Al Michaels and ABC Sports kissed and made up yesterday, and, in the process, Michaels became the highest-paid sports announcer in television.

Early last night, the network announced a contract extension that sources said would keep Michaels at ABC through at least the end of 1995 and would pay him at least $2.2 million annually with the potential to earn more. His old contract was to expire in late 1992.

Thus, ABC has both Michaels and Brent Musburger, who was fired by CBS Sports on April 1, signed to long-term contracts, a move Musburger praised last night.

Musburger's behind-the-scenes feud with CBS Sports management ended with an acrimonious separation, Musburger contending CBS never intended to rehire him. But Michaels's decision to take ABC to arbitration -- claiming the network breached his contract by briefly suspending him without pay for violating the network's nepotism rule -- concluded with ABC issuing a glowing statement of Michaels.

The network also described the nepotism issue as "a minor internal personnel matter {which} has been resolved to the satisfaction of Mr. Michaels and ABC Sports." Michaels hired his daughter as a messenger for the network during the World Series.

"The totality {of the deal} is a great contract, a great contract," said Art Kaminsky, Michaels's attorney-agent. "He's delighted. He has a grin from ear to ear."

Michaels was unavailable for comment, as were ABC officials.

Musburger and Michaels had been making about $1.8 million annually, according to sources.

There had been speculation since CBS fired Musburger that, if Michaels won the arbitration case, he would join CBS as its lead baseball announcer, a role that had been assigned to Musburger. ABC Sports President Dennis Swanson always has contended he wanted to keep the Emmy-winning Michaels.

Their assignments at ABC do not conflict. "He was never offered what Al does," said Todd Musburger, Brent's brother and agent.

"I'm glad they kept him. That's what they said they were going to do all along," Brent Musburger said. "Some people jumped to conclusions when I signed. Dennis Swanson said up front to me, 'We're going to keep Al Michaels.' . . . It's nice to deal with management that tells you the truth. I can handle that."

CBS Sports officials could not be reached for comment.