The No. 2 executive with Madison Square Garden, owners of the Washington Diplomats, sharply criticized the North American Soccer League Sunday, calling it the biggest obstacle the corporation has had to deal with since acquiring the team.

Jack Krumpe, MSG vice president, said the NASL is too large and needs to revise its playoff system.

"The league has been the most negative thing we've come across since we've taken over," said Krumpe in an interview prior to the Dips' 5-4 victory over the Toronto Blizzard. "I guess there have to be reasons for why they do things the way they do but I still haven't figured them out."

Krumpe, like his boss Sonny Werblin, president of Madison Square Garden, was noncommital on the future of the Diplomats in Washington. "We still haven't determined whether we just want this to be a NASL franchise or make it an international power," he said. "And we haven't decided yet whether this is the right market for this club."

Wherever the Dips end up, Krumpe said he thinks the 24-team league is much too big.

"The only way to improve this league right now is through attrition of franchises," Krumpe said. $&(WORD ILLEGIBLE $&)See DIPLOMATS, D3, Col. 1> $&(WORD ILLEGIBLE $&)DIPLOMATS, From 1D>

"There should be 10, maybe 12 teams at most, certainly not 24.

"The best thing for this league would be to have 12 franchises, each one committed to budgets of at least $3 million a year. Each and every game should be an event, an extravaganza of some sort.

"Instead of playing two or three games a week and hoping to average 12,000-18,000 fans a game, let's play one or 1 1/2 games a week and try to average 40,000.

"Then when you've got all the teams in the league averaging 40,000 fans a game and making money, they you expand, but not until them."

League Commissioner Phil Woosnam defended recently the league's 1978 expansion from 18 to 24 teams, saying, "In every league you are going to have good franchises and struggling franchies. But the struggling ones learn from the good ones and get better. Any time you expand you are going to have teams in trouble, at least at the start."

In addition, Woosnam defended the 24-team league, saying he believed that 24 was a "good working number for playoffs and for national exposure. It gives us credibility from coast to coast."

Krumpe was critical of an aspect of that national exposure, the league's television contract with ABC-TV.

"I think we sold our souls to national television, and we've gotten very little in return," Krumpe said. "Why should we agree to let them put games on at 2:30 p.m. on Saturday in the middle of the summer? That just isn't worth a darn, it has no dramatic impact at all. Look at the ratings, they've been abysmal.

"What's more I don't think the broadcasting team (Jim McKay, Paul Gardner and Vern Lundquist) is nearly as strong as it should be. I'm not knocking them because I haven't seen them very much. But the first thing the league should have asked for is (Howard) Cosell. The package needs someone strong like him."

"I don't know how to respond to that," league spokesman Jim Trecker said yesterday. "Without saying anything one way or the other about Cosell we think any broadcast team with Jim McKay in it is quite strong. And we exepct better ratings for the playoffs."

The playoffs are another thorn in Krumpe's side, specifically the league's revenue-sharing system. During the regular season the home team keeps the gate receipts from each game. During the playoffs, however, the gate receipts were divided 24 ways, regardless of who advances to the Soccer Bowl and who draws well.

"That really wiped me out," Krumpe said. "The whole thing is ridiculous. Why should we share what we draw for the playoffs with Edmonton? Why should the Cosmos share? They've earned their money, so have we.

"Right now the league is giving the owners of winning franchises no incentive at all to put their best product on the field because there is no gain at all from making money on the playoffs. You have to divide it up."

Trecker said the league looks upon the playoffs, "as a cooperative venture, our showcase. We don't feel anyone should be left out, the revenues should be shared."

In all Krumpe said, Garden management has not yet decided what, if anything, to do about the problems it sees with the NASL.

"For North America this is a major league," Krumpe said. "But in Europe it wouldn't be. It isn't good enough yet and it isn't professional enough yet. We have to build it to that point. I just don't think it's being gone about in the right way right now. This league isn't nearly as profitable as it could be."

Only three teams - San Jose, Edmonton, Memphis - have been eliminated from playoff contention with one week left in the regular season .... Rookie goalie Dragon Radovich, who came into his first NASL game Sunday with the Dips trailing, 3-1 says: "I was surprised Gordon (Bradley) put me in. I thought we still had a chance." And an opponent Peter Lorimer's shot with 17 seconds left that would have tied the game at 5-5: "When it went past me, I had a feeling it would hit the crossbar." (It did.) .... Dips need two road winds - Atlanta, Cosmos - to nail down second best record in National Conference. Minnesota with two home games left is three points bace.... Dips will open playoffs Aug. 15 at Los Angeles or at Dallas with return match at RFK on Aug. 18. CAPTION: Picture, Diplomat Tommy O'Hara, center, puts his arms around teammates Alan Green, left, and Bill Horvath, as they head toward locker room, after 5-4 victory over Toronto Blizzard. By James M. Thresher - The Washington Post