Major league baseball received its biggest shock in 12 years yesterday when an arbitrator ruled that the 26 owners conspired to "destroy" free agency after the 1985 season.

The impact of the decision by arbitrator Tom Roberts is unclear since no damages were awarded, but the long-range implications should send a shiver through the power structure of the game.

A grievance was filed by the Major League Baseball Players Association on behalf of 63 players, including Detroit Tigers outfielder Kirk Gibson and California Angels reliever Donnie Moore. The crux of the union's argument was that, after 10 years of free agency, it was no coincidence that no premier player received an offer. The two free agents who did change teams, Juan Beniquez and Dane Iorg, were unwanted by their previous teams.

In his 16-page decision, Roberts wrote that free agents "surely had a value at some price and yet no offers were advanced." He underlined "no" in his ruling.

A similar grievance involving 1986 free agents including Andre Dawson, Tim Raines, Jack Morris and Lance Parrish still is being heard by arbitrator George Nicolau, with a decision expected by early December.

Roberts now will hold hearings to find remedies and possibly award damages to past free agents such as Gibson. It isn't clear what kind of damages could be awarded, although it's generally believed he will award cash, based on what past free agents had gotten.

For instance, a year before Gibson was eligible for free agency, free agent Fred Lynn received a five-year, $6.8 million deal from the Baltimore Orioles. Gibson, age 28 at the time, had 29 home runs and 97 runs batted in during the 1986 season and didn't receive a single offer. He eventually signed a three-year, $3.6 million contract with Detroit.

"We want to comply and we will comply," said Barry Rona, the owners' chief negotiator. "But I can't tell a club to engage in free agency or not."

Donald Fehr, executive director of the players association, said he will seek remedies through money or new free agency opportunities for players already affected, along with punitive damages from the owners.

Fehr also hopes to have remedies for future free agents installed, but that may be difficult to accomplish. Among the players eligible for free agency this winter are the St. Louis Cardinals' Jack Clark, Atlanta Braves' Dale Murphy, Baltimore Orioles' Cal Ripken Jr., Toronto Blue Jays' Jesse Barfield and the New York Yankees' Dave Righetti.

The last time an arbitration decision seemed to level such a blow to the power structure of the game was in 1975, when arbitrator Peter Seitz created free agency by voiding the reserve clause under which players were bound to their teams unless they were traded or released. Salaries rocketed from an average of $52,200 in 1976 to $412,520 last year.

Roberts arrived at his decision after receiving 288 exhibits and 32 days of testimony that filled 5,682 pages of transcripts.

Fehr applauded the decision, saying, "The arbitrator found that the clubs entered into a common scheme, the effect of which was to destroy free agency . . . I think and hope that when they examine this, they will say they can't do business as usual anymore."

Among the strongest evidence Roberts saw was that the Kansas City Royals finished the 1985 season with a strong interest in signing Gibson. But he noted, "the interest of the Royals in Gibson suddenly cooled . . . concurrently with a meeting of the owners at St. Louis, Mo., in October of 1985 and a gathering of the general managers in Tarpon Springs, Fla., during November of 1985."

Two sources have said that Royals minority owner Avron Fogelman was told "by someone representing the commissioner" that if his team signed Gibson he would never be approved as a major owner. Commissioner Peter Ueberroth has denied that Fogelman was threatened.

Roberts also heard about a conversation including three top members of the Orioles' front office -- owner Edward Bennett Williams, General Manager Hank Peters and then-manager Earl Weaver.

In that conversation, Williams is supposed to have asked Peters, "Do you think the commissioner will let us get away with signing {Lance} Parrish?" Peters and Williams have denied the conversation.

The union's strongest evidence was also its weakest: That a group of wealthy businessmen who'd never agreed on much of anything were suddenly agreeing on everything.

"I don't think there was an agreement like that," Williams said. "I never heard of one, and I'd think I would. But we'll abide by the arbitrator's decision."

Roberts' decision ends an odyssey that began 19 months ago with the filing of the grievance. He began hearing the case last summer, but was fired by the owners Aug. 5, 1986, after ruling against them on a drug-testing grievance.

The union filed a grievance over the firing in the middle of a case, and Washington attorney Richard Bloch ruled that the owners had acted improperly.

Owners and agents testified in several cities, and the proceedings concluded with testimony by Ueberroth in Chicago on May 20. The union maintained that the owners were in violation of a portion of the Basic Agreement. That portion -- article 18, section H -- reads: "Players shall not act in concert with other players and clubs shall not act in concert with other clubs."