The Arizona Outlaws have reached an agreement in principle on a two-year contract with all-America defensive lineman Tony Casillas of Oklahoma, their No. 1 pick in this year's U.S. Football League draft.

Bill Tatham Jr., Outlaws president, said he agreed Wednesday to a final counterproposal made by Casillas and the player's agent, John Maloney. The package deal, valued at more than $1 million, involves guaranteed money and undetermined real estate in California, Tatham said.

The Atlanta Falcons also made Casillas their top pick in the NFL draft, but Casillas said Monday he was disappointed in the Falcons' attempts to sign him . . .

An economist testifying for the USFL said she did not believe that team operating costs would escalate because of the league's decision to compete with the NFL for the fall market.

Nina Cornell testified in the trial of the USFL's antitrust suit in which damages being asked by the USFL could amount to $1.69 billion. Questioned by NFL attorney Robert Fiske, Cornell said that a study she did for the USFL showed there would be no increased player costs because of the move to compete with the NFL.

Fiske cited testimony given earlier in the trial by USFL Commissioner Harry Usher and former NFL Players Association Executive Director Ed Garvey, who both said player costs would go up when more than one league was playing.