Amid two years of mounting frustrations and financial setbacks, the Western Athletic Conference managed to debunk the theory that bigger is better.

Meanwhile, Utah and BYU, along with a half-dozen other WAC schools, have decided to add by subtraction and withdraw from the 16-team conference. They will create their own conference, effective the fall of 1999.The yet-to-be-named eight-school league will include Air Force, Colorado State, New Mexico, San Diego State, Wyoming and UNLV. It marks the first time schools have abandoned the WAC since Arizona and Arizona State did it in favor of the Pac-10 in 1978.

While the move heralds the birth of a new entity, it might also signal the demise of the 36-year-old WAC.

Not lost on the beleaguered conference is the fact that it is going to be without its marquee, nationally marketable programs: Utah basketball and BYU football. The Utes are coming off a showdown with Kentucky in the NCAA championship game and have notched four Sweet 16 appearances this decade. The Cougars have carried the WAC banner in football for two decades, highlighted by the 1984 national championship and a 1997 Cotton Bowl victory. Both BYU and Utah were charter members of the conference when it kicked off in 1962.

Remaining behind are Hawaii, UTEP and Fresno State, who have been aligned with the traditional WAC schools for years and are conspicuously absent from the new mix. They now face an uncertain future along with Southern Methodist, Texas Christian, Rice, Tulsa and San Jose State.

WAC commissioner Karl Benson said he was "shocked and surprised" by the announcement, which came Tuesday afternoon. Benson, recuperating at home following eye surgery four days earlier, was awakened by a phone call from Colorado State President Albert Yates, who heads the WAC's President's Council.

"I was caught off guard," Benson said. "I knew for several weeks of a degree of dissatisfaction among some member institutions. But I didn't believe it would come to this action by these eight schools."

Not much is known about the new conference. The task now is to become recognized by the NCAA governing body and to be admitted membership into the organization. "This is uncharted territory for us," said BYU athletic director Rondo Fehlberg. "It's a new experience for us. None of us has done this before."

The new league is in need of headquarters, a commissioner and a television contract. Bowl agreements prior to the 1999 football season are also a priority, though the chances are the Holiday Bowl affiliation will follow San Diego State to a new conference. "There's an enormous amount of work across the board to be done by a lot of people," Fehlberg said.

Clearly, though, BYU and Utah stand to benefit from the change. With fewer schools comprising the new league, television and bowl revenue can be divided equitably, unlike the 16-school monstrosity that includes a number of schools hardly able to contribute to the WAC coffers.

"The financial picture has become paramount in the downfall of the 16-team WAC," Benson said. "We could not generate enough revenue to keep 16 schools satisfied."

Another plus is the schools that make up the new league have instant name-recognition among local fans. With the exception of UNLV, it will look a lot like the WAC of yesteryear. And it's no coincidence that the distance to be traveled between those schools is relatively short, as opposed to the current WAC, which spans more than 4,000 miles and five time zones. It means no more expensive trips to Hawaii and Texas.

As an added bonus, the league should also be competitive in football and basketball, the revenue-producing sports.

Officials at the schools leaving the WAC are counting on those factors to fill the stands and restore a measure of national respectability to their athletic programs.

Though the athletic directors have been discussing the possibility of forming a new conference for about a year, it may have been the recent militant threats by Air Force officials that hastened the consummation of the deal. At their meeting in Tucson in May, athletic directors voted 13-3 to recommend a permanent East-West divisional alignment. Air Force was angry because the split would mean the school would be separated from its Front Range rivals, Colorado State and Wyoming.

The vote prompted school officials to say they would pull out of the conference if the presidents adopted the recommendation. "That was a lightning rod," Benson said. "We may have underestimated the degree of discontent that was out there." It led to presidential-level discussions about creating a new league that went from phone calls and faxes to a meeting last Friday at the Denver International Airport, where a decision to withdraw from the WAC was reached by BYU, Utah, Air Force, Colorado State and Wyoming. Later, New Mexico, San Diego State and UNLV accepted an invitation to join the mass exodus from the conference.

The WAC's decision to expand in 1994 was probably doomed from the beginning. The thinking on the part of the 10 school presidents (of that group, only three remain) was that its sheer size and uniqueness, as well as bringing in big markets in Texas and California, would attract television dollars. But that plan never achieved the desired results.

Instead, the 16 schools watched their athletic departments budgets operate in the red as bowls that previously had deals with the conference pulled the rug out from underneath the WAC. In the second full season of play, league revenues are $12 million, about the same amount that WAC schools were hauling in prior to expansion. Trouble is, that total is being divided 16 ways intead of 10.

Presidents called the challenges presented by the current WAC situation "insurmountable." Committees made up of faculty representatives were formed to examine various options, but it was determined that none would meet the demands of an unwieldy, diverse conference.

As it stands now, contracts with Las Vegas as the host of various WAC championships and with ESPN, which has an exclusive contract with the WAC to televise football and basketball, are subject to renegotiation or termination when conference membership changes. The conference will continue its current set-up through the 1998-99 academic year, Benson said.