Unhappy cornerback Everson Walls has rejected a new contract by the Dallas Cowboys based largely on incentives. The National Football League club offered its holdout all-pro a renegotiated contract for five years at $1.2 million.

"I'm not going to sign a five-year contract and that is final," Walls said in Dallas. "I'm retired. Nothing has changed."

Cowboys Vice President Gil Brandt yesterday offered some incentives to be paid in 1987, including $6,000 a year for making the all-National Conference team, $10,000 a year for all-NFL, and $16,000 per year for being named defensive player of the year. The bonus would be paid in addition to the $100,000 signing bonus to be paid in 1987.

Meanwhile, at the Cowboys' camp in Thousand Oaks, Calif., John Warren, a rookie from Tennessee, has outkicked four other punters, including South African rugby star Nas Botha, and has given Coach Tom Landry reason to think he can free quarterback Danny White from punting duties.

A scenario that worried Landry for years happened in the National Conference title loss to Washington last January--White was knocked out of the game and could not play in the second half. However, the Cowboys didn't have to punt . . .

The New York Times has reported the U.S. Football League wants to place a franchise in New York City, probably at Shea Stadium. The Times said that Allen G. Schwartz has resigned as the city's sports consultant to represent the USFL in its effort to place a team in New York as early as next season. It could be either an established team or an expansion franchise, according to Schwartz . . . In Seattle, members of a group heading an effort to secure a USFL franchise for Hawaii in 1985 say Seattle is almost certain to be the other city awarded a club for that year. The group trying to land the Seattle franchise is headed by Daryle Lamonica, the former Oakland Raiders quarterback . . .

Denver Broncos punter Luke Prestridge has been hospitalized with a slight kidney malfunction, but says the ailment is "not serious." According to doctors, Prestridge's kidneys are working "about 50 percent" of normal.