Although attendance is up and there is the security of a new four-year contract with CBS, the National Basketball Association still is concerned about its financial stability.

Commissioner Larry O'Brien today denied published reports that the Denver and Utah franchises are considering merging, but admitted that several teams are in financial distress.

"Obviously not every franchise is doing as well as we'd like," he said, "but there has been no specific proposals of any kind regarding merger."

Sam Battistone, co-owner and president of the Utah Jazz, would not comment on reports that he had inquired what steps would have to be taken to begin negotiations with Denver about a possible merger.

The stories circulating here are that the Jazz would sell its two top players, Adrian Dantley and Darrell Griffith, then move to Denver. The combined team would continue to get both first-round draft choices and two shares of the revenue from CBS. Carl Scheer, Denver's president and general manager, would run the team and Battistone would become a partner.

Neither Scheer nor Battistone would confirm the reports, but Scheer admitted there had been some talk with Battistone.

"I think it's very clear that things are upbeat," O'Brien said when asked about the general status of the league at the midpoint of the season. "Attendance is up almost 10 percent (8.6), the television ratings are up for the third straight year and we're extremely pleased with our new contract with CBS."

O'Brien announced that the league has reached an agreement with two cable networks, ESPN and USA, for the next two seasons. Each network will carry 40 regular-season games and 10 playoffs. USA's games will be on Thursday night and ESPN's Sunday nights.

"It was our hope that we could increased our current revenue from cable five times, but we even exceed that," O'Brien said. "I would say we've increased sevenfold. It's the best cable payment in the history of sports and far beyond any TV package we've had in the past."

Although there was no mention of a possible strike, O'Brien admitted that he anticipates very difficult negotiations when the Players Association contract expires at the end of the season.

"There is no question that we're going to face problems when we engage in collective bargain sessions this summer," he said. "We anticipate intense and prolonged bargaining."

When asked about specific problem areas, O'Brien reiterated that several teams are losing money and aren't going to want to increase their financial obligations. He also alluded to the possible National Football League strike over the players' demand for a percentage of team revenue.

"You wouldn't believe it," he said. "The players' share of league revenue is astounding."

O'Brien said he wasn't distressed over the type of ownership that has come into the league recently, specifically Ted Stepien at Cleveland and Donald Sterling at San Diego.

The league had to step in and tell Stepien that he couldn't make any more trades without its approval last season after the owner traded away his No. 1 draft choices for the next five years.

The last-place Cavaliers are 22nd in the league in attendance with an average of 6,287 a game. Stepien fired Don Delaney as coach in December and has been feuding with Delaney's replacement, Chuck Daly. The owner said recently that he wasn't going to made any more deals and that Daly had the talent to win.

Sterling asked to speak at the advisory committee meeting here last night about his financial problems, but would not say today what was discussed.

"He said that he's not looking to sell the team and not looking for any partners," said O'Brien. "As far as I'm concerned, there is no problem."

The 47-year-old Beverly Hills, Calif., attorney's worth was reported at $700 million when he purchased the team from Irv Levin last spring for a reported $13.5 million.

The Clippers, last in the Pacific Division with a 13-30 record, have the lowest attendance in the league, an average of 5,293. They recently laid off six marketing and other staff members and cut back on scouting and other expenses.

"Nobody's as stupid as me," Sterling said when asked if he was looking for partners. "Nobody is going to invest in this team."

The league reported that 15 of the 23 teams have increased their attendance from this time last year, with New Jersey showing the largest gain, an average of 13,335 at its new arena compared with 6,792 last season.

Detroit, fortified by rookie standouts Isiah Thomas and Kelly Tripucka, has raised its crowds an average of 4,757 a game. Philadelphia, Houston and Los Angeles crowds are up more than 2,200 a game. Washington is averaging 8,074 compared with 7,451, a boost of 623 over the same 22-game period last season.