Peter O'Malley, president of the Washington Capitals, said yesterday he believes the proposed merger of the National Hockey League and the World Hockey Association will be a boon to the sport's popularity and stability.

"In general terms we'll do very well because the sport is going to do very well," O'Malley said. "I think there is a commitment by the NHL to restore quality minor-league play."

"In general terms we'll do very well without a league next year could become part of an expanded minor-league hockey system, O'Malley said. Such a system would allow the NHL to concentrate more on player development and give the sport greater exposure around the country.

Last week, after six years of interleague bidding wars for players that drove up salaries and contributed to the folding of some clubs, the NHL unveiled a plan to assimilate the WHA over the next few years.

It is expected that at least six of the 11 WHA clubs will be incorporated into the NHL under the proposed that calls for them to play games among themselves in a separate WHA division of the NHL next season. The top four teams would join the top 12 in the NHL in the Stanley Cup playoffs.

Schedules would be intergrated over the next four years, then the league would be realigned.

"The resolution of various points of views among both leagues, the teams and the players' association is going to require some compromise," O'Malley said. The players' rights have not been determined and they've got to be."

The owners and the players' association have scheduled a July 13 meeting to iron out several matters, including the equalization clause as it applies to free agents.

In Toronto yesterday, NHLPA executive director Alan Eagleson said the players and owners "have a great deal of hard negotiating." His group, he said wants the equalization formula altered before agreeing to expansion.

The six WHA clubs expected to be in the new NHL division next season are the New England Whalers, the Quebec Nordiques, the Edmonton Oilers, the Winnipeg Jets, the Cincinnati Stingers and the Houston Aeros.

The owners of the Birmingham Bulls and Indianapolis Racers have said they will apply to become NHL franchises, but indications are their chances are slim.

O'Malley would not speculate on which teams might apply to join the NHL and which may be accepted. "Their financial stability will be a key and we'll have to look at their (arena) seating capacity," he said.