After roughly 13 hours of negotiations over two days failed to close what he termed a significant gulf "on virtually all issues," NBA commissioner David Stern canceled the first two weeks of the 2011-12 regular season Monday night.
Stern also suggested that the cancellations imposed on the 102nd day of the NBA lockout -- just the second work stoppage in league history to bleed into the regular season -- essentially guarantee that a full 82-game season has also been lost after fruitless talks found NBA owners and players unable to agree on key items such as luxury-tax specifics, contract lengths and annual raises.
Those were not seen as the sort of issues that would derail negotiations as recently as last week, but they became as big over the last 48 hours as the sides' ongoing inability to agree on a workable split of annual Basketball Related Income.
"We think that we made very fair proposals," Stern told reporters in New York, describing himself as both sorry and sad about the parties' inability to get close to the framework of a deal before Monday's deadline to start the regular season on Nov. 1 as scheduled.
"I'm sure the players think the same thing," Stern said. "But the gap is so significant that we just can't bridge it at this time."
Asked if he was prepared to rule out an 82-game schedule now that all games through Nov. 14 have been formally scrapped and not merely postponed, Stern said: "Yes, I think that's right. And with every day that goes by, we need to look at further reductions in what's left in the season."
Stern and players association executive director Billy Hunter were in similar positions in 1998, when a 204-day lockout only left time for a 50-game regular season.
Said Hunter on Monday, intimating that canceling games and forcing NBA players to miss checks has been the owners' intent for months: "I'm convinced that this is all just part of the plan.
"I think everybody's waiting for the players to cave," Hunter added. "They figure that once a player misses a check or two, it's all over. I'm saying ... that would be a horrible mistake if they think that's going to happen, because it's not going to happen. The players are all going to hang in."
NBA players displayed their solidarity all day long with dozens of "LET US PLAY" tweets and #StayUnited hash tags at the urging of union president Derek Fisher of the Los Angeles Lakers and New Orleans Hornets guard Chris Paul. Yet as one source close to the talks observed: "People were tweeting 'LET US PLAY' all day long and the owners' offers got worse by the end of the day."
Sources told ESPN The Magazine's Ric Bucher and Chris Broussard that the primary stumbling block in Tuesday's talks centered around a punitive luxury-tax system being pushed by the owners that the union views as a virtual hard salary cap.
Stern cited the owners' willingness to surrender their longstanding insistence on an actual hard cap as an example of how the league "made concession after concession."
But sources told Bucher and Broussard that owners proposed system changes this week that included a luxury tax of $2 for every $1 that teams strayed above the tax threshold -- doubling the tax that was applied in the previous collective bargaining agreement -- and didn't stop there.
The owners, sources said, also want teams that stray beyond the tax line three times in a five-season span to pay $3 for every $1 over the tax limit. Sources said that the proposed tax penalties would rise to $4 for every $1 dollar over the threshold for any team that crossed into tax territory in five straight seasons.
Sources said that owners also pushed for contract limits of four years for free agents re-signing with their current teams and three years for free agents joining new teams, with the union proposing five years and four years, respectively. Sources say that the league, as ESPN.com reported last week, likewise continues to push for tax-paying teams to be denied the use of their Larry Bird and mid-level exceptions and is still pushing for the mid-level exception to be reduced from a maximum of $5.8 million annually over five years in the previous CBA to a two- or three-year maximum contract that can't exceed $3 million annually.
"It makes no sense for us to operate under the current model, where taxpayers ... have a huge advantage over other teams," NBA deputy commissioner Adam Silver said.
Referring to suggested penalties for big-spending teams, union president Fisher said: "It's still as close as you can get (to) a hard cap."
No further negotiating sessions have been scheduled and none are expected before next week, sources said, with Hunter and Fisher scheduling a meeting with union members Thursday in Los Angeles.
Fisher acknowledged Monday that decertification remains an option, but it remains to be seen whether a group of agents that for much of the summer has favored decertification will renew that push.
ESPN.com reported last week that those agents -- Mark Bartelstein, Bill Duffy, Dan Fegan, Leon Rose, Jeff Schwartz, Arn Tellem and Henry Thomas -- were no longer advocating a decertification strategy, partly because of fears that the time to do so and impact negotiations had been missed.
One source with knowledge of the agents' thinking insisted on Monday night that the latest demise of negotiations would not reignite a push for decertification, telling ESPN.com: "There's still time for talks to heat up again."
Hunter echoed that sentiment, insisting that he doesn't think the entire 2011-12 season is in jeopardy.
"I think it would be foolish for them to kill the season," Hunter said. "We're coming off the best season in the history of the NBA (in terms of revenues of TV ratings) and I'm not so sure, in this kind of economy, that if there is a protracted lockout whether the league will recover.
"It took us a while to recover from the '98 lockout," Hunter continued, "and I think it will take us even longer to recover this time around."
Monday's cancellations total exactly 100 games and include such early marquee matchups as Chicago at Dallas on Nov. 1 in the first season opener between the reigning MVP (Derrick Rose) and reigning Finals MVP (Dirk Nowitzki) since 2002. LeBron James, Dwyane Wade and the rest of the Miami Heat, beaten in six games by Nowitzki's Mavericks in the Finals in June, were scheduled to open their season Nov. 2 at Madison Square Garden against the New York Knicks' star duo of Carmelo Anthony and Amare Stoudemire.
Stern said that affected arenas have been authorized to release dates through Nov. 14.
Season-ticket holders, however, get refunds, plus interest, for all canceled games. And an ESPN spokesman said the network "has a contingency plan consisting mostly of college football and basketball" to replace locked-out NBA games.
"We just have a gulf that separates us," Stern said.
Despite the negotiating focus on system issues over the past 48 hours, resolving the BRI split between the owners and players remains at the heart of that gulf. The players continue to hold out for a 53 percent share of BRI, down from 57 percent in the previous labor agreement. The owners last week unexpectedly proposed a 50-50 split, but Stern said after Monday's breakdown in talks that the league has reverted to its previous position of offering the players just 47 percent of BRI in a new deal.
Union officials, though, contend that they have been preparing for this dour day for a long time, convinced for months that a lockout that shortened the season similar to 1998-99's work stoppage was inevitable.
"I think it goes back to a comment that David made to me several years ago when he said, 'Look, this is what my owners have to have,' " Hunter recounted. "And I said, 'The only way you're going to get that is if you're prepared to lock us out for a year or two,' and (this) indicated to me that they're willing to do it.
"So my belief, my contention, is that everything he's done has kind of demonstrated that he's following that script."
Said Fisher: "To be here at this point is disappointing in some ways, but also as we've said all along, this is what we anticipated would probably happen. And here we are. So we'll deal with this with our chin up."
The participants in Monday's meetings were Stern, Silver, owners Peter Holt (San Antonio), Glen Taylor (Minnesota) and James Dolan (New York) and NBA officials Rick Buchanan and Dan Rube on the league side, with Hunter, Fisher, union vice president Maurice Evans and lawyers Jeffrey Kessler and Ron Klempner on the union side.
Marc Stein is a senior NBA writer for ESPN.com. Information from ESPN.com's Henry Abbott, ESPN The Magazine's Chris Broussard and Ric Bucher, and The Associated Press was used in this report.