Everyone Sits Over Two Words : Key issue: Eligibility for salary arbitration has placed baseball in limbo while owners and the players’ union argue.

Baseball players sit home or in meetings with Don Fehr, executive director of the Major League Players Assn.

Owners sit in offices, tending to other businesses. Or in meetings with Charles O’Connor, the Player Relations Committee’s general counsel.

Baseball parks sit empty and fans sit in limbo.

Everyone sits because of one issue that keeps management and the union from reaching a collective bargaining agreement: eligibility for salary arbitration. Or, to be precise, one year of eligibility.

Salary arbitration. Two words worth millions of dollars and a shortened baseball season.

Arbitration is the vehicle for players and owners who can’t agree on a salary figure to resolve differences through an independent arbitrator.

Under terms of the 1985 baseball agreement, players with three years of major league experience could argue for a greater salary than offered by management. They submit to an arbitrator a proposed salary figure and justification for that salary. Use of comparative statistics for players in similar positions is the basis for most arguments--and judgments.

Management comes to the arbitrator’s table armed with its own arguments and proposed salary.

The arbitrator absorbs the information, studies and decides on one of the figures. There is no in between.

So, why stop work over one year of eligibility?

It is an $8-$12 million question.

That is the estimated amount it will cost owners to reduce eligibility from three to two years, which the union is demanding. About 80 players would be affected this year.

Owners argue that a player’s career is divided into two segments: the first three years, during which management controls the salary; and the rest of his career, in which the player is in control.

Players rebut that the average baseball career lasts fewer than six years, so there is not much time to enjoy healthy paydays.

Arbitration, owners contend, has been more responsible for rapidly escalating salaries than free agency. And they point to the latest round as a prime example. For the 162 players who filed for arbitration after the 1989 season, the average salary more than doubled, including those players who reached agreement before the actual hearing and the 10 who lost their cases. The combined salaries of those 162 players was $68,385,878 in 1989. It was increased to $138,035,916.

The 10 players who lost cases realized a cumulative salary increase of 110%.

According to the owners’ Player Relations Committee, the average salary for players with more than two but less than three years of major league service is $222,348. The union says that in 1989 it was $219,136 and that it has gone down 41% since 1985, while industry revenue has increased more than $500 million in that time.

Players argue that regardless of years of service, they should be paid commensurate with their achievements and competitively with other players who have similar statistics.

Management argues that two years is not enough to establish a pattern of consistency, to compare worth with someone who has more experience.

In the latest proposal to the players, management made several concessions but held firm on the issue of arbitration eligibility.

The union, perhaps fittingly, made a counterproposal, offering to submit the salary arbitration issue to, yes, binding arbitration.

The owners, perhaps fittingly, so far have not accepted it.

THE ISSUES Key elements of the latest proposal that was refused by the players’ union:

* Salary arbitration: The owners offered no concessions and held firm on the three-year salary arbitration issue. Under those terms, players must have completed three years of service before being eligible for salary arbitration. The union conceded the issue in 1985, when players were required to have two years of service.

* Roster size: The owners offered to meet the players’ demand of 25-man rosters beginning in 1991. Present roster size is 24.

* Minimum salary: The owners offered to increase the minimum wage to $100,000, same as their previous proposal. The players had sought $105,000.

* Pension fund: The owners offered to contribute $55 million per year to the players’ pension fund, an increase of $5 million over their previous proposal. The players had sought $57 million.