either compliant or in the
process of becoming compliant. We have focused particular attention on the Year
2000 readiness of our primary cable television network carrier, the USA
Network. We have received assurances that such cable television network carrier
anticipates being Year 2000 compliant. However, we cannot assure you that they
will be compliant.

Costs. As of July 30, 1999, we had spent less than $100,000 on our Year 2000
compliance program. We expect to incur additional costs of less than $100,000
to complete our compliance program, excluding the approximately $200,000 cost
of a previously planned heating and air-conditioning system replacement. Such
amounts include normal system upgrades and replacements. Costs specifically
associated with modifying our systems for Year 2000 compliance have been
expensed as incurred. Based on our assessment to date, we do not expect the
remaining costs of our Year 2000 compliance program to have a material effect
on our results of operations, financial position or liquidity.

Risks. Our objective is to achieve timely and substantial Year 2000
compliance. Despite our efforts to reduce the potential negative impact of the
Year 2000 problem, situations could occur that would adversely impact our
business and operations. We believe that prior to January 2000 we will have
addressed any Year 2000 issues affecting our internal systems. On the other
hand, a reasonably likely worst case scenario is that

29
<PAGE>

one or more of our significant business partners, cable and network television
distributors, vendors or customers will be unable to become Year 2000 compliant
on a timely basis. This could negatively impact our revenues. For example,
disruptions in cable television systems would seriously hinder our ability to
distribute our television and pay-per-view programs. These problems would
continue until alternative distribution arrangements could be made.

Contingency Plans. We have identified alternative methods of conducting
various operations and functions in the event that certain equipment or third
parties are not Year 2000 compliant. These alternatives include manual
processing of information, utilizing back-up equipment and identifying
alternative business partners and vendors.

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.

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
Accounting Standards No. 133 "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 is effective for 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 14 to the combined financial
statements.

On March 31, 1999, the Financial Accounting Standards Board issued an
Exposure Draft, "Accounting for Certain Transactions Involving Stock
Compensation," which would apply accounting principles to stock options granted
to independent contractors that are different from the accounting principles
applied to stock options granted to employees. These new accounting principles
would apply to all stock option awards made after December 15, 1998. In
connection with the offering, we will be granting stock options to independent
contractors consisting primarily of our performers to purchase in the aggregate
960,000 shares of our Class A common stock. We will account for such grants 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." Based upon the terms of such option grants, we
expect to record a second quarter fiscal 2000 non-cash charge of approximately
$5.9 million.

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.

30
<PAGE>

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 have experienced significant growth in
many aspects of our business. We believe this growth has been driven by a
series of management decisions initiated in late 1997 to reposition our
business. These decisions include:

. 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;

. Grow our Internet operations to further promote our brand and to
develop additional sources of revenue;

. Form strategic relationships with other media and entertainment
companies to further promote our brand and our products;

. Create new forms of entertainment and brands that complement our
existing businesses, including the development of new television
programming that will extend beyond our current programming, all of
which will appeal to our targeted demographic market; and

. Develop branded location-based entertainment businesses directly or
through licensing agreements, joint ventures or other arrangements.

Prior to the offering, we changed our corporate name from Titan Sports Inc.
to World Wrestling Federation Entertainment, Inc. We incorporated in Delaware
in 1987, and in 1988 we merged with our predecessor company, which had existed
since 1980. Our two wholly-owned subsidiaries, WWF Hotel and Casino Ventures,
LLC and TSI Realty Company, and our majority owned subsidiary, Titan/Shane
Partnership, are immaterial to our operations and were organized for regulatory
purposes only. Prior to the offering, our stockholder will contribute to us all
of the stock of two affiliated companies, World Wrestling Federation
Entertainment Canada, Inc. and Stephanie Music Publishing, Inc. As a result,
these companies will become our wholly-owned subsidiaries.

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<PAGE>

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 110
performers. Our performers are independent contractors who are highly trained
and motivated and portray popular characters such as The Big Show, Kane,
Mankind, The Rock, Stone Cold Steve Austin, and The Undertaker. 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. Promising candidates are often "loaned" to small
regional promoters of wrestling events, 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.

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 $26.9
million and $51.3 million for the three months ended July 31, 1998 and July 30,
1999, respectively, and were approximately $63.9 million, $92.6 million and
$170.0 million in fiscal 1997, 1998 and 1999, respectively. See note 13 to the
combined financial statements for segment information.

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.

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<PAGE>

In fiscal 1999, we held approximately 200 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. The chart below
illustrates some of the larger arenas throughout the world at which we have
held our live events:

<TABLE>
<CAPTION>
Metropolitan Area Arena Capacity
- ----------------- ----- --------
<S> <C> <C>
United States
New York, New York Madison Square Garden 19,588
Los Angeles, California Arrowhead Pond of Anaheim 16,528
Chicago, Illinois Allstate Arena 18,242
Philadelphia, Pennsylvania First Union Center 20,193
San Francisco, California San Jose Arena 17,447
Boston, Massachusetts Fleet Center 17,948
Dallas, Texas Reunion Arena 14,913
Washington, D.C. MCI Center 19,109
Detroit, Michigan Joe Louis Arena 15,640
Houston, Texas Compaq Center 16,562
Seattle, Washington Key Arena 15,661
Cleveland, Ohio Gund Arena 20,698
Tampa, Florida Sun Dome 10,960
Minneapolis, Minnesota Target Center 18,870
Miami/Ft. Lauderdale, Florida National Car Rental Center 20,159
Phoenix, Arizona America West Arena 19,222
Pittsburgh, Pennsylvania Pittsburgh Civic Arena 17,780
Sacramento, California Arco Arena 15,894
International
Toronto, Canada Skydome 32,155
Manchester, England The Manchester Evening News Arena 19,503
</TABLE>

33
<PAGE>

During the last three years, attendance at our live events has increased
dramatically, as illustrated in the chart below:

Live Event Attendance by Fiscal Year
(in millions)

[BAR CHART]

199 218 199
Events Events Events
1997 1998 1999
-----------------------------------------

1.1 1.6 2.3

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 $20 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

Four of our seven television shows are carried by the USA Network, which is
available in approximately 75 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 120 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, which is available in
approximately 82 million households in the United States. We voluntarily
designate the suitability of each of our shows using standard television
industry ratings.

According to the Nielsen ratings, Raw is War was the number one rated
regularly scheduled show on cable television for 19 consecutive weeks through
June 30, 1999, achieving an average weekly rating of 6.2 for the

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<PAGE>

six months ended June 30, 1999. Further, during the second quarter of fiscal
1999, Raw is War earned 26 of the top 30 hourly rankings on Nielsen's list of
the most watched shows on basic cable networks. Since 1997, the popularity of
Raw is War has increased significantly, as demonstrated by the consistent
increase in the show's Nielsen ratings from December 1996 to June 1999. In
addition, since its inception in August 1998, Sunday Night Heat has been rated
among the top ten regularly scheduled cable shows, achieving an average weekly
Nielsen rating of 3.9. For the USA Network, each rating point is equivalent to
approximately 750,000 households. According to the Nielsen rating service,
there are 1.4 viewers per household. Based on this data, Raw is War, for the
six months ended June 30, 1999, averaged approximately 6.5 million viewers
weekly, and Sunday Night Heat, since its inception, has averaged 4.1 million
viewers weekly.

Average Weekly Ratings
for the Six Months Ended

[BAR CHART]

Sunday Night Heat
Raw is War (Premiered Sept. 1998)
---------- ----------------------
Dec 96 2.3
June 97 2.5
Dec 97 2.8
June 98 4.2
Dec 98 4.6 3.7
June 99 6.2 4.2

Our brand of entertainment appeals to a wide demographic audience, and
although it is principally directed to audiences aged 18 to 34, it has become
particularly popular with two groups in the United States 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 50 major
advertisers and sponsors. Advertising time and customized sponsorship programs
are sold directly by our New York and Chicago-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.

Accordingly, we negotiated a new arrangement with the USA Network pursuant to
which we obtained the right to sell a substantial majority of the advertising
inventory in our shows, beginning in September 1998, 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. Recently, we negotiated a
similar arrangement with the United Paramount Network, pursuant to which we
sell a substantial majority of the advertising inventory in WWF SmackDown!,

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<PAGE>

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.
The following are some of our leading advertisers and sponsors:

AT&T Greyhound Miramax Sega
Burger King GT Interactive Motel 6 Sony Playstation
Castrol Hasbro Nestle Universal
Chef Boyardee Heinz Nintendo Pictures
Coca Cola Honda Paramount Pictures U.S. Air Force
Fram JVC Phillips Electronics U.S. Army
Gatorade MCI Quaker State U.S. Navy
Gillette M&M/Mars Radio Shack Wendy's
Western Union

The following chart shows the growth of our net revenue from television
advertising and sponsorships during the past three fiscal years:

Revenue From Television Advertising &
Sponsorships by Fiscal Year
(in millions)

[BAR CHART]

1997 1998 1999(1)
---- ---- ----

$9.4 $12.2 $30.1

- --------
(/1/) The darker portion of the bar represents the revenues from the sale of
additional advertising time made available to us under our new
arrangement with the USA Network.

Our television programs are viewed in over 150 countries in nine different
languages. We edit and produce Spanish-language versions of our shows at our
television studio in Stamford, Connecticut. Voice-overs in other languages are
inserted by local broadcasters.

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<PAGE>

Our state-of-the-art facility in Stamford, Connecticut, which houses our
television and music recording studios and post-production operations, is
staffed by 73 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 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 1999, we had approximately 5.4 million buys for these
events. Wrestlemania XV, which aired on March 28, 1999, was one of the most
subscribed pay-per-view programs ever, excluding professional boxing events,
with approximately 800,000 buys. On different occasions we have used
celebrities and special talent to appear in and promote our pay-per-view
events.

As illustrated below, pay-per-view buys of our events have more than doubled
over the past three fiscal years, increasing from approximately 2.3 million in
fiscal 1997 to approximately 2.9 million in fiscal 1998 and approximately 5.4
million in fiscal 1999.

Pay-Per-View Buys by Fiscal Year
(in millions)

[BAR CHART]

1997 1998 1999
----------------------------------------
2.3 2.9 5.4

Our premier event, Wrestlemania, has a suggested retail price of $34.95, 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 Viewer's Choice, the leading distributor of pay-
per-view programming in the United States.

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<PAGE>

Currently, pay-per-view is available to approximately 33 million cable
subscribers in the United States, or approximately 40% of total cable
subscribers. Viewer's Choice has the capacity to distribute our pay-per-view
broadcasts to approximately 29 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.

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
$12.1 million and $24.9 million for the three months ended July 31, 1998 and
July 30, 1999, respectively, and $18.0 million, $33.6 million and $81.5 million
in fiscal 1997, 1998 and 1999, respectively. See note 13 to the combined
financial statements for segment information.

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 aggressively expand the number of licensees from less than 50 to
approximately 85. 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 1999, estimated retail revenues
from the sale of our branded merchandise through our licensees was
approximately $400 million. In addition, we have licensed our brand to a third
party to operate theme restaurants. The first such restaurant is expected to
open in New York City in late 1999.

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 WWF Magazine and 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 $19.95.

38
<PAGE>

Unit sales for our first full fiscal year of in-house operations were
approximately 2.5 million units. Our home video revenues are derived from sales
through approximately 30 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 August 28, 1999.

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 rights to this music. A third party
manufactures and distributes CDs of our music to retailers nationwide, such as
Tower Records, Best Buy, Target and Circuit City.

To date, we have compiled four collections of our music for distribution. Our
most recent music compilation, World Wrestling Federation--The Music Volume
III, achieved platinum status and reached number 10 on the Billboard 200,
selling approximately 1.4 million units as of June 30, 1999.

Publishing

Our publishing operations consist primarily of two monthly magazines, WWF
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 newsstand and
subscription circulations approximated 3.7 million and 2.1 million,
respectively, in fiscal 1999.

Our in-house publishing and editorial departments prepare all of the
editorial content and use outside contractors to print and distribute the
magazines to subscribers and newsstands. The magazines target different market
demographics, with WWF Magazine aimed towards the younger 12 to 16 year old
group and RAW Magazine towards readers over 16 years old. Given the nature of
the content in RAW Magazine, we include a notation on the cover that the
magazine may not be suitable for readers under 16 years old.

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
wwfshopzone.com, stonecold.com and wwfdivas.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 by us. We continue
to build our Internet advertising sales force which will work with our
television advertising sales force to market our sites to current and
prospective advertisers.

In June 1999, our main site, wwf.com, generated approximately 100 million
page views, and, according to Media Metrix, we had approximately 1,581,000
visitors, who spent an average of 13.8 minutes on our site during the month. 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. Our Internet presence has
been expanding at a rapid rate. We have experienced a

39
<PAGE>

significant increase in the number of people visiting our sites and purchasing
our products via the Internet. The following table demonstrates the rapid
growth of our Internet operations over the past year:

<TABLE>
<CAPTION>
June 1998 June 1999
----------- ------------
<S> <C> <C>
Visitors........................................... 401,000 1,581,000
Page Views......................................... 13,700,000 100,027,000
Merchandise Sales.................................. $ 156,900 $ 206,600
Number of Registered Users......................... 14,000 489,000
</TABLE>

We intend to expand our new media operations to leverage our brand and create
multiple revenue streams for future growth.

Competition

In our sports entertainment market, we compete on a national basis primarily
with 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.

Trademarks and Copyrights

We have a portfolio of approximately 900 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
photographs, 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 1,000 copyrights,
trademarks and service marks covering all of the merchandise, publications,
home videos, programming and characters featured in our story lines. 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, 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, which we believe is not restricted by this agreement. Additionally,
we currently own over 60 Internet Web domain names and have a network of
developed sites, which contribute to the exploitation of our trademarks and
service marks worldwide.

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.

40
<PAGE>

Employees

As of August 20, 1999, we had 295 full-time employees, none of whom were
represented by a union. Of that total, 112 were primarily engaged in organizing
and producing live performances and television and pay-per-view shows, 47 were
primarily engaged in licensing, merchandising and consumer product sales, and
136 were primarily engaged in management and administration. Our in-house
production staff is supplemented with contract personnel on an as-needed basis.
We believe that our relationships with our employees are generally
satisfactory.

Performers

We have exclusive contracts with approximately 110 performers, ranging from
development contracts with prospective performers to long-term guaranteed
contracts with established performers. Our performers are independent
contractors, whose contracts with us 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. Our performers share in a
portion of the revenues that we receive. We believe that our relationships with
our performers are generally satisfactory.

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.

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 and warehouse facilities. While
we believe that our facilities are adequate for our current needs, over the
next two years 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:

<TABLE>
<CAPTION>
Expiration Date
Facility (1) Location Square Feet Owned/Leased of Lease
- ------------ -------- ----------- ------------ ---------------
<S> <C> <C> <C> <C>
Executive offices Stamford, CT 114,300 Owned --
Production studios Stamford, CT 39,900(2) Owned --
Sales office New York, NY 7,977 Leased July 15, 2008
Sales office Toronto, Canada 3,311 Leased April 30, 2004
Sales office Chicago, IL 347 Leased April 30, 2000
Warehouse Trumbull, CT 7,900 Leased Month-to-Month(3)
</TABLE>
- --------
(1) Does not include our 193-room hotel and casino in Las Vegas, Nevada, which
we intend to sell during fiscal 2000. See note 4 to combined financial
statements.
(2) Excluding 138,000 square feet of parking space adjacent to the production
facilities.
(3) We have entered into a lease for expanded warehouse space, which will
replace this warehouse lease. The new lease will commence when construction
of the new warehouse space is completed and expire five years thereafter.

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.

41
<PAGE>

The licensing and operation of this facility is fully managed by a third-party
contractor. However, 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. Five states require that our performers maintain a medical
license, which entails 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 licenses for our performers. We
are in substantial compliance with all applicable state and local regulations.

Television Programming

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

Other

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.

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 a verbal 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 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 in
the action described above. 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. Discovery has not
been completed, and no trial date has been scheduled. We believe that an
unfavorable outcome in these actions may have a material adverse effect on our
financial condition, results of operations or prospects.

42
<PAGE>

On August 28, 1996, James Hellwig, a former professional wrestler who had
been one of our performers, filed a suit against us in state court in Arizona
alleging breach of two separate service contracts, defamation and unauthorized
use of servicemarks and trademarks allegedly owned by him. Hellwig is also
seeking a declaration that he owns the characters, Ultimate Warrior and
Warrior, which he portrayed as a performer under contract with us. Pursuant to
mandatory disclosure requirements filed with the court, Hellwig stated that he
is seeking approximately $10.0 million in compensatory damages and $5.0 million
in punitive damages, or such other amount as may be determined by the court or
jury. We have denied all liability and are vigorously defending this action. We
believe that Hellwig's claims are without merit. We have asserted counterclaims
against him for breach of his service contracts and seek rescission of an
agreement by which we transferred ownership of the servicemarks to him. In
addition, we filed a separate action in federal district court in Connecticut
on March 11, 1998, seeking a declaration that we own the characters, Warrior
and Ultimate Warrior, under both contract and copyright law. Hellwig's motion
to dismiss the federal case was denied, and we have since moved for summary
judgment in the federal proceeding. In the state court proceeding in Arizona,
on June 3, 1999, we moved for summary judgment on the two contract claims, the
defamation claim, and the other claims of the plaintiff. On September 7, 1999,
the Arizona court issued a summary judgment decision in our favor on Hellwig's
defamation claim. Hellwig had sought $100,000 in compensatory damages and $5.0
million in punitive damages on this claim. The Arizona court also granted our
motion for summary judgment on Hellwig's claim for $4.0 million in damages for
his failed business ventures. The court ruled Hellwig could not properly claim
damages for his failed business ventures because we made no contractual
commitment to fund his failed business ventures. Further, the court denied our
summary judgment motion with respect to Hellwig's breach of the 1996 contract
and at this time has not ruled upon our fourth summary judgment motion with
respect to Hellwig's breach of the 1992 contract. We intend to move for summary
judgment regarding Hellwig's royalty claims on our sale of videos and
merchandise. We believe that the ultimate liability resulting from this suit,
if any, will not have a material adverse effect on our financial condition or
results of operations.

On June 21, 1996, we filed an action against WCW and Turner Broadcasting
Systems, Inc. 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. We
claim that WCW, which contracted with two professional wrestlers who previously
had performed under contract for us in the character roles of Razor Ramon and
Diesel, misappropriated those characters in WCW's programming and
misrepresented the reason that these former World Wrestling Federation
professional wrestlers were appearing on WCW programming. During discovery
proceedings, which were completed on October 16, 1998, WCW was twice sanctioned
by the court for failure to comply with the court's discovery orders. We are
seeking damages in the form of revenue disgorgement from WCW and have submitted
expert reports supporting our claim for substantial money damages. WCW and TBS
have denied any liability.

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 described above. WCW alleges
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
our "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. We have denied any
liability and are vigorously defending against this action. We have filed a
counterclaim for abuse of process, which WCW has moved to dismiss. Discovery is
ongoing, and we intend to move for summary
judgment when discovery is concluded. We believe that WCW's claims are without
merit. WCW has yet to state a claim for damages. We believe that the ultimate
liability resulting from such proceeding, if any, will not have a material
adverse effect on our financial condition, results of operations or prospects.

In addition, on December 11, 1998, WCW filed a suit against us in state court
in Georgia alleging that we had breached an existing contract between us and
High Road Productions, Inc., a film distribution company, and thereby allegedly
interfered with a potential contract between High Road and WCW. WCW seeks

43
<PAGE>

unspecified money damages. We have denied all liability, believe that WCW's
claims are without merit, and are vigorously defending against the suit. On
April 2, 1999, we moved to dismiss and for judgment on the pleadings on the
grounds that WCW's complaint fails to state a claim for tortious interference
with business relations as a matter of Georgia law. A hearing on the motion was
held on July 14, 1999, and on August 6, 1999, the judge granted our motion and
dismissed WCW's case.

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 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. 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. We are 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 not yet filed an answer. 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 16, 1999, Nicole Bass, a professional wrestler affiliated with
us, filed an action in the United States District Court for the Eastern
District of New York alleging sexual harassment under New York law, civil
assault and intentional infliction of emotional distress. Bass seeks $20.0
million in compensatory damages and $100.0 million in punitive damages. We have
not been formally served with the complaint and have not conducted an extensive
investigation of the allegations in the 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.

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.

44
<PAGE>

MANAGEMENT

Directors and Executive Officers

The following sets forth, as of July 30, 1999, the names, ages and positions
of our directors and executive officers. Following the offering, our board of
directors intends to select at least two people who are not our employees to
serve as directors.

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Vincent K. McMahon...... 53 Chairman of the Board of Directors
Linda E. McMahon........ 50 President and Chief Executive Officer, Director
August J. Liguori....... 47 Executive Vice President and Chief Financial Officer, Director
</TABLE>

Set forth below is certain biographical information about our executive
officers and directors:

Vincent K. McMahon is our co-founder and has served as the Chairman of our
Board of Directors and the boards of directors of our predecessor entities
since 1980. From 1971 to 1979, Mr. McMahon worked at Capitol Wrestling
Corporation, an enterprise owned by his father, and assisted in the growth of
that company's television programming syndication business. Mr. McMahon and his
wife, Linda McMahon, founded our predecessor company in 1980 and in 1982
purchased Capitol Wrestling Corporation.

Linda E. McMahon is our co-founder, has served on our Board of Directors
since our inception, and has served as our President since May 1993 and Chief
Executive Officer since May 1997. In this role, Mrs. McMahon oversees our daily
business operations and the development of our technical and administrative
functions. Mrs. McMahon and her husband, Vincent McMahon, founded our
predecessor company in 1980 and in 1982 purchased Capitol Wrestling
Corporation.

August J. Liguori has served as our Executive Vice President, Chief Financial
Officer and Treasurer since he joined our company in September 1998. Mr.
Liguori has more than 25 years of experience as a senior manager and financial
executive for various entertainment companies. From 1996 to 1997, he served as
the vice president/finance and chief accounting officer of Marvel Entertainment
Group, Inc., and served as its executive vice president and chief financial
officer from 1997 to 1998. Marvel filed a voluntary petition for bankruptcy
protection under Chapter 11 of the federal bankruptcy laws in December 1996.
From 1986 to 1996 he was employed by Atari Corporation, serving as chief
financial officer and a member of the board of directors and executive
committee from 1991 to 1996.

Key Employees

The following sets forth, as of July 30, 1999, the names, ages and positions
of our key employees:

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
James K. Bell........... 44 Senior Vice President--Licensing and Merchandising
James E. Byrne.......... 41 Senior Vice President--Marketing
Ed Cohen................ 43 Senior Vice President--Event Booking and Operations
Kevin Dunn.............. 39 Executive Producer
Edward L. Kaufman....... 40 Senior Vice President and General Counsel
Shane McMahon........... 29 President--New Media
James W. Ross........... 47 Senior Vice President--Talent Relations
James A. Rothschild..... 38 Senior Vice President--North American Sales
Frank G. Serpe.......... 54 Senior Vice President--Finance and Chief Accounting Officer
</TABLE>

45
<PAGE>

Set forth below is certain biographical information about our key employees:

James K. Bell has served as our Senior Vice President of Licensing and
Merchandise since October 1996. Since he joined us in March 1995, he has also
served as our Vice President of Pay-Per-View and Television Marketing and our
Director of Domestic Licensing. Prior to joining us, Mr. Bell served as Vice
President of Marketing and Licensing for Rabbit Ears Productions from 1991 to
1996. Prior to that, he was Vice-President of Licensing and Merchandising for
the New Jersey Devils and was Director of Licensing and Marketing Worldwide for
Jim Henson Productions, Inc.

Ed Cohen has served as our Senior Vice President of Event Booking &
Operations since November 1994. He is responsible for routing, negotiating and
booking domestic and international arenas for our live events and oversees the
marketing of our live events. Previously, Mr. Cohen served as our Vice
President of Arena Booking from September 1987. Mr. Cohen has served in a
variety of capacities in our arena booking department, including event
coordinator, since he joined us in June 1982.

James E. Byrne has served as our Senior Vice President of Marketing since
September 1998. Prior to joining us, Mr. Byrne was the Vice President of
Marketing at The Carsey-Werner Company, LLC, a situation comedy program
supplier to the major networks from 1996 to 1998. Mr. Byrne served as the Vice
President of Marketing for Fruit of the Loom, Ltd. from 1990 to 1996. Prior to
that, he was involved in the marketing of consumer products for The Walt Disney
Company. Mr. Byrne has over 18 years of experience in consumer marketing and
publicity.

Kevin Dunn has served as our Executive Producer for both domestic and
international programming since 1993. Mr. Dunn is instrumental in the
production of our nine hours of weekly television programming and our monthly
pay-per-view events. In the ten years prior to his promotion to Executive
Producer in 1993, Mr. Dunn held various key positions in our television
production department.

Edward L. Kaufman has served as our Senior Vice President and General Counsel
since March 1998. Prior to that he served as our Vice President and General
Counsel from January 1997. Prior to joining us, Mr. Kaufman was the Director of
Business and Legal Affairs at Hanna Barbera, Inc. from July 1995 to December
1996. He previously served as the Director of Organization and Management
Resources (Labor Relations) for NBC, Inc. Mr. Kaufman has 15 years of legal
experience, including six years in private practice, since his graduation from
Stanford Law School in 1984.

Shane McMahon, the son of Vincent and Linda McMahon, represents the fourth
generation of his family to be involved in the sports entertainment business.
He has served as President of our new media operations since July 1998. He
served as an account executive in our sales department from April 1996 to July
1998 and as an associate producer in our television production department since
joining us in February 1994. Mr. McMahon is an important member of our cast of
performers and is also instrumental in the creation, development and promotion
of our form of entertainment.

James W. Ross has served as our Senior Vice President of Talent Relations and
Wrestling Administration since June 30, 1997. He is responsible for the overall
administration of our performer roster. Mr. Ross is also an important member of
our cast of performers, serving as the play-by-play ring announcer for our Raw
is War and pay-per-view events. Since October 1996, he has served as our Vice
President of Wrestling Promotions and an announcer for our events. Prior to
that he served as an announcer and creative consultant from 1993 through 1995.
Mr. Ross has over 25 years of experience in the sports entertainment business
and has held various key positions in the industry, including Vice President of
Broadcasting for World Championship Wrestling.

James Alan Rothschild has served as our Senior Vice President of North
American Sales since 1998. He currently leads our television advertising sales
division, which has offices located in New York, Chicago and Toronto, Canada.
Mr. Rothschild served as our Vice-President of Television Sales and Advertising
from 1996 to 1998 and Director of Television Sales since he joined us in 1994.
He has over 15 years of experience in advertising sales and marketing, working
for such other companies as AT&T Corporation and Maclean Hunter Publishing
Limited.

46
<PAGE>

Frank G. Serpe, CPA, has served as our Senior Vice President since May 1996
and as our Chief Accounting Officer since September 1998. Prior to that Mr.
Serpe served as our Vice President of Finance and Controller from the time that
he joined us in November 1986. Prior to joining us, Mr. Serpe worked for CBS,
Inc. where he held various positions, including Controller of CBS Software and
Director of Financial Reporting in the Consumer Magazine division of CBS, Inc.
Mr. Serpe has over 30 years of experience in accounting and finance, including
nine years in public accounting.

Composition of our Board and Committees

After the offering, our board of directors will have at least five members,
including at least two directors who are not employees. The board of directors
will have three committees: an audit committee, a compensation committee and an
executive committee.

The audit committee will consist of at least two independent directors who
will be selected by our board of directors following the offering. It will be
responsible for: choosing the firm to be appointed as independent accountants
to audit our financial statements and to perform services related to the audit;
reviewing the scope and results of the audit with those independent
accountants; reviewing with management and the independent accountants our
year-end operating results; evaluating the adequacy of our internal accounting
and control procedures; and reviewing the non-audit services to be performed by
our independent accountants, if any, and considering the effect of such
performance on their independence.

The compensation committee will consist of Vincent McMahon and at least two
independent directors. It will be responsible for the design, review,
recommendation and approval of compensation arrangements for directors and
executive officers, for the approval of such arrangements for our key
employees, and for the administration of our long-term incentive plan,
including the approval of grants under such plan to consultants and other non-
employees.

The executive committee will consist of Vincent McMahon, Linda McMahon and
August Liguori, with Vincent McMahon serving as chair. It will be responsible
for the management of our business and affairs, and may exercise all of the
powers and authority of the board of directors in connection therewith, to the
extent permitted by the Delaware General Corporation Law.

Outside Director Compensation

Each director of ours who is not our employee will be entitled to receive an
annual director's fee of $25,000. Each non-employee director will be entitled
to receive $500 for each meeting of our board of directors or a committee
thereof that he or she attends and reimbursement for his or her related
expenses. In addition, we intend to grant options in respect of 25,000 shares
to each non-employee director.

47
<PAGE>

Executive Compensation

The information set forth below describes the components of the total
compensation of our three executive officers for fiscal 1999, including our
chief executive officer. The principal components of the cash compensation of
these individuals has been their annual base salaries and bonuses.

Summary Compensation Table

<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation Awards
--------------------- -------------------------------
Securities
Fiscal Underlying All Other
Name and Principal Position Year Salary($) Bonus($) Options/SARs(#) Compensation($)
- --------------------------- ------ ---------- --------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Vincent K. McMahon,..... 1999 250,000 -- -- 46,557(2)
Chairman(1)
Linda E. McMahon,....... 1999 190,000 -- -- 1,549(4)
President and Chief
Executive Officer(3)
August J. Liguori,...... 1999 227,500 50,000 -- 1,615(4)
Executive Vice
President and Chief
Financial Officer(5)
</TABLE>
- --------
(1) Prior to the closing of the offering, Mr. McMahon will enter into an
employment agreement providing for an annual base salary of $1.0 million
and a performance bonus of up to 100% of base salary based on the
attainment of performance goals. See "--Employment Agreements." Since July
1, 1999, Mr. McMahon has been paid on a basis consistent with the terms of
the employment agreement. In fiscal 1999, as our stockholder, Mr. McMahon
received Subchapter S corporation distributions for income tax and other
purposes of approximately $6.5 million. On June 29, 1999, we distributed to
Mr. McMahon cash in the amount of $25.5 million out of our earned and
undistributed earnings, which have been fully taxed at the stockholder
level. In addition, we made a Subchapter S corporation distribution to Mr.
McMahon in the form of an unsecured, 5% interest-bearing note due April 10,
2000 in an amount equal to the estimated income taxes payable by him in
respect of our income for fiscal 1999 estimated to be $22.0 million and for
the interim period May 1, 1999 through September 30, 1999 estimated to be
$10.0 million. Our actual earnings through the date of the offering could
exceed those used in the calculation of the estimated federal and state
income taxes payable by our stockholder thus requiring additional
distributions in the form of cash or notes to our stockholder. See
"Reclassification of Stock and Prior Subchapter S Corporation Status."
(2) Includes payments on Mr. McMahon's behalf for additional medical insurance,
auto insurance and group term life insurance and the employer matching
contribution for our 401(k) plan.
(3) Prior to the closing of the offering, Mrs. McMahon will enter into an
employment agreement providing for an annual base salary of $750,000 and a
performance bonus of up to 100% of base salary based on the attainment of
performance goals. See "--Employment Agreements." Since July 1, 1999, Mrs.
McMahon has been paid on a basis consistent with the terms of the
employment agreement.
(4) Consists of the employer matching contribution for our 401(k) plan.
(5) Mr. Liguori commenced employment with us on September 1, 1998.

Employment Agreements

Prior to the closing of the offering, Vincent McMahon and Linda McMahon will
be employed by us under separate employment agreements. Mr. McMahon's agreement
is for a term of seven years, and Mrs. McMahon's agreement is for a term of
four years. The term of each agreement will automatically extend for successive
one-year periods unless either party gives notice of non-extension at least 12
months, but no more than 18 months, prior to the then-applicable expiration
date. Mr. McMahon's agreement provides for his employment as our Chairman at a
base salary of $1.0 million per year. Mrs. McMahon's agreement provides for her
employment as our President and Chief Executive Officer at a base salary of
$750,000 per year. Mr. and Mrs. McMahon are each entitled to an annual bonus of
up to 100% of base salary based upon the attainment of performance goals and to
participate in our various employee benefit plans and programs.

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<PAGE>

Under the employment agreements with Mr. and Mrs. McMahon, in the event we
terminate either executive's employment other than for cause, death or
disability, or if the executive terminates his or her employment for good
reason, or if the executive terminates his or her employment for any reason
within the 90-day period beginning six months after the occurrence of a change
in control, we are obligated to pay to the executive compensation and benefits
that are accrued but unpaid at the date of termination, plus a lump sum cash
amount equal to the amount of the executive's base salary and bonus for the
greater of the balance of the contract term or two years and to continue his or
her benefit plan participation for such period. If Mr. or Mrs. McMahon dies
during the term of his or her agreement, we are obligated to pay to the
executive's estate compensation and benefits that are accrued but unpaid as of
the date of the executive's death, plus a lump sum amount equal to the amount
of the executive's base salary and bonus for two years. If we terminate Mr. or
Mrs. McMahon's employment for cause, if either executive resigns without good
reason, or if either executive's employment is terminated due to the
executive's disability, we are obligated to pay to the executive compensation
and benefits accrued but unpaid as of the date of termination. If either Mr. or
Mrs. McMahon becomes subject to any change in control excise taxes, we will be
obligated to provide such executive a "gross-up" bonus sufficient, on an after-
tax basis, to cover any such excise taxes. In addition, the employment
agreements of Mr. and Mrs. McMahon contain covenants intended to protect our
confidential information and trade secrets as well as non-compete and non-
solicitation covenants that, among other things, prohibit each executive from
competing with us in professional wrestling and our other core businesses
during employment and for a period of one year after termination other than a
resignation within a period of time following a change in control, as described
above.

In August 1998, we entered into an employment agreement with Mr. Liguori,
which expires on August 31, 2001. Pursuant to his agreement, Mr. Liguori
received a signing bonus of $50,000 and is entitled to:

(1) an annual base salary of $350,000;

(2) bonus payments of at least $175,000 on or before June 1 of each year
during the term of his agreement;

(3) bonus payments of at least $150,000 on or before September 1, 1999,
December 1, 1999, March 1, 2000, September 1, 2000, December 1, 2000
and March 1, 2001; and

(4) a payment on or before August 31, 2001 of $475,000 less any
discretionary bonuses previously paid by us to Mr. Liguori and less any
contributions made by us on Mr. Liguori's behalf to any 401(k) or
profit sharing plan.

In addition, we have agreed to reimburse Mr. Liguori for any reasonable and
necessary expenses incurred in the performance of his duties. We may terminate
the agreement at any time for cause. We may also terminate the agreement at any
time in our discretion, provided that we make severance payments to Mr.
Liguori, which, if such termination occurs on or following September 1, 1999,
shall be in the form of (a) a payment in an amount equal to $83,333 multiplied
by the number of months Mr. Liguori was actually employed by us, less amounts
previously paid by us to Mr. Liguori and (b) six months severance pay at the
rate of $29,166 per month, which shall cease if Mr. Liguori secures other
employment during such period. In the event of Mr. Liguori's death during the
term of the agreement, we have agreed to pay Mr. Liguori's heirs an amount
equal to $83,333 multiplied by the number of months Mr. Liguori was actually
employed by us, less any amounts previously paid by us to Mr. Liguori. Finally,
Mr. Liguori's agreement provides that, in the event that any person other than
a member of the family of or heir of Mr. McMahon or Mrs. McMahon acquires
control of a majority of our assets, Mr. Liguori will be entitled to receive
$3.0 million, less any amounts previously paid to him by us. In addition, our
agreement with Mr. Liguori contains a covenant to protect our confidential
information and a covenant that prohibits Mr. Liguori from competing with us in
the professional wrestling business during employment and for one year after
termination.

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<PAGE>

Long-Term Incentive Plan

Upon the closing of the offering, our 1999 Long-Term Incentive Plan, will
become effective. It was established to assist us in attracting and retaining
key employees, directors, consultants and performers and to act as an incentive
for those individuals to help us achieve our corporate objectives. An initial
reserve of 10,000,050 shares of Class A common stock has been authorized for
issuance under the 1999 Long-Term Incentive Plan. We expect to file a
registration statement on Form S-8 with respect to the 1999 Long-Term Incentive
Plan after the offering.

The compensation committee of the board of directors will administer the 1999
Long-Term Incentive Plan and will have sole discretionary authority to
interpret the 1999 Long-Term Incentive Plan, to establish and modify the rules
for the 1999 Long-Term Incentive Plan, to impose conditions or restrictions on
awards granted under the 1999 Long-Term Incentive Plan and to take any other
steps in connection with the 1999 Long-Term Incentive Plan that the committee
believes are necessary or advisable.

The committee may grant awards under the 1999 Long-Term Incentive Plan in the
form of stock options, stock appreciation rights, restricted stock awards,
performance awards and other stock-based awards to designated key employees,
directors, consultants and performers in its discretion. Each participant will
be required to execute an award agreement with us that will set forth the
specific terms and conditions of his award, including the term and vesting
schedule, if any, of the award. Except under certain circumstances involving a
change in our capital structure, during any calendar year, no participant may
be granted awards with respect to more than 3.0% of the fully-diluted common
stock outstanding.

The committee may designate options granted under the 1999 Long-Term
Incentive Plan as incentive stock options or non-qualified stock options. With
respect to any stock option granted under the 1999 Long-Term Incentive Plan,
the committee will have discretion to set the exercise price for the shares of
Class A common stock that may be purchased upon the exercise of that option,
except that the exercise price of incentive stock options must generally not be
less than the fair market value of the underlying shares. The 1999 Long-Term
Incentive Plan provides that fair market value is to be determined according to
the closing price per share of the Class A common stock on the Nasdaq National
Market, or other national securities exchange on which the Class A common stock
may be listed, on the date of the grant. In addition, the exercise price of any
incentive stock option granted to any participant who owns more than 10% of the
total combined voting power of all classes of our stock must be at least 110%
of the fair market value of a share of Class A common stock on the date of the
grant and the term of such stock option may not be more than five years. There
is a $100,000 limit on the value (based on the grant date value) of an
employee's incentive stock options that may become vested and exercisable for
the first time in any calendar year.

The 1999 Long-Term Incentive Plan contains an accelerated ownership feature.
This feature, which will be implemented only with the approval of the
committee, is intended to encourage participants to exercise options prior to
their expiration and to retain the shares so acquired, in furtherance of our
policy of encouraging stock ownership by our key employees, directors,
consultants and performers. Under the accelerated ownership feature,
participants who tender previously owned shares or have shares withheld to pay
all or a portion of the exercise price of vested stock options and/or to cover
any tax liability associated with the exercise of vested stock options may be
eligible, in the discretion of the committee, to receive a new option covering
the same number of shares as are tendered or withheld for such purposes. The
market value on the date of grant of an accelerated option establishes the
exercise price of such option, and such option will have a term equal to the
remaining term of the original option.

Stock appreciation rights may be granted by the committee to a participant
either separate from or in tandem with non-qualified stock options or incentive
stock options. Stock appreciation rights may be granted at the time of the
stock option grant or, with respect to non-qualified stock options, at any time
prior to the exercise of the stock option. A stock appreciation right entitles
the participant to receive, upon its exercise, a

50
<PAGE>

payment equal to the product of (1) the excess of the fair market value of a
share of Class A common stock on the exercise date over the stock appreciation
rights exercise price, and (2) the number of shares of Class A common stock
with respect to which the stock appreciation right is exercised.

The exercise price of a stock appreciation right is determined by the
committee, but in the case of stock appreciation rights granted in tandem with
stock options, may not be less than the exercise price of the related stock
option. Upon exercise of a stock appreciation right, payment will be made in
cash or shares of Class A common stock, or a combination thereof, as determined
in the discretion of the committee.

Subject to the committee's authority to permit the accelerated exercise of an
option granted under the 1999 Long-Term Incentive Plan or to extend the time
during which an option granted under the 1999 Long-Term Incentive Plan will be
exercisable, an option granted under the 1999 Long-Term Incentive Plan will
expire on the first to occur of: the expiration of the option as provided in
the related award agreement, the termination of the award upon the lapse of a
specific period of time following the termination of the participant's services
with us, depending on the reasons for the termination, or ten years from the
date of grant. Under the employment agreements with Mr. and Mrs. McMahon, if we
terminate either executive's employment without cause, if the executive
terminates his or her employment for good reason, if the executive terminates
his or her employment for any reason within the 90 day period beginning six
months after the occurrence of a change in control, or if the executive dies,
any stock option or other equity based award granted to the executive prior to
the date of termination of employment will become fully vested and exercisable
as of the date of termination and shall remain exercisable for three years
thereafter.

The committee may also award restricted shares of Class A common stock to our
key employees, directors, consultants and performers under the 1999 Long-Term
Incentive Plan based on performance standards, periods of service or other
criteria that the committee establishes. Restricted shares awarded under the
1999 Long-Term Incentive Plan are subject to the terms and conditions contained
in the 1999 Long-Term Incentive Plan and the award agreements executed by the
participants and may not be transferred, other than by will or the laws of
descent and distribution or to an inter vivos trust of which the participant is
treated as the owner, pledged or sold prior to the lapse of those restrictions.

The committee may also grant to our key employees, directors, consultants and
performers performance awards consisting of the right to receive a payment,
which is measured by the fair market value of a specific number of shares of
Class A common stock or the increase in that fair market value during a
specified period, called the "award period," or a cash award the amount of
which is based on the extent to which predetermined performance targets are
met. The performance targets may be related to our performance or the
individual performance of the participant or both and will be set by the
committee at its discretion.

The committee is authorized to grant any other cash awards, Class A common
stock awards or other types of awards which are valued in whole or in part by
reference to the value of Class A common stock. The terms and conditions of
such awards and the participants eligible for such awards will be determined by
the committee at its discretion.

Unless otherwise provided by the committee in the applicable award agreement,
in the event of a change in control, as defined in the 1999 Long-Term Incentive
Plan, stock options and stock appreciation rights immediately become
exercisable, the restrictions on all restricted shares lapse and all
performance awards and other awards immediately become payable.

Compensation Committee Interlocks and Insider Participation

No interlocking relationship exists between our board of directors or
compensation committee and the board of directors or compensation committee of
any other company, nor has any such interlocking relationship existed in the
past.

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<PAGE>

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Vincent McMahon is the controlling stockholder of Stephanie Music Publishing,
Inc., which holds rights to various musical compositions utilized by us in
connection with our events and promotions, and World Wrestling Federation
Entertainment Canada, Inc., which, among other things, promotes our live events
in Canada. Prior to the issuance of shares in the offering, the outstanding
capital stock of Stephanie Music Publishing, Inc. and World Wrestling
Federation Entertainment Canada, Inc. will be contributed to World Wrestling
Federation Entertainment, Inc. Mr. McMahon will receive no consideration in
connection with this transaction.

Mr. McMahon is the sole stockholder of Shane Productions, Inc., an affiliated
company which is not included in the combined financial statements and which
holds a 21% partnership interest in Titan/Shane Partnership, in which we hold a
79% interest. Mr. McMahon is also the sole stockholder of Shane Distribution
Co., an affiliated company which is not included in the combined financial
statements. We had a receivable from Shane Distribution Co. in the amount of
$377,000 as of April 30, 1999, which arose in the ordinary course of business.

Linda McMahon is the sole stockholder of Travel Strategies, Inc., which
generally handles the business-related travel arrangements of our employees and
performers. In addition to paying Travel Strategies, Inc. on a per transaction
basis at market rates for each transaction for the travel planning services
that company provides to us, we pay a fee to Travel Strategies, Inc. for its
overall management of our travel planning requirements, which amounted to
approximately $123,000 in fiscal 1999. We believe that the terms of our
business arrangement with Travel Strategies, Inc. are fair and comparable to
those we would have obtained from an unrelated third party through arms-length
transactions. We had a receivable from the travel agency of $205,000 as of
April 30, 1999, which arose in the ordinary course of business.

On June 29, 1999, we made a Subchapter S corporation distribution to Mr.
McMahon, our stockholder, in the form of cash in the amount of $25.5 million
and an unsecured note in the principal amount of $32.0 million bearing interest
at the rate of 5% per annum and payable on April 10, 2000, the principal of
which will be paid periodically as estimated income tax payments become due.
This note reflects the amount of estimated federal and state income taxes
payable by Mr. McMahon with respect to our earnings for fiscal 1999 and for the
interim period from May 1, 1999 through September 30, 1999. Our actual earnings
through the date of the offering could exceed those used in the calculation of
the estimated federal and state income taxes payable by our stockholder thus
requiring additional distributions in the form of cash or notes to our
stockholder.

We have entered into a tax indemnification agreement with Mr. McMahon. The
tax indemnification agreement provides for, among other things, the
indemnification of us by our S corporation stockholder for any federal and
state income taxes, including interest and penalties, that we incur if, for any
reason, we are deemed to be a Subchapter C corporation during any period for
which we reported our taxable income as a Subchapter S corporation, or if an
adjustment to one or more of our tax returns for a C taxable year results in a
net increase in our taxable income in a C taxable year and a net decrease in
our taxable income in an S taxable year. In addition, we have agreed to
indemnify the stockholder for any federal and state income taxes, including
interest and penalties, that Mr. McMahon or the trust may incur if an
adjustment to one or more of our tax returns for an S taxable year results in a
net increase in our taxable income in an S taxable year and a net decrease in
our taxable income in a C taxable year. The tax indemnification obligations are
limited to the aggregate amount of tax distributions to the stockholder for all
the periods since fiscal 1995, for which we are subject to a tax audit.
Purchasers of Class A common stock in the offering will not be parties to the
tax indemnification agreement.

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<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth, as of September 1, 1999, certain information
with respect to the beneficial ownership of our common stock and as adjusted to
reflect our sale of Class A common stock in the offering by:

(1) each person known by us to beneficially own more than five percent of
our outstanding common stock;

(2) each of our directors;

(3) each executive officer named in the Summary Compensation Table; and

(4) all of our directors and executive officers as a group.

Mr. McMahon and the trust that he established for the benefit of his children
are the sole owners of our common stock and upon the completion of the
reclassification will own a substantial majority of the Class B common stock.
Prior to the offering, no shares of Class A common stock were issued and
outstanding. Beneficial ownership is determined in accordance with the rules of
the Securities and Exchange Commission. The address of each of the persons in
this table is c/o World Wrestling Federation Entertainment, Inc., 1241 East
Main Street, Stamford, Connecticut 06902.

<TABLE>
<CAPTION>
Amount and Nature Voting Voting
Name of Beneficial Percent of Power Before Power After
of Stockholder Ownership Class the Offering the Offering
-------------- ----------------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Vincent K. McMahon(1)... 56,667,000 100% 100% 97.3%(2)
Vincent K. McMahon
Irrevocable Deed of
Trust, dated June
30, 1999............... 17,000,100 30%
Linda E. McMahon........ 1.0%(2)
August J. Liguori....... * (3)
All executive officers
and directors as a
group (three
persons)(1)............ 56,667,000 100% 100% 98.3%
</TABLE>
- --------
* Less than one percent.

(1) Includes 17,000,100 shares of Class B common stock held under the Vincent
K. McMahon Irrevocable Deed of Trust dated June 30, 1999 that benefits Mr.
McMahon's children and for which Mr. McMahon serves as the trustee.
(2) Reflects Mr. McMahon's transfer of 566,670 shares of Class B common stock
to Linda McMahon as of the closing date of the offering.
(3) As of the closing of the offering, Mr. Liguori will be granted options to
acquire 300,000 shares of Class A common stock under our long-term
incentive plan at an exercise price equal to the initial public offering
price.

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<PAGE>

DESCRIPTION OF CAPITAL STOCK

At the time of the offering, our authorized capital stock will consist of
180,000,000 shares of Class A and 60,000,000 shares of Class B common stock,
$.01 par value, and 20,000,000 shares of preferred stock, $.01 par value.
Immediately after giving effect to the reclassification and the offering, there
will be 10,000,000 shares of Class A common stock outstanding, or 11,500,000
shares of Class A common stock if the underwriters' over-allotment option is
exercised in full, and 56,667,000 shares of Class B common stock outstanding,
which will be held by Vincent McMahon, the trust that he created for his
children, Linda McMahon, or any combination of these holders.

Common Stock

Voting Rights

Each holder of shares of Class A common stock is entitled to one vote per
share and each holder of shares of Class B common stock is entitled to ten
votes per share on all matters to be voted on by stockholders. Holders of
shares of our common stock are not entitled to cumulate votes in the election
of directors. Immediately following the offering, Mr. McMahon will retain, by
virtue of his beneficial ownership of a substantial majority of outstanding
shares of Class B common stock, effective control of the company through his
beneficial ownership of approximately 97.3% of the combined voting power of the
outstanding common stock, or 97.0% if the underwriters' over-allotment option
is exercised in full.

Directors may be removed with or without cause by the holders of the common
stock. A vacancy on the board created by the removal or resignation of a
director or by the expansion of the authorized number of directors may be
filled by the directors then in office.

The holders of Class A common stock and Class B common stock vote together as
a single class on all matters on which stockholders may vote, except when class
voting is required by applicable law.

Dividend Rights

The holders of shares of Class A and Class B common stock are entitled to
dividends and other distributions if, as and when declared by our board of
directors out of assets legally available therefor, subject to the rights of
any holder of shares of preferred stock, any restrictions set forth in our
credit facilities and any restrictions set forth in any of our other
indebtedness outstanding from time to time. See "Dividend Policy" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources." The holders of the Class A and
Class B common stock are entitled to equal per share dividends and
distributions.

Other Rights

Upon our liquidation, dissolution or winding up, the holders of the shares of
Class A and Class B common stock would be entitled to share pro rata in the
distribution of all of our assets remaining after satisfaction of all our
liabilities and the payment of the liquidation preference of any outstanding
preferred stock. The holders of the Class A and Class B common stock have no
preemptive or other subscription rights to purchase our capital stock. No share
of our common stock issued in or outstanding prior to the offering is subject
to any further call or assessment.

If, at any time, any shares of Class B common stock are beneficially owned by
any person other than Vincent McMahon, Linda McMahon, any descendent of either
of them, any entity which is wholly owned and is controlled by any combination
of such persons or any trust all the beneficiaries of which are any combination
of such persons, each of those shares will automatically convert into shares of
Class A common stock. In addition, the Class B common stock is fully
convertible into Class A common stock, on a one-for-one basis, at any time at
the option of the holder.

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<PAGE>

Preferred Stock

The board of directors has the authority, without further action by the
stockholders, to issue up to 20,000,000 shares of preferred stock in one or
more series and to fix the number of shares, designations, voting rights,
preferences and optional and other special rights and the restrictions or
qualifications thereof. The rights, preferences, privileges and powers of each
series of preferred stock may differ with respect to dividends, amounts payable
on liquidation, voting, conversion, redemption, sinking funds and other
matters. The issuance of shares of preferred stock could decrease the amount of
earnings and assets available for distribution to holders of shares of our
common stock and could adversely affect the rights and powers, including voting
rights, of holders of shares of our common stock. The existence of authorized
and undesignated shares of preferred stock may also have an adverse effect on
the market price of the Class A common stock. In addition, the issuance of any
shares of preferred stock could have the effect of delaying, deferring or
preventing a change of control of us. No shares of preferred stock are
outstanding, and we have no current intention to issue any shares of preferred
stock.

Section 203 of the Delaware General Corporation Law

We are a Delaware corporation that will be subject to Section 203 of the DGCL
after the offering. Section 203 provides in general that a stockholder
acquiring more than 15% of the outstanding voting stock of a corporation
subject to Section 203 but less than 85% of such stock may not engage in a
Business Combination, as defined in Section 203, with the corporation for a
period of three years from the date on which that stockholder became an
Interested Stockholder, as defined in Section 203, unless (1) prior to such
date the corporation's board of directors approved either the Business
Combination or the transaction in which the stockholder became an Interested
Stockholder or (2) the Business Combination is approved by the corporation's
board of directors and authorized by the holders of at least 66 2/3% of the
outstanding voting stock of the corporation not owned by the Interested
Stockholder. A "Business Combination" includes a merger, asset sale or other
transaction resulting in a financial benefit to a stockholder. Section 203
could prohibit or delay a merger or other takeover or change of control
transaction with respect to us and, accordingly, may discourage actions that
could result in a premium over the market price for the shares held by the
public stockholders.

Transfer Agent and Registrar

The transfer agent and registrar for our Class A common stock will be
American Stock Transfer & Trust Company.

Listing

Our Class A common stock has been approved for quotation on the Nasdaq
National Market under the symbol "WWFE."

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<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the offering, there has not been any public market for our Class A
common stock, and no prediction can be made as to the effect, if any, that
market sales of shares of Class A common stock or the availability of shares of
Class A common stock for sale will have on the market price of the Class A
common stock prevailing from time to time. Nevertheless, sales of substantial
amounts of Class A common stock in the public market, or the perception that
such sales could occur, could adversely affect the market price of the Class A
common stock and could impair our future ability to raise capital through the
sale of equity securities. See "Risk Factors--There has been no prior market
for our Class A common stock, and the market price of the shares will
fluctuate."

Upon consummation of the offering, we will have 10,000,000 shares of Class A
common stock issued and outstanding. All of the 10,000,000 shares of Class A
common stock to be sold in the offering and any shares sold upon exercise of
the underwriters' over-allotment option will be freely tradable without
restrictions or further registration under the Securities Act, except for any
shares purchased by an "affiliate" of ours as that term is defined in Rule 144
under the Securities Act, which will be subject to the resale limitations of
Rule 144. After completion of the offering, we will have 56,667,000 shares of
Class B common stock outstanding that are "restricted securities" as that term
is defined in Rule 144. Restricted securities may be sold in the public markets
only if that sale is registered or if that sale qualifies for an exemption from
registration under the Securities Act. Sales of restricted securities in the
public market, or the availability of such shares for sale, could have an
adverse effect on the price of the Class A common stock. See "Risk Factors--
There has been no prior market for our Class A common stock and the market
price of the shares will fluctuate" and "Risk Factors--A substantial number of
shares will be eligible for future sale by our current stockholder, and the
sale of those shares could adversely affect our stock price."

In general, under Rule 144, as currently in effect, a person, or persons
whose shares are required to be aggregated, who has beneficially owned shares
for at least one year is entitled to sell, within any three-month period
commencing 90 days after the date of this prospectus a number of shares that
does not exceed the greater of (1) one percent of the number of shares of the
Class A common stock then outstanding or (2) the average weekly reported
trading volume of the Class A common stock during the four calendar weeks
preceding the required filing of a Form 144 with respect to such sale. Sales
under Rule 144 are generally subject to manner of sale provisions and notice
requirements and to the availability of current public information about us.
Under Rule 144(k), a person who is not deemed to have been an affiliate of us
at any time during the 90 days preceding a sale and who has beneficially owned
the shares proposed to be sold for at least two years is entitled to sell such
shares without having to comply with the manner of sale, public information,
volume limitation or notice provisions of Rule 144.

We, our directors, executive officers, some of our other officers and our
stockholder have agreed not to issue, sell, offer or agree to sell, grant any
option for the sale of, pledge, make any short sale of, maintain any short
position with respect to, establish or maintain a "put equivalent position",
within the meaning of Rule 16a-1(h) under the Securities Exchange Act, with
respect to, enter into any swap, derivative transaction or other arrangement
that transfers to another, in whole or in part, any of the economic
consequences of ownership or otherwise dispose of, any Class A common stock, or
any securities convertible into, exercisable for or exchangeable for Class A
common stock, or interest therein of us for a period of 180 days after the date
of this prospectus without the prior written consent of Bear, Stearns & Co.
Inc., except that we may issue, and grant options to purchase, shares of Class
A common stock under our 1999 Long-Term Incentive Plan.

We intend to file a registration statement on Form S-8 under the Securities
Act to register all shares of Class A common stock subject to outstanding stock
options and Class A common stock issuable under our 1999 Long-Term Incentive
Plan.

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<PAGE>

UNITED STATES FEDERAL TAX CONSIDERATIONS TO NON-UNITED STATES HOLDERS

The following summary describes material United States federal income and
estate tax consequences that may be relevant to the purchase, ownership and
disposition of our Class A common stock by a Non-United States Holder. A Non-
United States Holder is any person who is, for United States federal income tax
purposes, a foreign corporation, a non-resident alien individual, a foreign
partnership or a foreign estate or trust or any other foreign entity. This
discussion does not address all aspects of United States federal income and
estate taxes and does not deal with foreign, state and local consequences that
may be relevant to Non-United States Holders in light of their personal
circumstances. Furthermore, this discussion is based on provisions of the
Internal Revenue Code of 1986, existing and proposed regulations promulgated
thereunder, and administrative and judicial interpretations thereof, as of the
date hereof, all of which are subject to change. Each prospective purchaser of
Class A common stock is advised to consult a tax advisor with respect to
current and possible future consequences of acquiring, holding and disposing of
common stock as well as any tax consequences that may arise under the laws of
any United States state, municipality or other taxing jurisdiction.

Dividends

We do not anticipate paying cash dividends on our capital stock in the
foreseeable future. See "Dividend Policy." In the event, however, that
dividends are paid on shares of our Class A common stock, dividends paid to a
Non-United States Holder of our Class A common stock generally will be subject
to withholding of United States federal income tax at a 30% rate or such lower
rate as may be specified by an applicable income tax treaty. However, assuming
certain certification and disclosure requirements are met, dividends that are
effectively connected with the conduct of a trade or business by a Non-United
States Holder within the United States and, where a tax treaty applies, are
attributable to a United States permanent establishment of the Non-United
States Holder, are not subject to the withholding tax, but instead are subject
to United States federal income tax on a net income basis at the applicable
graduated individual or corporate rates. Any such effectively connected
dividends received by a foreign corporation may be subject to an additional
"branch profits tax" at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty.

In October 1997, the IRS issued final regulations relating to the
withholding, backup withholding and information reporting with respect to
payments made to Non-United States Holders. The new regulations generally apply
to payments made after December 31, 2000, subject to certain transition rules.

Until December 31, 2000, dividends paid to an address outside the United
States are presumed to be paid to a resident of such country, unless the payer
has knowledge to the contrary, for purposes of the withholding tax discussed
above and, under the current interpretation of United States Treasury
regulations, for purposes of determining the applicability of a tax treaty
rate. To avoid back-up withholding for dividends paid after December 31, 2000,
a Non-United States Holder will be required to satisfy certain certification
and other requirements which may differ from current requirements. Special
rules will apply to dividend payments made after December 31, 2000 to foreign
intermediaries, foreign partnerships, United States or foreign wholly-owned
entities that are disregarded for United States federal income tax purposes,
and entities that are treated as fiscally transparent in the United States, the
applicable income tax treaty jurisdiction or both. In addition, United States
tax legislation, effective August 4, 1997, denies income tax treaty benefits to
foreigners receiving income derived through a partnership or other fiscally
transparent entity in certain circumstances.

A Non-United States Holder of our Class A common stock eligible for a reduced
rate of United States withholding tax pursuant to an income tax treaty may
obtain a refund of any excess amounts withheld by filing an appropriate claim
for refund with the Internal Revenue Service.

57
<PAGE>

Gain on Disposition of Class A Common Stock

A Non-United States Holder generally will not be subject to United States
federal income tax with respect to gain recognized on a sale or other
disposition of our Class A common stock unless:

. the gain is effectively connected with a trade or business of the
Non-United States Holder in the United States and, where a tax
treaty applies, is attributable to a United States permanent
establishment of the Non-United States Holder,

. in the case of a Non-United States Holder who is an individual and
holds Class A common stock as a capital asset, such holder is
present in the United States for 183 or more days in the taxable
year of the sale or other disposition and certain other conditions
are met,

. the Non-United States Holder is subject to tax pursuant to the
provisions of the United States tax law applicable to certain United
States expatriates, or

. we are or have been a "United States real property holding
corporation" for United States federal income tax purposes, and the
Non-United States Holder owned, directly or pursuant to certain
attribution rules, more than 5% of our common stock at any time
within the shorter of the five-year period preceding such
disposition or such Non-United States Holder's holding period. We
believe we are not, and we do not anticipate becoming, a "United
States real property holding corporation" for United States federal
income tax purposes.

An individual Non-United States Holder described in the first point above
will be subject to tax on the net gain from the sale under regular graduated
United States federal income tax rates. An individual Non-United States Holder
described in the second point above will be subject to a flat 30% tax on the
gain derived from the sale, which may be offset by United States-source capital
losses, even though the individual is not considered a resident of the United
States. If a Non-United States Holder that is a foreign corporation is
described in the first point above, it will be subject to tax on its net gain
under regular graduated United States federal income tax rates and, in
addition, may be subject to the branch profits tax equal to 30% of its
effectively connected earnings and profits within the meaning of the Code for
the year, as adjusted for certain items, unless it qualifies for a lower rate
under an applicable income tax treaty.

Federal Estate Tax

Class A common stock owned or treated as owned by an individual Non-United
States Holder at the time of death will be included in such holder's gross
estate for United States federal estate tax purposes, unless an applicable
estate tax treaty provides otherwise.

Information Reporting and Backup Withholding

We must report annually to the IRS and to each Non-United States Holder the
amount of dividends paid to such Non-United States Holder and the tax withheld
with respect to such dividends, regardless of whether withholding was required.
Copies of the information returns reporting such dividends and withholding may
also be made available to the tax authorities in the country in which the Non-
United States Holder resides under the provisions of an applicable income tax
treaty.

Until December 31, 2000, backup withholding generally will not apply to
dividends paid to a Non-United States Holder at an address outside the United
States, unless the payer has knowledge that the payee is a United States
person. With respect to dividends paid after December 31, 2000, however, a Non-
United States Holder will be subject to back-up withholding unless applicable
certification requirements are met to establish non-United States status.

58
<PAGE>

Payment of the proceeds of a sale of common stock within the United States or
conducted through certain United States-related financial intermediaries is
subject to:

. information reporting; and

. backup withholding, other than payments made before January 1, 2000
by or through certain United States-related financial
intermediaries, unless the beneficial owner certifies under
penalties of perjury that it is a Non-United States Holder, and the
payor does not have actual knowledge that the beneficial owner is a
United States person, or the holder otherwise establishes an
exemption.

Any amounts withheld under the backup withholding rules may be allowed as a
refund or a credit against a holder's United States federal income tax
liability provided the required information is furnished to the IRS.

59
<PAGE>

PLAN OF DISTRIBUTION

The United States underwriters named below have severally agreed, subject to
the terms and conditions of the United States underwriting agreement, to
purchase from us the number of shares of Class A common stock set forth
opposite their names below:

<TABLE>
<CAPTION>
United States Underwriters Number of Shares
-------------------------- ----------------
<S> <C>
Bear, Stearns & Co. Inc................................... 1,979,000
Credit Suisse First Boston Corporation.................... 1,979,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................................... 1,979,000
Wit Capital Corporation................................... 313,000
Allen & Company Incorporated.............................. 100,000
Banc of America Securities LLC............................ 100,000
Deutsche Bank Securities Inc.............................. 100,000
Donaldson, Lufkin & Jenrette Securities Corporation....... 100,000
A.G. Edwards & Sons, Inc.................................. 100,000
Hambrecht & Quist LLC..................................... 100,000
ING Barings LLC........................................... 100,000
Prudential Securities Incorporated........................ 100,000
SG Cowen Securities Corporation........................... 100,000
Wasserstein Perella Securities, Inc....................... 100,000
Advest, Inc............................................... 50,000
Axiom Partners Inc........................................ 50,000
Blackford Securities Corp................................. 50,000
J.C. Bradford & Co........................................ 50,000
Joseph Charles & Associates, Inc.......................... 50,000
Chatsworth Securities LLC................................. 50,000
Gabelli & Company, Inc.................................... 50,000
Gaines, Berland Inc....................................... 50,000
Jefferies & Company....................................... 50,000
Josephthal & Co. Inc...................................... 50,000
Neuberger & Berman........................................ 50,000
Raymond James & Associates, Inc........................... 50,000
Sanders Morris Mundy...................................... 50,000
Tucker Anthony Incorporated............................... 50,000
Wachovia Securities, Inc.................................. 50,000
---------
Total................................................... 8,000,000
=========

The international managers named below have severally agreed, subject to the
terms and conditions of the international underwriting agreement, to purchase
from us the number of shares of Class A common stock set forth opposite their
names below:

<CAPTION>
International Managers Number of Shares
---------------------- ----------------
<S> <C>
Bear, Stearns International Limited....................... 667,000
Credit Suisse First Boston (Europe) Limited............... 666,500
Merrill Lynch International............................... 666,500
---------
Total................................................... 2,000,000
=========
</TABLE>

Subject to the terms and conditions of the underwriting agreements, the
United States underwriters and the international managers have agreed to
purchase all of the shares of Class A common stock being sold pursuant to the
underwriting agreements if any are purchased, excluding shares covered by the
over-allotment option.

60
<PAGE>

The United States underwriters and the international managers have advised us
that the United States underwriters and the international managers propose to
offer our Class A common stock to the public initially at the public offering
price set forth on the cover page of this prospectus and to certain dealers at
such price less a concession of not more than $0.72 per share. Additionally,
the United States underwriters and the international managers may allow, and
such dealers may re-allow, a discount of not more than $0.10 per share on sales
to certain other dealers. After the initial public offering, the public
offering price and other selling terms may be changed by the United States
underwriters and the international managers. The United States underwriters and
the international managers do not intend to confirm sales to any accounts over
which they exercise discretionary authority.

We have granted to the United States underwriters and the international
managers an option to purchase an aggregate of up to 1,500,000 additional
shares of our Class A common stock at the initial public offering price, less
the underwriting discount set forth on the cover page of this prospectus,
solely to cover over-allotments, if any. This option may be exercised in whole
or in part at any time within 30 days after the date of this prospectus. To the
extent that the United States underwriters and the international managers
exercise this option, each United States underwriter and international manager
will have an obligation, subject to certain conditions, to purchase a number of
shares of our Class A common stock proportionate to such United States
underwriter's or international manager's purchase obligation set forth in the
foregoing tables.

The offering of the shares is made for delivery, when, as and if accepted by
the United States underwriters and the international managers and subject to
prior sale and to withdrawal, cancellation or modification of the offering
without notice. The United States underwriters and the international managers
reserve the right to reject an order for the purchase of shares in whole or in
part.

The international managers and the United States underwriters have entered
into an intersyndicate agreement that provides for the coordination of their
activities. Pursuant to the intersyndicate agreement, the international
managers and the United States underwriters are permitted to sell shares of
Class A common stock to each other for purposes of resale at the public
offering price, less an amount not greater than the selling concession. Under
the terms of the intersyndicate agreement, the United States underwriters and
any dealer to whom they sell shares of Class A common stock will not offer to
sell or sell shares of Class A common stock to persons who are non-United
States or non-Canadian persons or to persons they believe intend to resell to
persons who are non-United States or non-Canadian persons, and the
international managers and any dealer to whom they sell shares of Class A
common stock will not offer to sell or sell shares of Class A common stock to
United States persons or to Canadian persons or to persons they believe intend
to resell to United States persons or to Canadian persons, except in the case
of transactions pursuant to the intersyndicate agreement.

Pursuant to the intersyndicate agreement between the United States
underwriters and international managers, sales may be made between the United
States underwriters and international managers of any number of shares of Class
A common stock as may be mutually agreed. The per share price of any shares so
sold shall be the public offering price set forth on the cover page hereof in
United States dollars, less an amount not greater than the per share amount of
the concession to dealers set forth above.

Pursuant to the intersyndicate agreement between the United States
underwriters and international managers, each United States underwriter has
represented that it has not offered or sold, and has agreed not to offer or
sell, any shares of Class A common stock, directly or indirectly, in any
province or territory of Canada in contravention of the securities laws thereof
and has represented that any offer of shares of Class A common stock in Canada
will be made only pursuant to an exemption from the requirement to file a
prospectus in the province or territory of Canada in which such offer or sale
is made. Each United States underwriter has further agreed to send to any
dealer who purchases from it any of the shares of Class A common stock a notice
stating in substance that, by purchasing such shares of Class A common stock,
such dealer represents and agrees that it has not offered or sold, and will not
offer or sell, directly or indirectly, any of such shares of Class A common
stock in any province or territory of Canada or to, or for the benefit of, any
resident of any province or territory of Canada in contravention of the
securities laws thereof and that any offer of shares of Class A common stock

61
<PAGE>

in Canada will be made only pursuant to an exemption from the requirement to
file a prospectus in the province or territory of Canada in which such offer or
sale is made, and that such dealer will deliver to any other dealer to whom it
sells any of such shares of common stock a notice containing substantially the
same statement as is contained in this sentence.

Each international manager has represented and agreed that:

. it has not offered or sold and, prior to the date six months after
the closing date for the sale of shares of Class A common stock to
the international managers, will not offer or sell, any shares of
Class A common stock to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or
agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an
offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995;

. it has complied and will comply with all applicable provisions of
the Financial Services Act 1986 with respect to anything done by it
in relation to the shares of Class A common stock in, from or
otherwise involving the United Kingdom; and

. it has only issued or passed on and will only issue or pass on in
the United Kingdom any document received by it in connection with
the offering of the shares of Class A common stock to a person who
is of a kind described in Article 11(3) of the Financial Services
Act 1986 (Investment Advertisements) (Exemptions) Order 1996 or is a
person to whom such document may otherwise be lawfully issued or
passed on.

No action has been or will be taken in any jurisdiction (except in the United
States) that would permit a public offering of the shares of our Class A common
stock, or the possession, circulation or distribution of this prospectus or any
other material relating to us or shares of our Class A common stock in any
jurisdiction where action for that purpose is required. Accordingly, the shares
of our Class A common stock may not be offered or sold, directly or indirectly,
and neither this prospectus nor any other offering material or advertisements
in connection with the shares of our Class A common stock may be distributed or
published, in or from any country or jurisdiction except in compliance with any
applicable rules and regulations of any such country or jurisdiction.

A prospectus in electronic format is being made available on an Internet web
site maintained by Wit Capital. In addition, all dealers purchasing shares from
Wit Capital in the offering have agreed to make a prospectus in electronic
format available on web sites maintained by each of these dealers. Purchases of
shares from Wit Capital are to be made through an account at Wit Capital in
accordance with Wit Capital's procedures for opening an account and transacting
in securities.

Wit Capital, a member of the National Association of Securities Dealers,
Inc., will participate in the offering as one of the managing underwriters. The
National Association of Securities Dealers, Inc. approved the membership of Wit
Capital on September 4, 1997. Since that time, Wit Capital has acted as an
underwriter, e-manager or selected dealer in over 125 public offerings. Except
for its participation as a manager in the offering, Wit Capital has no
relationship with us or any of our affiliates.

Purchasers of the shares offered by this prospectus may be required to pay
stamp taxes and other charges in accordance with the laws and practices of the
country of purchase in addition to the offering price set forth on the cover
page hereof.

In order to facilitate the offering of the Class A common stock, the United
States underwriters may engage in transactions that stabilize, maintain or
otherwise affect the market price of the Class A common stock. Specifically,
the United States underwriters may allot more shares of the Class A common
stock to investors than the underwriters have agreed to purchase from us in
connection with this offering, thereby resulting in a

62
<PAGE>

short position, which is created by the sale of securities not yet owned by the
seller, in the Class A common stock for their own account. Additionally, to
cover such over-allotments or to stabilize the market price of the Class A
common stock, the United States underwriters may bid for, and purchase shares
of the Class A common stock in the open market. Finally, the representatives,
on behalf of the United States underwriters, also may reclaim selling
concessions allowed to an underwriter or dealer if the underwriting syndicate
repurchases shares distributed by that underwriter or dealer. Any of these
activities may maintain the market price of our Class A common stock at a level
above that which might otherwise prevail in the open market. The United States
underwriters are not required to engage in these activities and, if commenced,
may end any of these activities at any time.

Our Class A common stock has been approved for quotation on the Nasdaq
National Market under the symbol "WWFE."

We have agreed to indemnify the United States underwriters and international
managers against liabilities, including civil liabilities under the Securities
Act, with respect to material misstatements and omissions in this prospectus.

We estimate that the total expenses of the offering, excluding underwriting
discounts and commissions will be approximately $2.5 million.

Prior to this offering, there has been no established market for the Class A
common stock. The initial public offering price for the shares of Class A
common stock offered by this prospectus was determined by negotiation among the
representatives of the underwriters and us. The factors considered in
determining the initial public offering price include:

. the history of, and the prospects for, the industry in which we compete;

. our past and present operations;

. our historical results of operations;

. our prospects for future earnings;

. the recent market prices of securities of generally comparable
companies; and

. the general conditions of the securities market at the time of this
offering.

Directed Share Program

At our request, the United States underwriters have reserved for sale, at the
offering price, up to 5% of the shares of Class A common stock that will be
offered by this prospectus to our directors, officers, employees, independent
contractors and performers. Some purchasers of the reserved shares may be
required to agree in writing not to sell, transfer, assign, pledge or
hypothecate such shares for 180 days from their date of purchase. The number of
shares of Class A common stock available for sale to the general public will be
reduced to the extent such persons purchase such reserved shares. Any reserved
shares that are not so purchased will be offered by the United States
underwriters to the general public on the same basis as the other shares
offered hereby.

63
<PAGE>

LEGAL MATTERS

The validity of the shares of Class A common stock offered by this prospectus
will be passed upon for us by Kirkpatrick & Lockhart LLP, Pittsburgh,
Pennsylvania. Latham & Watkins, New York, New York has acted as counsel for the
underwriters in connection with the offering.

EXPERTS

Our combined financial statements as of April 30, 1998 and 1999 and for each
of the three years in the period ended April 30, 1999 included in this
prospectus have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report appearing in this prospectus and have been so included
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a registration
statement under the Securities Act with respect to the shares of our Class A
common stock offered hereby. This prospectus, which constitutes part of the
registration statement, does not contain all of the information set forth in
the registration statement and the exhibits and schedules thereto. The
summaries in this prospectus of additional information included in the
registration statement or any exhibit thereto are qualified in their entirety
by reference to such information or exhibit. For further information with
respect to us and our Class A common stock, reference is hereby made to the
registration statement and the exhibits and schedules thereto, copies of which
may be inspected without charge at the public reference facilities maintained
by the Securities and Exchange Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549. Please call the Securities and Exchange
Commission at 1-800-SEC-0330 for further information on the public reference
room. In addition, registration statements and certain other documents filed
with the Commission through its Electronic Data Gathering, Analysis and
Retrieval, or EDGAR, system are publicly available through the Commission's
site on the World Wide Web, located at http://www.sec.gov. The registration
statement, including all exhibits thereto and amendments thereof, has been
filed with the Commission through EDGAR.

After the offering, we intend to furnish our stockholders with annual reports
containing audited financial statements and an opinion thereon expressed by
independent public accountants and with quarterly reports containing unaudited
financial information for the first three quarters of each fiscal year.

64
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report............................................... F-2

Combined Balance Sheets.................................................... F-3

Combined Statements of Operations.......................................... F-4

Combined Statements of Changes in Stockholder's Equity..................... F-5

Combined Statements of Cash Flows.......................................... F-6

Notes to Combined Financial Statements..................................... F-7
</TABLE>

F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholder of
World Wrestling Federation Entertainment, Inc.:

We have audited the accompanying combined balance sheets of World Wrestling
Federation Entertainment, Inc. and related companies (the "Company") as of
April 30, 1998 and 1999 and the related combined statements of operations,
changes in stockholder's equity and cash flows for each of the three years in
the period ended April 30, 1999. The combined financial statements include the
accounts of World Wrestling Federation Entertainment, Inc., World Wrestling
Federation Entertainment Canada, Inc. and Stephanie Music Publishing, Inc.
These entities are under common ownership and management. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 combined 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 financial statements present fairly, in all material
respects, the combined financial position of the Company as of April 30, 1998
and 1999 and the combined results of its operations and its combined cash flows
for each of the three years in the period ended April 30, 1999 in conformity
with generally accepted accounting principles.

/s/ Deloitte & Touche LLP

Stamford, Connecticut
July 16, 1999
(October 1, 1999 as to Note 9 and
October 15, 1999 as to Note 10)

F-2
<PAGE>

World Wrestling Federation Entertainment, Inc.

COMBINED BALANCE SHEETS

(dollars in thousands)

<TABLE>
<CAPTION>
As of April 30 As of July 30
----------------- -------------
1998 1999 1999
------- -------- -------------
(unaudited)
ASSETS
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents................... $ 8,797 $ 45,727 $ 34,310
Accounts receivable (less allowance for
doubtful accounts of $920 at April 30, 1999
and $776 (unaudited) at July 30, 1999)..... 21,221 37,509 34,737
Inventory, net.............................. 2,627 2,939 2,587
Prepaid expenses and other current assets... 832 2,849 3,478
Assets held for sale........................ -- 10,183 10,181
------- -------- --------
Total current assets...................... 33,477 99,207 85,293
PROPERTY AND EQUIPMENT--Net................... 26,117 28,377 29,435
OTHER ASSETS.................................. -- 2,604 2,786
------- -------- --------
TOTAL ASSETS.................................. $59,594 $130,188 $117,514
======= ======== ========

<CAPTION>
LIABILITIES AND STOCKHOLDER'S EQUITY
<S> <C> <C> <C>
CURRENT LIABILITIES:
Accounts payable............................ $ 7,878 $ 5,941 $1,857
Accrued expenses and other liabilities...... 12,412 25,821 26,247
Accrued income taxes........................ 593 2,291 531
Deferred income............................. 3,620 11,084 10,888
Current portion of long-term debt........... 709 1,388 1,797
Note payable to stockholder................. -- -- 32,000
------- -------- --------
Total current liabilities................. 25,212 46,525 73,320
LONG-TERM DEBT................................ 11,685 11,403 10,741
COMMITMENTS AND CONTINGENCIES (Note 9)
STOCKHOLDER'S EQUITY:
Common stock................................ 568 568 568
Accumulated other comprehensive loss........ (99) (87) (107)
Retained earnings........................... 22,228 71,779 32,992
------- -------- --------
Total stockholder's equity................ 22,697 72,260 33,453
------- -------- --------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY.... $59,594 $130,188 $117,514
======= ======== ========
</TABLE>

See Notes to Combined Financial Statements.

F-3
<PAGE>

World Wrestling Federation Entertainment, Inc.

COMBINED STATEMENTS OF OPERATIONS

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

<TABLE>
<CAPTION>
Three months ended
-----------------------
Fiscal year ended April 30, July 31, July 30,
---------------------------- ----------- -----------
1997 1998 1999 1998 1999
------- -------- ---------- ----------- -----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
Net revenues............................. $81,863 $126,231 $ 251,474 $39,042 $ 76,222
Cost of revenues......................... 60,958 87,969 146,618 25,031 41,045
Selling, general and
administrative expenses (Note 12)....... 25,862 26,117 45,559 8,305 13,970
Depreciation and amortization............ 1,729 1,676 1,946 418 659
------- -------- ---------- ------- ----------
Operating income (loss).................. (6,686) 10,469 57,351 5,288 20,548
Interest expense (Note 12)............... 782 2,019 1,125 245 409
Other income, net........................ 777 479 1,747 193 851
------- -------- ---------- ------- ----------
Income (loss) before income taxes........ (6,691) 8,929 57,973 5,236 20,990
Provision (benefit) for income taxes..... (186) 463 1,943 175 714
------- -------- ---------- ------- ----------
Net income (loss)........................ $(6,505) $ 8,466 $ 56,030 $ 5,061 $ 20,276
======= ======== ========== ======= ==========

UNAUDITED PRO FORMA INFORMATION (Note 3):
Historical income before income taxes.. $ 57,973 $ 20,990
Pro forma adjustment other than income
taxes................................. 2,515 427
---------- ----------
Pro forma income before income taxes... 55,458 20,563
Pro forma provision for income taxes... 22,227 8,064
---------- ----------
Pro forma net income................... $ 33,231 $ 12,499
========== ==========
Pro forma earnings per common share
(basic and diluted)................... $ 0.59 $ 0.22
========== ==========
Weighted average common shares
outstanding........................... 56,667,000 56,667,000
========== ==========
</TABLE>

See Notes to Combined Financial Statements

F-4
<PAGE>

World Wrestling Federation Entertainment, Inc.

COMBINED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY

(dollars in thousands)

<TABLE>
<CAPTION>
Accumulated
Other
Common Comprehensive Retained
Stock Income (Loss) Earnings Total
------ ------------- -------- -------
<S> <C> <C> <C> <C>
Balance, May 1, 1996.................. $568 $ (49) $24,784 $25,303
-------
Comprehensive (loss):
Net (loss).......................... (6,505) (6,505)
Translation adjustment.............. (13) (13)
-------
Total comprehensive (loss)............ (6,518)
S Corporation distributions........... (2,365) (2,365)
---- ----- ------- -------
Balance, April 30, 1997............... 568 (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............... 568 (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............... 568 (87) 71,779 72,260
---- ----- ------- -------
Comprehensive Income:
Net income (unaudited).............. 20,276 20,276
Translation adjustment (unaudited).. (20) (20)
-------
Total comprehensive income
(unaudited).......................... 20,256
S Corporation distributions
(unaudited).......................... (59,063) (59,063)
---- ----- ------- -------
Balance, July 30, 1999 (unaudited).... $568 $(107) $32,992 $33,453
==== ===== ======= =======
</TABLE>

See Notes to Combined Financial Statements.

F-5
<PAGE>

World Wrestling Federation Entertainment, Inc.

COMBINED STATEMENTS OF CASH FLOWS

(dollars in thousands)

<TABLE>
<CAPTION>
Year ended April 30, Three months ended
------------------------- -----------------------
July 31, July 30,
1997 1998 1999 1998 1999
------- ------- ------- ----------- -----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss).......... $(6,505) $ 8,466 $56,030 $ 5,061 $20,276
Adjustments to reconcile
net income (loss) to net
cash provided by
operating activities:
Depreciation and
amortization.............. 1,729 1,676 1,946 418 659
Provision for doubtful
accounts.................. -- -- 920 -- (144)
Provision for inventory
obsolescence.............. -- -- 1,530 -- --
Deferred income taxes...... -- -- (483) -- --
Changes in assets and
liabilities:
Accounts receivable....... 4,965 (8,848) (17,208) 395 2,916
Inventory................. (99) (2,332) (1,842) (178) 352
Prepaid expenses and other
current assets........... 114 (3) (1,522) (676) (808)
Accounts payable.......... 2,624 1,772 (1,937) (5,450) (4,085)
Accrued expenses and other
liabilities.............. 1,165 5,558 13,409 467 405
Accrued income taxes...... (61) 360 1,698 (931) (1,760)
Deferred income........... (304) (393) 5,105 3,896 (196)
------- ------- ------- ------- -------
Net cash provided by
operating activities.... 3,628 6,256 57,646 3,002 17,615
------- ------- ------- ------- -------
INVESTING ACTIVITIES:
Purchases of property and
equipment.................. (892) (1,294) (3,756) (907) (1,717)
Purchase of hotel & casino.. -- -- (10,878) -- --
Proceeds from sale of
property and equipment..... 43 -- -- -- --
------- ------- ------- ------- -------
Net cash used in
investing activities.... (849) (1,294) (14,634) (907) (1,717)
------- ------- ------- ------- -------

FINANCING ACTIVITIES:
Proceeds (repayments) of
short-term debt........... 1,350 (3,300) -- -- --
Proceeds from long-term
debt...................... 285 12,000 1,563 -- --
Repayments of long-term
debt...................... (975) (4,478) (1,166) (196) (252)
Repayments of capital lease
obligations............... (98) (96) -- -- --
S Corporation
distributions............. (2,365) (2,152) (6,479) (510) (27,063)
------- ------- ------- ------- -------
Net cash provided by
(used in) financing
activities.............. (1,803) 1,974 (6,082) (706) (27,315)
------- ------- ------- ------- -------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS.. 976 6,936 36,930 1,389 (11,417)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD........ 885 1,861 8,797 8,797 45,727
------- ------- ------- ------- -------
CASH AND CASH EQUIVALENTS,
END OF PERIOD ............. $ 1,861 $ 8,797 $45,727 $10,186 $34,310
======= ======= ======= ======= =======

SUPPLEMENTAL CASH FLOW
INFORMATION:
Cash paid during the period
for income taxes.......... $ 162 $ 106 $ 644 $ 560 $ 2,611
Cash paid during the period
for interest.............. 602 2,063 1,143 319 272
SUPPLEMENTAL NON-CASH
INFORMATION:
Receipt of warrants (Note
14)....................... $ -- $ -- $ 2,359 $ -- $ --
Issuance of note payable to
stockholder (Note 12)..... -- -- -- -- 32,000
</TABLE>

See Notes to Combined Financial Statements.

F-6
<PAGE>

World Wrestling Federation Entertainment, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS
(dollars in thousands, except share and per share data)

1. Basis of Presentation and Business Description

The accompanying combined financial statements which include the accounts of
World Wrestling Federation Entertainment, Inc., formerly known as Titan Sports
Inc., its wholly-owned subsidiaries, TSI Realty Company and WWF Hotel & Casino
Ventures LLC, its majority-owned subsidiary Titan/Shane Partnership, and its
affiliated companies, World Wrestling Federation Entertainment Canada, Inc.,
formerly known as, Titan Promotions (Canada), Inc., and Stephanie Music
Publishing, Inc., (collectively the "Company"), are presented on a combined
basis because of their common ownership. All significant inter-company
transactions and balances have been eliminated.

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 consumer products through third
party licensees and direct marketing and sales of merchandise, magazines
and home videos.

Prior to the consummation of the proposed initial public offering of the common
stock of World Wrestling Federation Entertainment, Inc. (the "Offering"), the
Company plans to enter into a series of transactions to combine the affiliated
companies under World Wrestling Federation Entertainment, Inc. These
transactions will be accounted for similar to a pooling of interests as World
Wrestling Federation Entertainment Canada, Inc. and Stephanie Music Publishing,
Inc. have 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 and certificates of deposit with original
maturities of three months or less.

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

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 - Other than World Wrestling Federation Entertainment Canada,
Inc., the Company is an S Corporation under the Internal Revenue Code for U.S.
federal income tax purposes. Accordingly, federal taxable income or loss
attributable to the operations of the Company is included in the federal
taxable income of the individual stockholder. The provision for income taxes
relates to the foreign operations of the Company

F-7
<PAGE>

World Wrestling Federation Entertainment, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(dollars in thousands, except share and per share data)

and certain state taxes. The deferred state and foreign tax provision is
determined under the 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.

Prior to or concurrent with the closing of the Offering, the Company will
terminate its S Corporation election and will thereafter be subject to federal,
state and foreign income taxes. See Note 3 regarding pro forma income taxes
assuming that the Company had not been an S Corporation.

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. 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.

Foreign Currency Translation - For translation of the financial statements of
its Canadian affiliate, 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 stockholder's
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 then 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.

Segment Reporting - Effective May 1, 1998, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 131, "Disclosures About Segments of
an Enterprise and Related Information". See Note 13 for a description of the
Company's operating segments.

Comprehensive Income - SFAS No. 130, "Reporting Comprehensive Income" was
adopted by the Company in the first quarter of fiscal 1999. SFAS 130
establishes standards of reporting and displaying comprehensive income and its
components. It requires that all items required to be recognized under
accounting standards as components of comprehensive income be reported in a
financial statement or financial statement footnote. SFAS 130 defines
comprehensive income as the change in equity of a business during a period from
transactions and other events and circumstances from non-owner sources. The
only source of other comprehensive income (loss) was foreign currency
translation adjustments amounting to $(13), $(37), and $12 for the fiscal years
ended April 30, 1997, 1998 and 1999, respectively.

F-8
<PAGE>

World Wrestling Federation Entertainment, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(dollars in thousands, except share and per share data)

Recent Accounting Pronouncements - In June 1998, SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities" was released. 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 periods 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 14.

Interim Financial Information (unaudited) - The historical combined financial
information for the three months ended July 31, 1998 and July 30, 1999 and as
of July 30, 1999 have been derived from the Company's unaudited combined
financial statements, which in the opinion of management include all
adjustments (consisting of normal recurring adjustments) that are necessary to
present fairly our results of operations and financial position for the periods
and the date presented. The results of operations for the three months ended
July 30, 1999 are not necessarily indicative of the results to be expected for
the full year.

3. Unaudited Pro Forma Information

The unaudited pro forma combined statement of operations information presents
the pro forma effects on the historical combined statement of operations for
the year ended April 30, 1999 and the three months ended July 30, 1999 of the
additional compensation of $2,515 and $427, respectively to the chairman of the
board of directors and to the chief executive officer pursuant to employment
agreements that become effective upon the closing of the Offering.
Additionally, it presents income taxes of $22,227 and $8,064 to give pro forma
effect for the year ended April 30, 1999 and the three months ended July 30,
1999, respectively, due to the change in the Company's tax status from an S
Corporation to a C Corporation, representing an overall effective tax rate of
40% and 39%, respectively.

Pro Forma Earnings Per Share (Basic and Diluted)

All share and per share information has been retroactively restated to reflect
the 566,670-for-one stock split which became effective on October 15, 1999. See
Note 10.

4. Assets Held for Sale

Assets held for sale at April 30, 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 is expected to be sold prior to the end of fiscal year 2000. The
property was purchased in the second quarter of fiscal year 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.

5. Property and Equipment

Property and equipment consists of the following as of:

<TABLE>
<CAPTION>
April 30, July 30,
--------------- -----------
1998 1999 1999
------- ------- -----------
(unaudited)
<S> <C> <C> <C>
Land, buildings and improvements.................... $31,049 $31,010 $31,903
Equipment........................................... 16,017 20,170 20,956
Vehicles............................................ 451 543 577
------- ------- -------
47,517 51,723 53,436
Less accumulated depreciation and amortization.... 21,400 23,346 24,001
------- ------- -------
Total........................................... $26,117 $28,377 $29,435
======= ======= =======
</TABLE>

F-9
<PAGE>

World Wrestling Federation Entertainment, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(dollars in thousands, except share and per share data)

Depreciation and amortization expense was $1,729, $1,676 and $1,946 for the
years ended April 30, 1997, 1998 and 1999, respectively and $418 (unaudited)
and $659 (unaudited) for the three months ended July 31, 1998 and July 30,
1999, respectively.

6. Accrued Expenses and Other Liabilities

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

<TABLE>
<CAPTION>
April 30, July 30,
--------------- -----------
1998 1999 1999
------- ------- -----------
(unaudited)
<S> <C> <C> <C>
Accrued pay-per-view event costs.................... $ 3,106 $ 5,364 $ 3,724
Accrued talent royalties............................ 1,625 4,476 2,918
Accrued payroll related costs....................... 3,182 4,355 2,486
Accrued television costs............................ 515 3,009 4,632
Accrued other....................................... 3,984 8,617 12,487
------- ------- -------
Total............................................. $12,412 $25,821 $26,247
======= ======= =======

7. Debt

Debt as of April 30, 1998 and 1999 consists of the following:

<CAPTION>
1998 1999
------- -------
<S> <C> <C> <C>
GMAC Commercial Mortgage Corporation................ $11,892 $11,410
IBJ-Business Credit Corporation..................... -- 1,133
J.L.J. Financial Services Corp...................... 183 88
Charter Financial, Inc.............................. 319 160
------- -------
Total debt.......................................... 12,394 12,791
Less current portion................................ 709 1,388
------- -------
Long-term debt...................................... $11,685 $11,403
======= =======
</TABLE>

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, CT.

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, requires the maintenance of
certain financial ratios, places limitations on distributions to the
stockholder and restricts the Company's ability to borrow funds from other
sources. In July 1999, the Company obtained a waiver which, among other things,
raises the existing limitations on stockholder distributions. At April 30,
1999, 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.

F-10
<PAGE>

World Wrestling Federation Entertainment, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(dollars in thousands, except share and per share data)

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, 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 J.L.J. Financial Services Corp. under which the Company borrowed $285 at a
fixed interest rate of 10.89%. Principal and interest are to be paid in 36
monthly installments of approximately $9, which commenced on March 1, 1997. The
borrowing is collateralized by certain equipment.

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%. The borrowing is collateralized by certain equipment.
Principal and interest are to be paid in 60 monthly installments of
approximately $15, which commenced on April 1, 1995.

Interest expense was $782, $2,019 and $1,125 for the years ended April 30,
1997, 1998 and 1999, respectively.

At April 30, 1999, the scheduled principal repayments under the loan agreements
described above were as follows:

<TABLE>
<CAPTION>
Year Ending April 30,
---------------------
<S> <C>
2000........................................................... $ 1,388
2001........................................................... 1,017
2002........................................................... 573
2003........................................................... 619
2004........................................................... 667
Thereafter...................................................... 8,527
-------
Total.......................................................... $12,791
=======
</TABLE>

8. Income Taxes

Other than World Wrestling Federation Entertainment Canada, Inc., the Company
is 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 combined financial statements. Income tax provision
(benefit) in 1997, 1998 and 1999 was $(186), $463 and $1,943 respectively, and
was comprised primarily of current state and foreign taxes.

Prior to or concurrent with the closing of the Offering, the Company will no
longer be treated as an S Corporation and, accordingly, the Company will be
subject to federal, foreign and state income taxes. See Note 3 regarding pro
forma income taxes assuming the Company had not been an S Corporation.

F-11
<PAGE>

World Wrestling Federation Entertainment, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(dollars in thousands, except share and per share data)

The components of the Company's tax provision (benefit) for each of the three
years in the period ended April 30, 1999 are as follows:

<TABLE>
<CAPTION>
1997 1998 1999
----- ---- ------
<S> <C> <C> <C>
Current:
State and local..................................... $ 86 $414 $2,202
Foreign............................................. (272) 49 224
Deferred:
State and local..................................... -- -- (413)
Foreign............................................. -- -- (70)
----- ---- ------
Total............................................. $(186) $463 $1,943
===== ==== ======
</TABLE>

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, 1998 and 1999:

<TABLE>
<CAPTION>
1998 1999
---- ----
<S> <C> <C>
Deferred tax assets:
Accounts receivable.......................................... $-- $188
Inventories.................................................. 15 100
Accrued profit sharing....................................... 37 --
Accrued liabilities and reserves............................. 30 65
Other........................................................ 39 226
Foreign...................................................... -- 70
---- ----
121 649
Deferred tax liabilities:
Fixed assets and depreciation................................ 95 117
Intangible assets............................................ -- 7
Other assets................................................. -- 16
---- ----
95 140
---- ----
Total, net.................................................. $ 26 $509
==== ====
</TABLE>

The temporary differences described above represent differences between the
tax basis of assets or liabilities and their reported amounts in the combined
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. The net deferred tax asset is included in prepaid
expenses and other current assets in the combined balance sheet.

9. Commitments and Contingencies

Commitments

The Company has certain commitments, including various non-cancellable
operating leases, performance contracts with various performers, employee
agreements, and an agreement with a television network, which guarantees the
network a minimum payment for advertising during the course of the agreement.
On August 26, 1999, the Company entered into an agreement with another
television network which guarantees this network a

F-12
<PAGE>

World Wrestling Federation Entertainment, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(dollars in thousands, except share and per share data)

minimum payment for advertising time during the course of the agreement. Future
minimum payments under the leases and other various agreements as of April 30,
1999, adjusted for the television agreement described above are as follows:

<TABLE>
<CAPTION>
Operating
Lease Other
Year Ending April 30, Commitments Commitments Total
--------------------- ----------- ----------- --------
<S> <C> <C> <C>
2000.................................. $ 524 $ 39,718 $ 40,242
2001.................................. 510 33,490 34,000
2002.................................. 509 14,028 14,537
2003.................................. 468 5,189 5,657
2004.................................. 498 3,167 3,665
Thereafter............................. 2,001 6,550 8,551
------ -------- --------
Total................................. $4,510 $102,142 $106,652
====== ======== ========
</TABLE>

Rent expense under operating leases was approximately, $175, $170 and $260, for
the fiscal years ended April 30, 1997, 1998 and 1999, respectively.

On June 29, 1999 the Company made an S Corporation distribution to its
stockholder in the form of an unsecured, 5% interest-bearing note in the
principal amount of $32,000 due April 10, 2000. The note represents estimated
federal and state income taxes payable by the Company's stockholder with
respect to the Company's income for fiscal 1999 and estimated for the interim
period May 1, 1999 through September 30, 1999. The Company's actual earnings
through the date of the Offering could exceed those used in the calculation of
the estimated federal and state income taxes payable by its stockholder, thus
requiring the Company to make additional distributions in the form of cash or
notes to its stockholder.

Contingencies

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 the Company's stockholder. 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 reached a verbal 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 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 in the action described above. 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. Discovery has not been
completed, and no trial date has been scheduled. The Company believes that an
unfavorable outcome in these actions may have a material adverse effect on its
financial position or results of operations.

On August 28, 1996, James Hellwig, a former professional wrestler who had been
one of the Company's performers, filed a suit against the Company in state
court in Arizona alleging breach of two separate service contracts, defamation
and unauthorized use of servicemarks and trademarks allegedly owned by him.
Hellwig is also seeking a declaration that he owns the characters, Ultimate
Warrior and Warrior, which he portrayed as a

F-13
<PAGE>

World Wrestling Federation Entertainment, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(dollars in thousands, except share and per share data)

performer under contract with the Company. Pursuant to mandatory disclosure
requirements filed with the court, Hellwig stated that he is seeking
approximately $10,000 in compensatory damages and $5,000 in punitive damages,
or such other amount as may be determined by the court or jury. The Company has
denied all liability and is vigorously defending this action. The Company
believes that Hellwig's claims are without merit. The Company has asserted
counterclaims against him for breach of his service contracts and seeks
rescission of an agreement by which the Company transferred ownership of the
servicemarks to him. In addition, the Company filed a separate action in
federal district court in Connecticut on March 11, 1998, seeking a declaration
that the Company owns the characters, Warrior and Ultimate Warrior, under both
contract and copyright law. Hellwig's motion to dismiss the federal case was
denied, and the Company has since moved for summary judgment in the federal
proceeding. In the state court proceeding in Arizona, on June 3, 1999, the
Company moved for summary judgment on the two contract claims, the defamation
claim, and the other claims of the plaintiff. On September 7, 1999, the Arizona
court issued a summary judgment decision in the Company's favor on Hellwig's
defamation claims. Hellwig had sought $100 in compensatory damages and $5,000
in punitive damages on this claim. The Arizona court also granted the Company's
motion for summary judgment on Hellwig's claim for $4,000 damages for his
failed business ventures. The court ruled Hellwig could not properly claim
damages for the failed business ventures because the Company made no
contractual commitment to fund his failed business ventures. Further, the court
denied the Company's summary judgment motion with respect to his breach of the
1996 contract and at this time has not ruled upon the Company's fourth summary
judgment motion with respect to his breach of the 1992 contract. The Company
intends to move for summary judgment regarding Hellwig's royalty claims on the
sale of videos and merchandise. The Company believes that the ultimate
liability resulting from this suit, if any, will not have a material adverse
effect on the Company's financial position or results of operations.

On June 21, 1996, the Company filed an action against WCW and Turner
Broadcasting Systems, Inc. in the United States District Court for the District
of Connecticut, alleging unfair competition and infringement of the Company's
copyrights, servicemarks and trademarks with respect to two characters owned by
the Company. The Company's claim that WCW, which contracted with two
professional wrestlers who previously had performed under contract for the
Company in the character roles of Razor Ramon and Diesel, misappropriated those
characters in WCW's programming and misrepresented the reason that these former
World Wrestling Federation professional wrestlers were appearing on WCW
programming. During discovery proceedings, which were completed on October 16,
1998, WCW was twice sanctioned by the court for failure to comply with the
court's discovery orders. The Company is seeking damages in the form of revenue
disgorgement from WCW and has submitted expert reports supporting the Company's
claim for substantial money damages. WCW and TBS have denied any liability.

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
described above. WCW alleges 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 the Company aired its "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 Company has denied any liability
and is vigorously defending against this action. The Company has filed a
counterclaim for abuse of process, which WCW has moved to dismiss. Discovery is
ongoing, and the Company intends to move for summary judgment when discovery is
concluded. The Company believes that WCW's claims are without merit. WCW has
yet to state a claim for damages. The Company believes that the ultimate
liability resulting from such proceeding, if any, will not have a material
adverse effect on the Company's financial position, results of operations or
prospects.

F-14
<PAGE>

World Wrestling Federation Entertainment, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(dollars in thousands, except share and per share data)

In addition, on December 11, 1998, WCW filed a suit against the Company in
state court in Georgia alleging that the Company had breached an existing
contract between the Company and High Road Productions, Inc., a film
distribution company, and thereby allegedly interfered with a potential
contract between High Road and WCW. WCW seeks unspecified money damages. The
Company has denied all liability, believes that WCW's claims are without merit,
and is vigorously defending against the suit. On April 2, 1999, the Company
moved to dismiss and for judgment on the pleadings on the grounds that WCW's
complaint fails to state a claim for tortious interference with business
relations as a matter of Georgia law. A hearing on the motion was held on July
14, 1999, and on August 6, 1999 the judge granted the Company's motion and
dismissed WCW's case.

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, the Company's Chairman of the Board of Directors
and the Company's President and Chief Executive Officer, 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-claim denying any liability for
negligence and other claims asserted against the Company. 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. The Company is principally
seeking a declaratory judgment with respect to the enforceability of certain
contractual defenses, forum selection clauses, and other provisions of Owen
Hart's contract with the Company. The defendants have not yet filed an answer.
The Company believes that an unfavorable outcome of this suit may have a
material adverse effect on the Company's financial position, results of
operations or prospects.

On September 16, 1999, Nicole Bass, a professional wrestler affiliated with the
Company, filed an action in the United States District Court for the Eastern
District of New York alleging sexual harassment under New York law, civil
assault and intentional infliction of emotional distress. Bass seeks $20,000 in
compensatory damages and $100,000 in punitive damages. The Company has not been
formally served with the complaint and has not conducted an extensive
investigation of the allegations in the complaint. The Company believes that
the claims are without merit and intend to vigorously defend against this
action. Based on a 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.

The Company is not currently a party to any other material legal proceedings.
However, the Company 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.

F-15
<PAGE>

World Wrestling Federation Entertainment, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(dollars in thousands, except share and per share data)

10. Stockholder's Equity

At April 30, 1999, common stock of the Company, by entity, was as follows:

<TABLE>
<CAPTION>
Par/ Authorized Issued Outstanding $
Entity Stated Value Shares Shares Shares Amount
------ ------------ ----------- ---------- ----------- ------
<S> <C> <C> <C> <C> <C>
World Wrestling Federa-
tion
Entertainment, Inc..... $.01 240,000,000 56,667,000 56,667,000 $567
World Wrestling
Federation
Entertainment Canada,
Inc. .................. None Unlimited 100 100 --
Stephanie Music Publish-
ing, Inc............... None 5,000 100 100 1
----
$568
====
</TABLE>

Prior to the consummation of the proposed Offering of World Wrestling
Federation Entertainment, Inc., the Company plans to combine the affiliated
entities under World Wrestling Federation Entertainment, Inc. These
transactions will be accounted for similar to a pooling of interests as World
Wrestling Federation Entertainment Canada, Inc. and Stephanie Music Publishing,
Inc. have been under common control since their respective formations.

In July 1999, the Company adopted the 1999 Long-Term Incentive Plan ("LTIP"),
which becomes effective upon the closing of 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 purchase shares at a purchase price equal to
the fair market value on 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 (unaudited). At the time of
the Offering, the Company will grant options to purchase 5,398,500 (unaudited)
shares under the LTIP. Of these options, 4,438,500 (unaudited) will be granted
to employees and 960,000 (unaudited) will be granted to independent contractors
consisting primarily of the Company's performers. With respect to the options
granted to independent contractors, the Company will account for the equity
instruments 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." The options granted to
employees will be accounted for in accordance with Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees." The exercise price
of such stock options will equal the Offering price.

On October 15, 1999, the Company filed an amended and restated certificate of
incorporation which, among other things, authorizes 60,000,000 shares of new
Class B common stock, par value $.01 per share, reclassifies each outstanding
share of World Wrestling Federation Entertainment, Inc. common stock into
566,670 shares of Class B common stock, authorizes 180,000,000 shares of new
Class A common stock, par value $.01 per share and authorizes 20,000,000 shares
of preferred stock, par value $.01 per share.

11. 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

F-16
<PAGE>

World Wrestling Federation Entertainment, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(dollars in thousands, except share and per share data)

Company may also make additional discretionary contributions to the plan. There
were no Company matching contributions to the 401(k) plan in fiscal 1997 or
1998. The Company's expense for matching contributions and additional
discretionary contributions to the 401(k) plan was $233 during fiscal 1999.

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. There were
no contributions to the profit sharing plan in fiscal 1997. 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 $769 during fiscal 1999.

12. Related Party Transactions

The Company expensed approximately $1,963 in 1997, $1,063 in 1998 and $123 in
1999 in travel related costs and management fees paid to a travel agency which
is owned by the president of the Company. The management fee is paid in return
for the travel agency's overall management of the Company's travel planning
requirements. Amounts receivable from the travel agency at April 30, 1998 and
1999 was $0 and $205, respectively. These balances arise from transactions
conducted in the normal course of business.

The Company has a receivable from Shane Distribution Co. in the amount of $365
and $377 at April 30, 1998 and 1999, respectively. Shane Distribution Co. is a
movie distribution company owned by the stockholder of the Company.

For the fiscal years ended April 30, 1997, 1998 and 1999 and for the three
months ended July 31, 1998 and July 30, 1999, the Company made S Corporation
distributions to its sole stockholder of $2,365, $2,152, $6,479, $510
(unaudited) and $59,063 (unaudited). For the three months ended July 30, 1999,
$57,500 of the total distributions were made on June 29, 1999 and are more
fully described below.

On June 29, 1999 the Company made a distribution of $25,500 to its stockholder,
representing a portion of previously earned and undistributed earnings, which
have been fully taxed at the stockholder level. Additionally, on June 29, 1999
the Company made an S Corporation distribution to its stockholder in the form
of an unsecured, 5% interest-bearing note in the principal amount of $32,000
due April 10, 2000. The note represents estimated federal and state income
taxes payable by the Company's stockholder with respect to the Company's income
for fiscal 1999 and estimated for the interim period May 1, 1999 through
September 30, 1999. The Company's actual earnings through the date of the
Offering could exceed those used in the calculation of the estimated federal
and state income taxes payable by its stockholder, thus requiring the Company
to make additional distributions in the form of cash or notes to its
stockholder. The Company expensed $133 (unaudited) during the three months
ended July 30, 1999 related to accrued interest on this note.

F-17
<PAGE>

World Wrestling Federation Entertainment, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(dollars in thousands, except share and per share data)

13. Segment Information

The Company's operations are conducted within two reportable segments, live and
televised entertainment and branded merchandise. 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 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. There are no intersegment revenues.
Results of operations and assets from non-U.S. sources are less than 10% of the
respective combined financial statement amounts. The table presents information
about the financial results of each segment for the years ended April 30, 1997,
1998 and 1999 and assets as of April 30, 1998 and 1999 and for the three months
ended July 31, 1998 (unaudited) and July 30, 1999 (unaudited) and as of July
30, 1999 (unaudited).
<TABLE>
<CAPTION>
July
April 30, 31, July 30,
---------------------------- ------- --------
1997 1998 1999 1998 1999
-------- -------- -------- ------- --------
(unaudited)
<S> <C> <C> <C> <C> <C>
Revenues:
Live and televised
entertainment.............. $ 63,913 $ 92,649 $170,045 $26,973 $ 51,341
Branded merchandise......... 17,950 33,582 81,429 12,069 24,881
-------- -------- -------- ------- --------
Total revenues.............. $ 81,863 $126,231 $251,474 $39,042 $ 76,222
======== ======== ======== ======= ========
Depreciation and Amortization:
Live and televised
entertainment.............. $ 648 $ 633 $ 908 $ 209 $ 416
Branded merchandise......... -- -- -- -- --
Corporate................... 1,081 1,043 1,038 209 243
-------- -------- -------- ------- --------
Total depreciation and
amortization............... $ 1,729 $ 1,676 $ 1,946 $ 418 $ 659
======== ======== ======== ======= ========
Operating Income (Loss):
Live and televised
entertainment.............. $ 9,344 $ 19,390 $ 61,870 $ 7,977 $ 19,715
Branded merchandise......... 3,610 11,159 26,163 3,303 10,032
Corporate................... (19,640) (20,080) (30,682) (5,992) (9,199)
-------- -------- -------- ------- --------
Total operating income
(loss)..................... $ (6,686) $ 10,469 $ 57,351 $ 5,288 $ 20,548
======== ======== ======== ======= ========
Assets:
Live and televised
entertainment.............. $ 25,678 $ 39,096 $ 39,057
Branded merchandise......... 5,281 24,118 10,480
Unallocated................. 28,635 66,974 67,977
-------- -------- --------
Total assets................ $ 59,594 $130,188 $117,514
======== ======== ========
</TABLE>

14. 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

F-18
<PAGE>

World Wrestling Federation Entertainment, Inc.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)
(dollars in thousands, except share and per share data)

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 $2,359. 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, 1999. The estimated
fair value of such warrants was $4,784 at April 30, 1999.

F-19
<PAGE>

PROSPECTUS Alternate International Page

10,000,000 Shares
World Wrestling Federation Entertainment, Inc.

Class A Common Stock

[LOGO]

This is an initial public offering of 10,000,000 shares of the Class A common
stock of World Wrestling Federation Entertainment, Inc. We are selling all of
the shares of Class A common stock by means of this prospectus. Of the
10,000,000 shares being offered, the international managers are initially
offering 2,000,000 shares outside the United States and Canada, and the U.S.
underwriters are initially offering 8,000,000 shares in the United States and
Canada.

There is no public market for our Class A common stock at the present time.

Our Class A common stock has been approved for quotation on the Nasdaq
National Market under the symbol "WWFE."

See "Risk Factors" beginning on page 9 to read about certain risks that you
should consider before buying shares of our Class A common stock.

Neither the Securities and Exchange Commission nor any other regulatory body
has approved or disapproved these securities or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.
<TABLE>
<CAPTION>
Per
Share Total
------ ------------
<S> <C> <C>
Public offering price...................................... $17.00 $170,000,000
Underwriting discounts and commissions..................... $ 1.19 $ 11,900,000
Proceeds, before expenses, to us........................... $15.81 $158,100,000
</TABLE>

The international managers and the U.S. underwriters have an option to
purchase up to an additional 1,500,000 shares of Class A common stock from us
at the public offering price less the underwriting discount.

Bear, Stearns International Limited

Credit Suisse First Boston

Merrill Lynch International

The date of this prospectus is October 18, 1999
<PAGE>

APPENDIX

OUTSIDE FRONT COVER

The background of the outside front cover is a blue tinted photograph of one of
our live events depicting fans and a wrestling ring. In the top center covering
approximately 1/3 of the page is our logo in white and underlined in red.

INSIDE FRONT COVER

At the top of the inside front cover is our logo in white and underlined in red
(approximately 1" x 1") with the words "Live Entertainment" next to it in black
with a gold outline. The background of the inside front cover is a blue tinted
photograph of one of our live events. Seven photographs appear on the inside
front cover. (Clockwise from top left) In the top left corner is a picture which
shows approximately 15 fans at one of our live events, some wearing our branded
merchandise and some holding signs referencing our intellectual property. The
top middle photograph shows three fans, one of which is dressed in a business
suit holding a sign with the text "Corporate Fan." The top right photograph
shows one of our performers, "Stone Cold Steve Austin," holding the championship
belt with his hands above his head. The bottom right photograph depicts an
action scene from one of our live events where one of our performers, "Stone
Cold Steve Austin," struggles with another of our performers, "The Rock", while
fans look on. The bottom left photograph shows one of our performers, "Stone
Cold Steve Austin," face-to-face with another of our performers, "Mr. McMahon."
The left middle photograph shows one of our performers, "X-Pac," performing an
athletic maneuver in the wrestling ring with a pyrotechnic display in the
background. The center photograph shows a panoramic view of one of our live
events, Wrestlemania 1998 at the Fleet Center, Boston Massachusetts, after
pyrotechnics have just been set off above our ring.

FRONT GATEFOLD

At the top of the left inside portion of the front gatefold is our logo in white
and underlined in red (approximately 1" x 1") with the words "Televised
Entertainment" next to it in black with a gold outline. The background is a blue
tinted picture of one of our live events upon which is superimposed the image of
a globe. A number of photographs and other graphics appear on the front
gatefold. In the center of the gatefold is a photograph of one of our
performers, "The Undertaker," covering approximately 1/3 of the page. To the
left of this picture and down the left hand side of the gatefold are the words
"Seven Slammin' Programs" in gold and listed vertically below are the names and
logos of our seven shows: RAW IS WAR, WWF SMACKDOWN!, LIVE WIRE, WWF Superstars,
WWF Metal, WWF Jakked, and WWF Sunday Night Heat. Along the bottom of the front
gatefold are six photographs. (From left to right) The first photograph shows
our television production employees monitoring and editing one of our live
events. The next photograph shows a cameraman filming one of our performers,
"The Rock." The third photograph shows one of our performers, "Mr. McMahon",
with a microphone in his hand and a large photograph of another of our
performers, "Stone Cold Steve Austin", in the background. The next photograph
shows two of our performers, "Christian" and "Edge", in the ring with
pyrotechnics in the background. The fifth picture shows one of our performers,
"Val Venis," in his signature pose. The final photograph shows a scene from one
of our television programs in which cement is being poured from a cement mixer
into an empty white corvette. Down the right side of the front gatefold are
copies of five of our pay-per-view posters. (From top to bottom) The first
poster depicts two of our performers, "Chyna" and "Triple H" standing back to
back in front of two trains. At the bottom of the poster appears the text "Fully
Loaded" with our WWF logo centered above the text. The second poster depicts one
of our performers, "The Undertaker," standing before an orange and black
background with lightening bolts shooting out of his hands. At the bottom of the
poster, the text "Unforgiven" appears twice, once in larger green font and again
in smaller white font on top of the green font. Centered above the text is our
WWF logo. The third poster depicts a smoking skull sitting in a pile of ashes
with an image of the face of one of our performers, "Stone Cold Steve Austin,"
in the background. At the bottom of the poster appears the text "Summerslam" in
black and outlined in white and orange. Centered above the text is our WWF logo.
The fourth poster depicts the faces of two of our performers, "Stone Cold Steve
Austin" and "Shawn Michaels" along the bottom of the poster. Between our two
performers is the face of one of our celebrity guests. Above these three images
is the text "Wrestle Mania X" in a red 3 dimensional image before a black
background. At the top of the poster appears the text "The greatest PPV
attraction of all time!" The final poster depicts one of our performers, "The
Big Show", with an image of the same performer superimposed behind him. Along
the top of the poster appears the text, "King of the Ring" above which is
centered our WWF logo. To the right of these posters are the words "Monthly Pay
Per View Spectaculars" in black with a gold outline and below which are listed
each of our monthly pay-per-view events and the months in which they air: Royal
Rumble (Jan.), No Way Out (Feb.), WrestleMania (Mar.) Backlash (Apr.), Judgment
Day (May), King of the Ring (Jun.), Fully Loaded (Jul.), Summer Slam (Aug.),
Unforgiven (Sep.), No Mercy (Oct.), Survivor Series (Nov.) and Armageddon
(Dec.).

<PAGE>

OUTSIDE BACK COVER

The background of the outside back cover is a blue tinted photograph of one of
our live events. In the top center is our logo in white and underlined in red,
with the words "World Wrestling Federation Entertainment, Inc." below it. In the
forefront is a picture of two of our performers, "The Rock" and "Stone Cold
Steve Austin" standing side by side and covering the full page.

INSIDE BACK COVER

The background of the inside back cover is a blue tinted photograph of one of
our live events upon which is superimposed the image of a globe. The top left
corner is our wwf.com logo in white with the words "Download this!" in red below
it, on a black background. Below that and in the middle of the left side is a
picture of one of our performers, "Mankind", with "Mr. Socko", his hand puppet.
The bottom left corner shows pyrotechnics at one of our live events. At the top
center is our "wwf.com Interactive" logo in red with a black background. Below
this logo is the text "Internet" in black with a yellow outline. Running along
the right side are images of homepages of five of our Internet sites,
stonecold.com, wwf.com, www.summerslam.com, www.divas.com, and wwfshopzone.com.
In the middle of this page are the words "Internet" in black with a gold
outline.

BACK GATEFOLD

At the top of the inside front portion of the gatefold is our logo in white and
underlined in red (approximately 1" x 1") with the words "Branded Merchandise"
next to it in black with a gold outline. The background is a blue tinted picture
of one of our live events upon which is superimposed the image of a globe. A
number of photographs and other graphics appear on the back gatefold. In the
center of the gatefold, covering approximately 1/3 of the page, is a photograph
of one of our performers, "Mankind," with our logo and the words "Superstar
Mankind" on his picture. At the top left of this back gatefold is a picture of
our fans at one of our live events and one of our performers, "Stone Cold Steve
Austin," standing in the ring. Below that is a photograph showing a scene from
one of our television programs in which a truck marked with our intellectual
property drives over a car. Below that is a picture of one of our performers,
"Kane," holding a championship belt. Below that picture is the "WWF Racing
Attitude" logo in black, gold and red lettering. Along the bottom of the back
gatefold are pictures of our branded merchandise, including toys, toy figures,
clothing, garment bags, cologne, clocks and hats. At the top right of the back
gatefold is a picture of our Raw Magazine with one of our performers, "Debra",
holding two canines on the cover. Below it are the words "WWF (logo) Magazine"
in black with a gold outline. To the right of that is a picture of our WWF
Magazine with a picture of one of our performers, "Road Dogg", with a canine and
the words "Dogg Dayz of Summer" in green on the cover. Below it are the words
"WWF (logo) Magazine" in black with a gold outline. Below that along the right
center of the back gatefold are the words "Publishing, Home Video & Music" in
black with a gold outline. Below that are pictures of two of our video boxes
entitled "Wrestlemania" and "Backlash" with the "DVD Video" and "WWF Home Video"
logos. The "Wrestlemania" video box has the text "World Wrestling Federation" in
small white font on the top. The title "Wrestlemania" appears in white font in
the top center. Our logo in white and underlined in red appears above the title.
The text "the Ragin Climax" appears in white font below the title. The
background and the faces of our performers shown on the bottom of the video box,
"The Rock", The Big Show, The Undertaker, Triple H, "Mankind" and "Stone Cold
Steve Austin", are red tinted. The "Backlash" video box has the text "World
Wrestling Federation" in small white font on the top. The title "Backlash"
appears in gold font in the top center. Our logo in white and underlined in red
appears above the title in the top left corner. The face of one of our
performers, "Mankind", appears on a black background. Two performers are shown
struggling in the bottom left corner. Below that in the right bottom corner of
the back gatefold is the word "Music" in black with a gold outline and below it
a picture of four of our music compact discs.