Summary of WORLD WRESTLING ENTERTAINMENTINC

Management's Discussion and Analysis of Financial Condition and Results of Operations

Background

The following analysis outlines all material activities contained within each of our business segments.

Live and Televised Entertainment

º Revenues consist principally of ticket sales to live events, sales of merchandise at these live events, television rights fees, sales of television advertising and sponsorships, and fees for viewing our pay-per-view and video on demand programming.

Consumer Products

º Revenues consist principally of direct sales of WWE produced home videos and magazine publishing and royalties or license fees related to various WWE themed products such as video games, toys and books.

Digital Media

º Revenues consist principally of advertising sales on our websites, sale of merchandise on our website through our WWEShop internet storefront and various broadband and mobile content.

WWE Studios

º Revenues consist of our share of receipts from the distribution of filmed entertainment featuring our Superstars. We participate in revenues generated under the distribution of the films through all media after the print and advertising and distribution costs incurred by our distributors have been recouped and the results have been reported to us.

Results of Operations

Three Months Ended September 30, 2009 compared to Three Months Ended September
30, 2008
(Dollars in millions, except as noted)

Summary

                                        September 30,      September 30,      better
    Net Revenues                            2009               2008          (worse)
    Live and Televised Entertainment   $          77.9    $          68.7       13 %
    Consumer Products                             23.0               26.6      (14 %)
    Digital Media                                  7.4                7.9       (6 %)
    WWE Studios                                    3.0                5.6      (46 %)
    Total                              $         111.3    $         108.8        2 %



                                        September 30,      September 30,      better
     Cost of Revenues:                      2009               2008          (worse)
     Live and Televised Entertainment  $        44.3      $        47.0         6 %
     Consumer Products                          10.4               10.2        (2 %)
     Digital Media                               4.2                5.7        26 %
     WWE Studios                                 1.2                3.4        65 %
     Total                             $        60.1      $        66.3         9 %
     Profit contribution margin                   46 %               39 %



                                        September 30,      September 30,      better
     Operating Income:                      2009               2008          (worse)
     Live and Televised Entertainment  $        29.3      $        17.8         65 %
     Consumer Products                          11.3               14.7        (23 %)
     Digital Media                               0.8                0.8          -
     WWE Studios                                 1.3                1.7         24 %
     Corporate                                 (28.2 )            (27.1 )       (4 %)
     Total operating income            $        14.5      $         7.9         84 %
     Net income                        $         8.9      $         5.3         68 %

Our Live and Televised Entertainment segment revenues increased primarily due to the success of our live events in the current quarter, partially offset by a decline in pay-per-view related revenue. Our Consumer Products segment incurred a 25% decline in licensing revenue, reflecting a decrease in the sale of toys and videogames. WWE Studios revenue primarily reflects amounts earned from our previously released feature films, The Marine, See No Evil and The Condemned, and vary based upon the receipt of participation statements from our distribution partners.

Improvements in profit margin were generated by our live events and pay-per-view businesses in the third quarter, partially as a result of management's increased focus on reducing costs. The improved margins, in conjunction with modest revenue gains, resulted in an 84% increase in operating income as compared to the prior year quarter.

The following chart reflects comparative revenues and key drivers for each of the businesses within our Live and Televised Entertainment segment:

                                                               September 30,        September 30,        better
Live and Televised Entertainment Revenues                          2009                 2008            (worse)
Live events                                                   $          27.2      $          20.3         34 %
    Number of North American events                                        77                   77          -
    Average North American attendance                                   5,800                5,300          9 %
    Average North American ticket price (dollars)             $         36.26      $         38.21         (5 %)
    Number of international events                                         17                   12         42 %
    Average international attendance                                    9,100                6,600         38 %
    Average international ticket price (dollars)              $         65.59      $         80.68        (19 %)

Venue merchandise                                             $           4.3      $           4.2          2 %
    Domestic per capita spending (dollars)                    $          8.71      $          9.83        (11 %)

Pay-per-view                                                  $          14.5      $          16.4        (12 %)
    Number of pay-per-view events                                           3                    3          -

    Number of buys from pay-per-view events                           836,000              926,000        (10 %)

    Average revenue per buy (dollars)                         $         16.84      $         17.17         (2 %)
    Domestic retail price (dollars)                           $         39.95      $         39.95          -

Television rights fees
    Domestic                                                  $          18.4      $          15.4         19 %
    International                                             $           9.9      $           9.0         10 %

Television advertising                                        $           2.4      $           2.0         20 %

WWE Classics On Demand                                        $           1.2      $           1.4        (14 %)

Total                                                         $          77.9      $          68.7         13 %

Ratings
    Average weekly household ratings for Raw                              3.8                  3.1         23 %
    Average weekly household ratings for SmackDown                        2.0                  2.4        (17 %)
    Average weekly household ratings for ECW                              1.3                  1.4         (7 %)
    Average weekly household ratings for WWE Superstars                   1.3                    -           n/m



                                                          September 30,        September 30,        better
Cost of Revenues-Live and Televised Entertainment             2009                 2008            (worse)
 Live events                                             $        19.5        $        15.6          (25 %)
 Venue merchandise                                                 2.3                  2.7           15 %
 Pay-per-view                                                      6.1                  8.1           25 %
 Television                                                       16.1                 18.1           11 %
 Advertising                                                       0.4                  0.2         (100 %)
 WWE Classics On Demand                                            0.2                  0.3           33 %
 Other                                                            (0.3 )                2.0          115 %
 Total                                                   $        44.3        $        47.0            6 %
    Profit contribution margin                                      43 %                 32 %

Live events revenues increased primarily through the success of our international events which generated approximately $5.8 million of additional revenues. There were five additional international events in the current quarter as compared to the prior year. The quarter-over-quarter increase reflected a 38% increase in average attendance to approximately 9,100 from 6,600, partially offset by a 19% reduction in average ticket prices to $65.59. Average attendance at our North American events was approximately 5,800 in the current quarter as compared to 5,300 in the prior year. The average ticket price for North American events was $36.26 in the current quarter as compared to $38.21 in the prior year. The total profit contribution margin for live events was 28% as compared to 23% in the prior year quarter. In the prior year, four of the 12 international events performed were recorded as buy-out deals that provided minimum guarantees of profit for WWE. In the current year, it was determined that these four events should have been recorded on a gross basis. Had these events been recorded on a gross basis, revenues and expenses would have each increased by approximately $1.6 million in 2008, with no change to profit. See Note 1 to the unaudited Consolidated Financial Statements.

Venue merchandise revenues increased 2% from the prior year quarter primarily due to an increase in international licensing revenues, partially offset by an 11% decrease in per capita merchandise spending by our fans at North American events. The profit contribution margin increased from 35% to 47% in the current quarter due to decreased costs of material and lower building share expenses.

Pay-per-view revenues decreased $1.9 million in the current quarter which reflects a 10% decline in total buys and a higher percentage of international buys, which are generally lower in price. There were three pay-per-view events in both the current and prior year quarters. Pay-per-view buys for SummerSlam, a historically strong buy producing pay-per-view event, decreased approximately 23% in the current quarter. Pay-per-view profit contribution margin increased from 51% to 58% in the current quarter due to lower advertising and production related costs.

WWE Classics On Demand, our subscription based video-on-demand service, reflected a 14% decrease in revenues in the current quarter based on weaker international performance.

Television rights fees reflects rate increases both in domestic and international markets as well as the addition of our new domestic show, WWE Superstars, on WGN, which began airing in April 2009. Television cost of revenues has declined based upon cost containment improvements. The profit contribution margin increased from 26% to 43% in the current quarter.

The following chart reflects comparative revenues and certain drivers for selected businesses within our Consumer Products segment:

                                   September 30,        September 30,        better
Consumer Products Revenues             2009                 2008            (worse)
Licensing                         $           7.9      $          10.6        (25 %)
Magazine publishing               $           3.4      $           4.7        (28 %)
    Net units sold                        987,700            1,435,500        (31 %)
Home video                        $          11.2      $          11.0          2 %
    Gross units shipped                   846,573              724,386         17 %
Other                             $           0.5                  0.3         67 %
Total                             $          23.0      $          26.6        (14 %)



                                           September 30,        September 30,        better
Cost of Revenues-Consumer Products             2009                 2008            (worse)
Licensing                                 $         1.8        $         2.6           31 %
Magazine publishing                                 3.0                  3.5           14 %
Home video                                          5.3                  4.0          (33 %)
Other                                               0.3                  0.1         (200 %)
Total                                     $        10.4        $        10.2           (2 %)
    Profit contribution margin                       55 %                 62 %

Licensing revenues decreased by 25% in the current quarter, reflecting lower royalties earned on the sales of toys and videogames of approximately $1.4 million and $1.2 million, respectively. Our toy license with Jakks Pacific LLC expires on December 31, 2009 and our new multi-year agreement with Mattel begins on January 1, 2010.

Magazine publishing revenues declined based on the publication of one fewer issue of WWE Magazine in the current quarter in conjunction with a decrease in the average number of units sold at newsstand. Magazine publishing cost of revenues decreased primarily due to lower paper, printing and engraving costs based on the number of issues produced, as compared to the prior year.

Home video revenues increased by 2% in the current quarter, based on the performance of our catalog and pay-per-view event titles. Home video cost of revenues reflects an increase in expenses associated with duplication and talent royalties based on the increase in units sold. Profit contribution margin was 53% in the current period as compared to 64% in the prior year quarter, reflecting changes in the product mix and our distribution costs.

The following chart provides performance results and key drivers for our Digital Media segment:

                                                September 30,        September 30,        better
Digital Media Revenues                              2009                 2008            (worse)
WWE.com                                        $           4.5        $         4.0         13 %
WWEShop                                                    2.9                  3.9        (26 %)
    Average revenues per order (dollars)       $         50.46        $       54.72         (8 %)
Total                                          $           7.4        $         7.9         (6 %)



                                       September 30,         September 30,         better
Cost of Revenues-Digital Media              2009                  2008            (worse)
WWE.com                               $        2.0            $      2.6             23 %
WWEShop                                        2.2                   3.1             29 %
Total                                 $        4.2            $      5.7             26 %
    Profit contribution margin                  43 %                  29 %

WWE.com revenues increased primarily due to additional advertising sold on our website and higher syndication related revenue. The decrease in WWE.com cost of revenues reflects lower support costs to operate our various web-based activities.

WWEShop revenues declined due in part to a 22% reduction in the number of orders processed to approximately 55,000 in the current quarter. In addition, the average amount spent by customers per order declined by approximately 8% to $50.46 in the current quarter.

WWE Studios

We recorded revenue of approximately $3.0 million in the current quarter related to our prior theatrical releases as compared to $5.6 million in the prior year quarter. We participate in revenues generated under the distribution of the films through all media after the print and advertising and distribution costs incurred by our distributors have been recouped and the results have been reported to us.

During the first quarter of 2009, we released our fourth feature film, 12 Rounds, as well as a Direct-to-DVD film, Behind Enemy Lines: Colombia. 12 Rounds generated approximately $12.2 million in gross domestic box office receipts and was released domestically on DVD on June 30, 2009. Based on this timing, no revenues have been recorded for 12 Rounds and approximately $0.2 million has been recorded for Behind Enemy Lines: Colombia.

Selling, General and Administrative

   The following chart reflects the amounts and percent change of certain
significant overhead items:

                                               September 30,        September 30,        better
                                                   2009                 2008            (worse)
Staff related                                 $        17.9        $        13.7          (31 %)
Legal, accounting and other professional                4.1                  4.7           13 %
Stock compensation costs                                2.6                  2.2          (18 %)
Advertising and promotion                               0.5                  1.6           69 %
All other                                               8.0                  9.1           12 %
Total SG&A                                    $        33.1        $        31.3           (6 %)
SG&A as a percentage of net revenues                     30 %                 29 %

The increase in staff related costs reflects additional amounts accrued for employee related bonuses based on the Company's operating performance to date. Stock compensation expense has also increased as additional shares are expected to be issued, due to the Company's operating performance to date. Legal, accounting and professional fees declined primarily as a result of decreased legal activity. Advertising and promotion costs reflect lower domestic and international spending as compared to the prior year.

                                                            September 30,          September 30,        better
                                                                 2009                  2008            (worse)
Depreciation and amortization                             $              3.6      $         3.3           (9 %)

Investment income, net                                    $              0.7      $         1.3          (46 %)

The decrease reflects lower interest rates on investments.

Other income (expense), net $ 0.2 $ (1.4 ) 114 %

Other income (expense), net includes realized foreign exchange gains and losses and the revaluation of warrants held in certain licensees.

                                          September 30,         September 30,
                                               2009                  2008
         Provision for income taxes      $        6.3          $        2.5
         Effective tax rate                        42 %                  32 %

The effective tax rate reflects differences between the taxes provided for as compared to actual amounts calculated on returns for both periods.

Nine Months Ended September 30, 2009 compared to Nine Months Ended September 30,

2008
(Dollars in millions, except as noted)

Summary

                                    September 30,        September 30,        better
Net Revenues                            2009                 2008            (worse)
Live and Televised Entertainment   $         251.2      $         255.3         (2 %)
Consumer Products                             77.0                102.4        (25 %)
Digital Media                                 22.2                 23.9         (7 %)
WWE Studios                                    7.5                 19.5        (62 %)
Total                              $         357.9      $         401.1        (11 %)



                                    September 30,         September 30,         better
Cost of Revenues:                       2009                  2008             (worse)
 Live and Televised Entertainment  $       144.9        $         174.7           17 %
 Consumer Products                          30.7                   39.9           23 %
 Digital Media                              13.0                   14.9           13 %
 WWE Studios                                 3.7                   13.2           72 %
 Total                             $       192.3        $         242.7           21 %
 Profit contribution margin                   46 %                   39 %



                                   September 30,         September 30,         better
Operating Income:                       2009                  2008            (worse)
Live and Televised Entertainment  $         93.3        $         69.1           35 %
Consumer Products                           42.1                  57.2          (26 %)
Digital Media                                3.3                   4.7          (30 %)
WWE Studios                                  2.6                   5.0          (48 %)
Corporate                                  (82.0 )               (89.0 )          8 %
Total operating income            $         59.3        $         47.0           26 %
Net income                        $         39.1        $         31.8           23 %

Our Live and Televised Entertainment segment revenues were 2% lower than the prior year period as the decline in pay-per-view revenue was only partially offset by higher television rights fees. Our Consumer Products segment reflected a 33% decrease in home video revenue and a 20% decrease in licensing based revenues. Digital Media reflected decreased WWEShop revenues of approximately 18% in the current period. The decline in WWE Studios revenues reflects the timing of payments received from our distribution partners, based on the release dates of our feature films.

Operating income increased by 26% over the prior year period based on the improved profit margins across various lines of business, partially as a result of increased focus on cost reduction initiatives.

The following chart reflects comparative revenues and key drivers for each of the businesses within our Live and Televised Entertainment segment:

                                                          September 30,       September 30,       better
Live and Televised Entertainment Revenues                     2009                2008           (worse)
Live events                                              $          79.6     $          80.2        (1 %)
    Number of North American events                                  211                 195         8 %
    Average North American attendance                              6,500               6,300         3 %
    Average North American ticket price (dollars)        $         38.23     $         41.51        (8 %)
    Number of international events                                    48                  51        (6 %)
    Average international attendance                               8,500               8,500         -
    Average international ticket price (dollars)         $         63.93     $         84.60       (24 %)

Venue merchandise                                        $          15.2     $          15.0         1 %
    Domestic per capita spending (dollars)               $          9.76     $         10.64        (8 %)

Pay-per-view                                             $          63.7     $          75.5       (16 %)
    Number of pay-per-view events                                     10                  10         -

    Number of buys from pay-per-view events                    3,473,200           4,022,900       (14 %)

    Average revenue per buy (dollars)                    $         17.82     $         18.45        (3 %)
    Domestic retail price WrestleMania (dollars)         $         54.95     $         54.95         -
    Domestic retail price other events (dollars)         $         39.95     $         39.95         -

Television rights fees
    Domestic                                             $          52.5     $          45.6        15 %
    International                                        $          29.0     $          27.5         5 %

Television advertising                                   $           5.5     $           5.3         4 %

WWE Classics On Demand                                   $           4.2     $           4.8       (13 %)
Other                                                    $           1.5     $           1.4         7 %
Total                                                    $         251.2     $         255.3        (2 %)

Ratings
    Average weekly household ratings for Raw                         3.3                 3.4        (3 %)
    Average weekly household ratings for SmackDown                   2.0                 2.5       (20 %)
    Average weekly household ratings for ECW                         1.3                 1.3         -
    Average weekly household ratings for WWE Superstars              1.4                   -          n/m



                                                     September 30,         September 30,        better
Cost of Revenues-Live and Televised Entertainment         2009                 2008            (worse)
Live events                                         $         53.9        $        56.2            4 %
Venue merchandise                                              8.7                  9.1            4 %
Pay-per-view                                                  26.6                 43.8           39 %
Television                                                    50.8                 57.6           12 %
Advertising                                                    0.6                  0.6            -
WWE Classics On Demand                                         1.0                  1.4           29 %
Other                                                          3.3                  6.0           45 %
Total                                               $        144.9        $       174.7           17 %
    Profit contribution margin                                  42 %                 32 %

Live events revenues declined slightly as compared to the prior year, as increased North American event attendance was more than offset by lower average ticket prices. The overall profit contribution margin was 32% in the current period as compared to 30% in the prior year. In the prior year, 14 of the international events performed were recorded as buy-out deals. In the current year it was determined that these 14 events in 2008, and four events in 2009 should have been recorded on a gross basis. Had these events been recorded on a gross basis, revenues and expenses would have each increased by approximately $5.0 million in 2008 and approximately $1.3 million in 2009, with no change to profit. See Note 1 to the unaudited Consolidated Financial Statements.

. . .