Teams here lose millions in ongoing labor disputes; continuing baseball, hockey disputes mean losses mount.

Losses are mounting for the owners of Los Angeles Dodgers and Kings, two of the country's richest professional sports teams, which have been shut down by labor disputes between players and management.

Though it is unlikely either franchise would file for bankruptcy, sports business experts said the organizations are likely down to surviving day-to-day on the expectation that the disputes will be resolved.

One national analyst said that because the two teams have been so successful, they are probably affected more by the disputes than less-successful franchises and the losses are now easily in the tens of millions of dollars.

Both the baseball Dodgers and the hockey Kings are private businesses and therefore are not required to release financial information. Officials from the Dodgers did not return a phone call for comment. A spokesman for the Kings' management responded to questions about the financial health of the franchise but he declined to reveal specifics.

From available estimates through published reports and experts, the Dodgers have so far lost about $26 million in expected revenue due to the ongoing players strike that started in August and resulted in the cancellation of about one-third of the 1994 Major League Baseball season.

Dodgers profit

For the 1993 season, it's estimated that the Dodgers, which are owned by the O'Malley family, had total revenue of close to $80 million and operating expenses of almost $69 million. The team had an estimated value of about $138 million.

This past fall, Los Angeles Dodgers Inc., the operating entity of the team, borrowed $20 million from the club's line of credit with a Los Angeles bank. And before that, the team eliminated 20 front office jobs and cut salaries by between 10 percent and 15 percent.

Like the Dodgers in baseball, the Kings franchise has been considered one of the richest and most valuable in the National Hockey League. For the past few seasons, the team sold out just about every home game at the Great Western Forum in Inglewood.

And hockey in general was on a roll with more fans and a new national television contract until the owners locked out the players in a labor dispute just before the start of the current season in early October. So far, no games have been played and the 1994-95 season is in danger of being canceled entirely.

From available published information, the Kings franchise has so far lost about $14 million in expected revenue in the lock-out.

At the end of the 1992-93 season in which the team went to the Stanley Cup championship, the Kings organization had total revenues of $44 million and estimated operating expenses of $37 million.

The franchise's estimated value at the end of the 1993-94 season was $85 million.

Rick Minch, a spokesman for the Kings, would not release specific figures but said the team lost money following the 1993-94 season, even though nearly every home game was a sellout.

Unlike the other major sports of football, baseball and basketball, hockey depends more on ticket sales for revenue because the NHL does not have a huge national television contract.

Minch said there have been no layoffs among the organization's 40 full-time employees. "We've all received our full salaries," he said.

However, Minch said he didn't know where revenues were being generated since the team is not producing any income from tickets, television or merchandise.

Ownership shifts

The majority owners of the Kings are Jeffrey Sudikoff and Joseph Cohen, two Los Angeles businessmen. A minority interest in the team is held by former owner Bruce McNall, who has pleaded guilty to federal charges of bank fraud. McNall sold his interest in the team to Sudikoff and Cohen earlier this year, well before the dispute.

Sports industry experts said the longer the disputes last, the longer it will take the teams' business operations and values to recover. They said the value of the Dodgers and Kings has undoubtedly declined steeply since the start of the disputes.

Timothy Mueller, who assesses the value of professional sports teams for the accounting firm of KPMG Peat Marwick in New York, said valuable franchises like the Dodgers and Kings have probably been hurt more than other teams.

Among the 28 Major League Baseball teams, the Dodgers are considered among the five most valuable teams. Of the 24 NHL teams, the Kings are also considered among the five richest franchises.

"The way it's working out is the teams that aren't so successful as business operations are losing less in these strikes than the ones that are more successful," said Mueller. "The more successful franchises are having a hard time."

Another industry expert who does valuations of professional sports teams, Michael Megna of Megna Valuations Inc. in Milwaukee, said it may take two or three years for franchises to recover from such extended job actions.