Federals owner Berl Bernhard and his partners could lose as much as $2 million in the team's first year of operation. Bernhard, however, said the losses were expected and were only slightly higher than predicted before the season opener in March.

"We'll probably lose a little more than we thought, somewhere between $1.6 million and $2 million," Bernhard said.

"We'd predicted about $1.5 million. We came out worse than we thought at the gate, and we didn't expect to be spending so much money on (running back Craig) James. But we underestimated how well we'd do on corporate sponsorships. That helped get us close to the early predictions."

The Federals sold 19,000 season tickets at the start of the season. Officials said the team would break even with an average attendance of 26,000.

But Washington's 3-14 record and a spate of rainy spring weather forced attendance steadily downward after an opening day of crowd of 38,101 sat in the rain to see the Federals play George Allen's Blitz on March 6.

The Federals' next-largest crowd was 13,936 for a Monday night game against the Arizona Wranglers. Three times, fewer than 10,000 people have come to RFK Stadium to watch the Federals, and thousands of season ticket holders have stayed away from games every week.

"I'm not down about these losses," Bernhard said. "We're starting to put a team together and things will get better."

Even while the team itself appears much improved--it has won two of its last three games, including a 28-21 victory over Los Angeles on Sunday--the Federals have a singular financial worry.

With so many people not using season tickets, the Federals will be pressed to attract those same customers next year. Indeed, Bernhard's frequent public declarations that he plans to do all that is necessary to have a winning team next year seem addressed to those very ticket buyers.

Bernhard hopes that the increased financial and executive participation of his general partner, Gordon Davenport, a Chattanooga-based businessman, will enable the team to improve its front office organization and acquire the players the team needs to compete with the league leaders.

Davenport now has a 15 percent share of the team. Bernhard is hoping that will increase. The two have begun a series of meetings concerning the extent of Davenport's participation. Davenport has already begun to interview executives for various positions in the Federals organization.

"I'm looking for more than just money with him (Davenport)," Bernhard said. "He's been almost unconscionably successful in business, so he knows a lot about organization."

Bernhard said the Federals may not fill the position of team president, vacated after Jim Gould's resignation in May. Instead, Bernhard said he may wait for Davenport to bring in an associate.

Bernhard has also held talks with Coach Ray Jauch and General Manager Dick Myers concerning the future of the team. The league has not yet determined what to do about its expansion draft, but as it stands now, the Federals, with the worst record in the USFL, have the top choice for the January draft.

Myers and Jauch have expressed the need for a speedy, deep-threat receiver, a big fullback and general help on defense. The Federals spent $2 million to sign James to a four-year contract and Bernhard said he is prepared to spend a "great deal" if necessary.

Bernhard said, "If a big-name player fits our needs, we might jump, but only if it fits our sense of what we need to win. That's why I want additional sums, to have that ability to attract top players. We're not in a position where we can sell a noncompetitive team. To tread water is useless."