Struggling Kings Lost Far More Than Games : Hockey: Team documents show an $8-million operating loss.

The Kings, who a year ago faced what one bank lawyer called a financial “nuclear meltdown,” reported an operating loss of $8 million last season, internal documents revealed on Wednesday.

The team, whose financial statements have been made available to potential buyers, showed a net loss of about $18 million last season, which includes account interest, amortization and depreciation, a source told The Times.

After viewing the Kings’ financial records, one source called the franchise “radioactive.” Internal King documents dated May 18 and circulated to prospective buyers paint a dire picture of the period from June 1, 1994 to March 31, 1995.

Of immediate concern are unpaid payroll taxes of $1.9 million. Another factor is Wayne Gretzky’s contract. Although a large amount of Gretzky’s contract is deferred until after he retires, his deal is structured so that he receives payments of $1 million at the end of June and $1 million at the end of July.

There is further potential added cost to the purchase price of the team. Sources familiar with Gretzky’s contract say the star has a provision to greatly accelerate deferred compensation payments in the event of a sale.

The franchise’s financial status, of course, was greatly affected by the NHL’s labor dispute with its players, leading to a 103-day lockout. Also, a high payroll, an unfavorable lease and the team’s missing the playoffs combined to exacerbate the situation.

Other teams suffered as well this past season. In Winnipeg, it has been reported that the Jets have lost as much as $12 million (Canadian). Last week, the owners of the Whalers told the Hartford Courant that the franchise suffered a net loss of $11.5 million.

In contrast, according to sources, the Mighty Ducks showed about a $9-million profit in their first season in the league--under calm labor conditions, a low payroll and a favorable lease deal at The Pond of Anaheim.

In a filing with the Securities and Exchange Commission, Disney said there were unspecified operating losses at Disney Sports Enterprises (the Ducks) for the six-month fiscal period ending March 31. But the Ducks still expect to turn a smaller profit for this past season despite the lockout, a source said.

A little more than a year ago, the Kings were on the verge of bankruptcy during Bruce McNall’s efforts to sell 72% of the team to Jeffrey Sudikoff and Joseph Cohen.

Cohen was not available for comment on Wednesday but has consistently refused to speak about any aspect of the pending transaction or other legal matters. A King spokesperson declined comment as well.

Sudikoff and Cohen for months had been saying they had no intention of selling the team. But in mid-May, Sudikoff and Cohen issued a statement, acknowledging an offer to purchase 100% of the team by an investment group led by Colorado billionaire Philip F. Anschutz and Southern California developer Edward P. Roski Jr.

The sale of any part of the team has been stalled by a request last week for an emergency application for a temporary restraining order by L.A. Kings, Ltd., the remaining 28% of the team controlled by McNall’s bankruptcy trustee, R. Todd Neilson. U.S. Bankruptcy Court Judge Lisa Hill Fenning did not grant the order but got the parties to agree to put the matter on hold until a hearing this morning.

One lawyer with more than 20 years of experience in sports transactions said there has never been a deal quite this complex and unusual. And no one is willing to predict what will happen in the hearing other than to say that Anschutz and Roski appear to be in the best position.

One source contended that a smaller piece of the franchise could be sold. Last week, Laker and Forum owner Jerry Buss advanced the Kings $500,000 in Senate Seat funds to keep the franchise operational and could do so again if there is another roadblock.

A King spokesman did say that playoff refunds will be issued to season-ticket holders once there is a sale agreement. Fans were asked to pay a 75% down payment late in the season to secure playoff tickets. As occurred last season, the Kings missed the playoffs, this time on the season’s final day. Refunds were sent to the fans six weeks after the team’s final game and continued through last summer.

* Times staff writer Robyn Norwood contributed to this story.