The Cincinnati Reds were so discouraged last winter about the direction baseball had taken that their general manager suggested the time had come for a dramatic realignment. Instead of one World Series champion, Jim Bowden said it was time to have two: a champion of the richer, large-market teams and another of the poorer, small-market teams.

Bowden made his suggestion at a time when the economic gulf between rich teams and poor teams had grown wider than ever. No team with a payroll of less than $40 million had a winning record in 1998, and last winter only a handful of teams even bothered bidding for the top free agents.

While no one else suggested such a radical change, Bowden wasn't alone in believing baseball was headed down a dangerous path. Economics all but guaranteed some teams would always contend, while others had no chance of contending.

Now as baseball reaches its traditional halfway point today, Bowden is proving there is another way of doing business.

There's the old-fashioned way.

The Reds are in first place in the National League Central because of a productive minor league system and because Bowden has made a series of shrewd acquisitions. He drafted and developed a top closer (Scott Williamson) and a gifted second baseman (Pokey Reese). He traded for a young first baseman who is fighting for a batting championship (Sean Casey). He found his most consistent starting pitcher (Ron Villone) on the waiver wire last spring.

What Bowden hasn't done is spend a lot of money, at least when compared to the Orioles, Yankees or Dodgers. Only eight teams have a smaller payroll than Cincinnati's $33.2 million. The Yankees and Orioles are each spending around $50 million more.

As baseball prepares for Tuesday's All-Star Game in Boston, it's not just the Reds who are turning the world upside down. The Pittsburgh Pirates have stayed around .500 despite the fourth-lowest payroll in the game. Likewise, the Philadelphia Phillies and Chicago White Sox are proving youth and enthusiasm can lead to an entertaining style of play -- and victories.

And then there are the Orioles and Dodgers, who despite two of the game's three highest payrolls, find themselves in last place and searching for answers.

"Any time a small- or mid-market team can compete successfully, it's a positive for the industry," Houston Astros General Manager Gerry Hunsicker said. "However, history tells us those successes are short-lived, and few and far between."

Money is still the best indication. The Yankees, Indians, Braves and Rangers are in first place, and not coincidentally, they also have four of the six highest payrolls. Meanwhile, the small-market Montreal Expos, Florida Marlins and Minnesota Twins have been out of contention almost since Opening Day.

Many industry experts say the solution is simple: either the players agree to a salary cap when the current labor agreement expires after the 2001 season or owners agree to more revenue sharing.

Running It Up

Other first-half developments have an equally familiar feel, beginning with the shortage of quality pitching. It's not just that pitchers are giving up hits -- it's that they're working fewer innings and getting hurt more frequently than ever before.

Perhaps because of the lousy pitching, offensive records are being smashed. There may not be a home run race to match last summer's Mark McGwire-Sammy Sosa duel, but runs are being scored and home runs being hit at a record pace.

Take a seat at your local ballpark and prepare to see runs scored as never before, which may explain why attendance is up slightly despite drop-offs from both of last season's expansion teams, Arizona and Tampa Bay.

Twenty-six times a team has scored 10 runs -- and lost. The Colorado Rockies became the first team to score in all nine innings of a game. The Cleveland Indians became the first team this century to trail a game by eight runs and win by nine.

Thirteen players hit at least 40 home runs last season, an all-time record. Seventeen players are on course to do it this season. Cardinals third baseman Fernando Tatis, who had never hit a grand slam, became the first player to hit two in one inning. McGwire could become the first player to hit 50 or more home runs in four straight seasons, and Sosa could become the first to hit 60 in back-to-back seasons.

Cleveland's Manny Ramirez could challenge the all-time RBI record, and the Indians may break the all-time record for runs in a season. Arizona's Jay Bell and Matt Williams have surpassed their home run totals of last year. Colorado's Larry Walker has hit more home runs and driven in more runs than he did all last season.

All the accomplishments don't belong to the hitters. Boston's Pedro Martinez may be the first pitcher in 31 years to win 30 games.

An array of dazzling rookies has burst onto the scene this season. Detroit's Jeff Weaver, a 1998 first-round draft pick who pitched just five games in the minors, has become the franchise's best pitcher since Jack Morris. Kansas City second baseman Carlos Febles is the complete package of speed, power and defense. Rangers reliever Jeff Zimmerman has been virtually unhitable.

Then there are the rags-to-riches stories. The Houston Astros spent a lot of their offseason trying to trade for Roger Clemens, but Jose Lima, a throw-in in a deal with the Tigers two years ago, has been better.

Lima is going to his first all-star game. So is Oakland outfielder John Jaha, 32, who believed his career might be over last winter as he recovered from foot surgery.

Asked why he signed with the A's, Jaha said: "They were the only team that offered me anything. And I was ready to play for nothing. I was prepared for the fact that this could be the end. . . . In spring training, I would say my chances of making the all-star game would be about a million to one. A lot of people would have given me pretty bad odds of making the team -- the A's team, not the all-star team."

Cincinnati's best starter recently has been Villone, a career reliever who was released by the Indians in spring training. Injuries forced the Reds to put him in their rotation, and he responded by winning four of six starts. He threw 21 straight shutout innings at one point and beat the Astros twice in two weeks to help the Reds take over first place.

"He's been nothing short of unbelievable," Reds third baseman Aaron Boone said.

Pitching Woes

Villone got a chance because almost every team is desperate for pitching. Experts argue about the reasons, but almost all of them agree the quality of pitching is worse than at almost any time in history.

"Having 30 teams has depleted the supply," Phillies General Manager Ed Wade said. "Durability also comes into play. Dallas Green pointed out the other day the it was the anniversary of Robin Roberts having his string of 23 consecutive complete games snapped. Can you imagine that happening today? He was probably pitching every fourth day, too. It's just a different environment. Even guys coming out of college seem to have some surgical history."

Pirates General Manager Cam Bonifay said: "It's diluted because of expansion. There are, what, 330 spots for pitchers. I'm not sure there are enough pitchers to go around. You've also got smaller ballparks, a lower mound, a lot of things."

On a recent afternoon, Hall of Famer Jim Palmer picked up a ball and began to dig his fingernails into the cover.

"Look how hard this ball is," he said. "The balls today are much, much harder than they were a few years ago. I know the tests say otherwise, but I'm telling you -- and anyone who has pitched will tell you -- this ball is harder."

Others point to smaller strike zones, bigger hitters and the simple fact that more top young athletes are playing sports other than baseball. "I don't think there's enough premium athletes playing baseball anymore," Dodgers General Manager Kevin Malone said. "The youth of America have other things to do with their time."

Drawing a Crowd

Despite the problems, Commissioner Bud Selig begins his second year with his sport riding an unprecedented wave of popularity. Nine franchises are on a pace to draw three million fans, and eight others will draw more than two million.

Several franchises, including Montreal, Minnesota, Oakland and Kansas City, have serious problems. But Seattle, Detroit, Houston, San Francisco and Milwaukee will have new ballparks by next season. Other new facilities are planned for Pittsburgh, Philadelphia and San Diego. The survival of the Expos will depend on getting a new park financed. Investors from Northern Virginia and the District are interested in purchasing the Expos and moving them to the area if no park is built.

"I believe baseball is more popular today than ever before," Selig said. "It's really amazing. I don't think some people understand how popular it is."

End Justifies the Means

Teams that are paying a lot, but winning a lot:

N.Y. Yankees $85 million 51-34 Leading AL East

Cleveland $68.1 million 56-30 Winning AL Central by 13 games

Texas $74.8 million 48-37 Leading AL West

Atlanta $73.6 million 54-34 Best record in National League

Bad Business

Teams that are paying way too much:

Baltimore $84 million 34-51 Last in AL East

Los Angeles $79.3 million 37-47 Last in NL West

Chicago Cubs $60.2 million 40-44 Last in NL Central

More Bang for the Buck

Teams that aren't paying much, but playing well:

San Francisco $44.9 million 49-37 Leading NL West

Cincinnati $33.2 million 48-36 Battling Houston in NL Central

Philadelphia $30.3 million 46-38 Respectable showing

Pittsburgh $22.2 million 42-43 .500 with fourth-lowest payroll

-- Richard Justice

CAPTION: Indians slugger Manny Ramirez has big league-best 94 RBI in chase of record. Rookie Sean Casey is hitting .373, and veterans Pedro Martinez (15-3, 2.10 ERA, 184 SO), Sammy Sosa (32 home runs) again are having big seasons.