BASEBALL DAILY REPORT

With baseball’s owners tentatively planning legal action if there is no labor agreement by mid-August, negotiators met for several hours but were unable to resolve what has become the pivotal issue--the union’s desire for a second tax-free year at the end of a proposed six-year contract.

The union wants 2000 and 2001 to be devoid of the payroll luxury tax that would be in effect for three years, starting in 1997. Management has agreed to no tax in 1996 and 2000, but won’t give up 2001.

If there is no agreement by mid-August, sources said, management is prepared to ask U.S. District Court Judge Sonia Sotomayor to lift the injunction she granted on March 31, 1995. The injunction reinstated the expired work rules and ended the players’ strike.