The sports world went agog last week when the nation's biggest brokerage firm -- Merrill Lynch, Pierce, Fenner & Smith -- said it was considering buying the Chicago White Sox, then syndicating shares in the club to interested Chicago investors.

Today Merrill Lynch backed out of the deal.

When we looked into it, we found there were not many tax advantages we could pass along to investors," said William Clark, a spokesman for the brokerage firm.

Clark said the firm approached the deal as it approaches all others. "We asked for the facts and figures so we could evaluate them. Then the news came out that we were thinking about buying them and it got splashed across the sports pages all over the country.

"We got on the hook last week. So we had to get off the hook," he said.

Bill Veeck, who heads a group of investors who bought the South Side team five years ago, has had the White Sox on the block for several months and at least three other groups are interested in purchasing the team. The Sox last won an American League pennant in 1959 and is now mired in fifth place in the western division, 25 1/2 games behind Kansas City.