The NBA is locking out its players until a new collective bargaining agreement can be reached, the second pro sports league shut down by labor strife.
The lockout will commence at 12:01 EDT on Friday, after the expiration of the current deal that owners say has cost them millions of dollars a year.
"We had a great year in terms of the appreciation of our fans for our game. It just wasn't a profitable one for the owners, and it wasn't one that many of the smaller market teams particularly enjoyed or felt included in," Commissioner David Stern said. "The goal here has been to make the league profitable and to have a league where all 30 teams can compete."
The long-expected lockout could put the 2011-12 season in jeopardy and comes as the NFL is trying to end its own work stoppage that began in March.
"The expiring collective bargaining agreement created a broken system that produced huge financial losses for our teams," Deputy Commissioner Adam Silver said in a statement.
Despite a three-hour meeting Thursday and a final proposal from the players -- which NBA leaders said would have raised average player salaries to $7 million in the sixth year of the deal -- the sides could not close the enormous gulf between their positions.
"The problem is that there's such a gap in terms of the numbers, where they are and where we are, and we just can't find any way to bridge that gap," union chief Billy Hunter said.
All league business is officially on hold, starting with the free agency period that would have opened Friday. And teams will be prohibited from having any contact with their players.
The last lockout reduced the 1998-99 season to just a 50-game schedule, the only time the NBA missed games for a work stoppage. Hunter said it's too early to be concerned about that.
"I hope it doesn't come down to that," he said. "Obviously, the clock is now running with regard to whether or not there will or will be a loss of games, and so I'm hoping that over the next month or so that there will be sort of a softening on their side and maybe we have to soften our position as well."
Despite frequent meetings this month, the sides just didn't make much progress.
Owners want to reduce the players' guarantee of 57 percent of basketball revenue and weren't interested in the players' offer to drop it to 54.3 percent -- though players said that would have cut their salaries by $500 million over five years.
They sparred over the league's characterization of its "flex" salary cap proposal -- players considered it a hard cap, which they oppose -- and any chance of a last-minute deal was quickly lost Thursday when league officials said the union's move was in the wrong direction financially.
"I don't think we're closer; in fact it worries me that we're not closer. We have a huge philosophical divide," Stern said.
The NBA's summer league in Las Vegas already has been canceled, preseason games in Europe were never scheduled, and players might have to decide if they want to risk playing in this summer's Olympic qualifying tournaments without the NBA's help in securing insurance in case of injury.
The expected lockout comes exactly one year after one of the NBA's most anticipated days in recent years, when LeBron James, Dwyane Wade and the rest of the celebrated class of 2010 became free agents.
That free agency bonanza -- highlight by the James, Wade, Chris Bosh trio in Miami -- got the league started on a season where ticket and merchandise sales, ratings and buzz were all up. That weakened the owners' case that the system was broken beyond repair, but it also demonstrated why they wanted changes, with Stern saying owners feel pressured to spend as much as possible to prove their commitment to winning to fans.
"We had a great year in terms of the appreciation of our fans for our game. It just wasn't a profitable one for the owners, and it wasn't one that many of the smaller market teams particularly enjoyed or felt included in," Stern said. "The goal here has been to make the league profitable and to have a league where all 30 teams can compete."
Hunter said he hopes the two sides will meet again in the next two weeks.
The players' association seems unlikely, at least for now, to follow the NFLPA's model by decertifying and taking the battle into the court system, instead choosing to continue negotiations. Hunter said last week he felt owners believe the 8th U.S. Circuit Court of Appeals in St. Louis, which is debating the legality of the NFL's lockout, will uphold employers' rights to impose lockouts.
"We'll just continue to ask our fans to stick with us and remain patient with us. As players we want to play. That's who we are; we're basketball players," Lakers guard and union president Derek Fisher said. "Right now we're faced with dealing with the business aspect of our game. We're going to do it the same way we play basketball. We're going to work hard. We're going to be focused. We're going to be dedicated to getting the results that we want."
The NBA projected $300 million in losses this season and said it lost hundreds of millions in every season of this CBA, ratified in 2005. League officials said 22 of the 30 teams would lose money.
But owners don't just want to minimize their losses. They want to make a profit, along with developing a system in which small-market teams could compete with the biggest spenders. The Lakers and Mavericks, who won the last three NBA titles, are annually at the top of the list of highest payrolls.
So they took a hard-line stance from the start, with their initial proposal in 2010 calling for the institution of a hard salary cap system, along with massive reductions in contract lengths and elimination in contract guarantees. Though the proposal was withdrawn after a contentious meeting with players at the 2010 All-Star weekend, the league never moved from its wish list until recently.
About 90 percent of NBA players get paid from Nov. 15 through April 30, so they won't be missing checks for a while. But Stern has warned that the offers only get worse once a lockout starts, so the league could try to push through elements of its original proposal when bargaining resumes.
Like with the NFL lockout, NBA players won't be the only ones affected. Employees of teams and the league also face a very uncertain future. Stern admitted all options would be considered, including furloughs for his employees.
"The people who stand to have their livings impacted by a shutdown of our industry are going to have a negative view of both sides," Stern said. "I think our fans will tend to have a negative view of why can't you guys work this thing out."