Talks between NFL Players Association representatives and the Management Council broke down yesterday over a union demand that player representatives be paid for a full season even if they are released. It also was disclosed that owners are negotiating with at least two banks for strike insurance in excess of $100 million.

Meanwhile, Redskins General Manager Bobby Beathard, speaking on a local radio show, said one result of unrestricted free agency would be a shrinkage in the number of NFL franchises and a "player glut" for a few select teams.

His comments came on a day when the union and owners broke off talks to try to avert a players' strike, which likely would occur within the first three weeks of the season.

"Jack {Donlan, executive director of the Management Council} is on his way back to New York," management spokesman John Jones said. Donlan and Gene Upshaw, executive director of the NFLPA, did not meet in person but spoke by telephone for 90 minutes yesterday.

Reached late yesterday, Donlan said he has discussed getting strike insurance with owners "until blue in the face," and has guarantees with "at least two lending institutions who are prepared to do the deal" for "well over $100 million."

The owners will meet Sept. 10, Donlan said, to vote on which proposal to take.

Yesterday's phone discussion deteriorated because of the union's demands that player representatives be protected against arbitrary release by management, according to each side. Tuesday, the New England Patriots traded Brian Holloway, the team's player representative and a union vice president, to the Los Angeles Raiders.

According to the NFLPA, eight player representatives have been traded, forced to retire or cut since the beginning of summer minicamps.

According to Donlan, Jones said Upshaw "indicated that absent pay protection for player reps, he didn't want to meet." Donlan recommended that player representatives who felt they were released without cause go to expedited arbitration for settlement.

"I told Jack Donlan this morning that seeing what is going on out there with my player reps getting cut, I didn't think it was fair to the player reps to continue until we had addressed this proposal," Upshaw told United Press International.

Donlan said he thinks "this whole situation is contrived. We couldn't find them for the last two weeks {before the contract expired Tuesday morning}. We've only had 16 days of negotiation, total, since we exchanged proposals. And most of those were half-days . . . They just plain don't want to meet with us, that's all."

Mark Murphy, the union's assistant executive director, said arbitration was "meaningless" because the players already have that option, and the union was seeking the same protection given shop stewards in other industries.

Beathard's taped commentary ran on WXTR-FM, where he has had a morning radio spot since 1984. Speaking from UCLA, Beathard said the union "has backed itself into a corner" with its two demands for free agency and guaranteed contracts.

"Why do I say that? Because of all the things they're asking . . . Those are the two items that will never fly with the NFL owners. And who can blame them? The structure of the NFL is unique and it's been very successful."

Beathard said if free agency took root in the NFL, only a few choice franchises would get all the quality players. "I don't want to name cities. But there are several that are not as appealing to players as others," he said. "So how do those unattractive franchises compete? They don't."

Some towns would be able to compete for a while, he said, but "after a few seasons of mediocrity, the fans will quit supporting them." As a result, he said, television revenues would fall, leading to an increase in ticket prices, forcing out all but the wealthy fan.

The league would then shrink to between eight and 12 teams, he predicted. "I guess then {fans will} turn to arena football while it's still cheap. Oh, and guaranteed contracts? That's even a bigger joke."

Beathard could not be reached in Los Angeles for further comment.

Murphy said, "I guess the one question I would have is, does Bobby Beathard have a guaranteed contract? . . . To any other individual, it is a given. With NFL players, that's not the case."

To Murphy, Beathard "sounded to me a lot like Chicken Little. The league's going to fall apart and society as we know it will never be the same."

Owners are looking for a base pay scale for first-year players and want mandatory random drug testing.

Donlan said he would now prepare a proposal for possible settlement, though he would prefer negotiations. "We don't know what's important and what's not important," he said. "I'm going to tell them straight out, this is not a take-it-or-leave-it {proposal}, but you better take a good look at it, because we're close."

Asked if the owners' proposal would be final, Murphy said, "No. They'll say it is, but it isn't."

Monday, Upshaw announced the NFLPA's nine-member executive committee had unanimously approved a strike date and would announce the date to the 28 player representatives Sept. 8.

Though San Francisco 49ers quarterback Joe Montana, cornerback Ronnie Lott and kicker Ray Wersching said Wednesday they may cross picket lines if a strike occurs, Murphy said yesterday the union was solid. "That's three people. There's 1,500 people in the union," he said.

At Redskin Park, Redskins player representative Neal Olkewicz said he was not surprised by Montana's and his teammates' comments.

"It's some of the same guys who were not supportive last time," Olkewicz said. "You'll probably hear Danny White say the same thing in the next day or so. It's usually really high-paid players who don't give a damn about everybody else. We don't like it, but we don't have a $100,000 fine like the owners do."

Olkewicz said the union thought things would be settled before now. "Only lately has it appeared like there really will be a strike," he said. "It's not unavoidable, but I am a lot more pessimistic about a settlement than I was, say, six weeks ago."