NBA commissioner David Stern has cancelled the first two weeks of the 2011-12 regular season after several hours of meetings failed to result in a new labour deal with players.
Stern said he is cancelling 100 scheduled regular season games through November 14 after the two sides in the contract dispute met for seven hours on Monday.
Stern said the latest effort to end the lockout of the players and begin the season on time failed because the owners and players are far apart on a number of key questions.
"We just have a gulf that separates us," Stern said. "With every day that goes by, I think we need to look at further reductions in what's left of the season."
All of the NBA's 114 pre-season games have already been wiped out by the dispute.
No new talks have been scheduled but owners and players said they plan to keep in touch.
"I started out by saying I'm sorry to report, and I'm sad to report, that we've cancelled the first two weeks," Stern said.
"We certainly hoped it would never come to this. We think that we made very fair proposals. I'm sure the players think the same thing. But the gap is so significant that we just can't bridge it at this time."
Stern, deputy commissioner Adam Silver, owners Peter Holt of San Antonio, Glen Taylor of Minnesota and James Dolan of New York, and senior vice president and deputy general counsel Dan Rube represented the owners in talks on Monday.
They met with union executive director Billy Hunter, presidentDerek Fisher of the Los Angeles Lakers and vice president Maurice Evans of the Washington Wizards, and lawyers Jeffrey Kessler and Ron Klempner.
There is still three weeks before the start of the regular season, so the the two sides could still reach a deal in time or possibly end up in court.
Each has accused the other of unfair labour practices which the National Labor Relations Board is looking into. The owners also filed a lawsuit in US federal court against the players' union.
Union brass have so far decided not to decertify like their counterparts with the National Football League, although the basketball players say they haven't ruled out that option.
The owners locked out the players on July 1 when they failed to reach a deal before the expiration of the old collective bargaining agreement. The NBA's opening night was scheduled for November 1.
Team owners and players have been haggling over how to divide $3.8 billion in annual revenues and also over salary cap issues.
The main stumbling block has been the issue of how to share basketball-related income. The owners want a 50-50 share of revenues while the players refuse to go below 53 percent.
The gap in their positions has been so wide it could now jeopardize the entire 2011-2012 campaign, says Fisher.
"This is not where we choose to be," Fisher said. "We're not at a place where a fair deal can be reached with the NBA."
Earlier this year, owners angered the players with a proposal that called for salary rollbacks, shorter contracts and a hard salary cap of $45 million.
The only previous NBA season to be shortened because of money disputes was in 1998-99, when the season was cut to 50 games.
Only once in North American sports history has an entire season been lost to players and team owners being unable to agree upon financial terms, when the National Hockey League cancelled its 2004-2005 campaign.
NBA players reacted to the news with disappointment and expressed sympathy for the stadium workers who will lose their jobs.
"Genuinely sorry to all the employees in and around the NBA arenas losing work," Phoenix star Steve Nash wrote on his social networking Twitter page.
"Thanks for the overwhelming support today guys. You know we want to play & you understand the propaganda/misinformation from the owners."
LeBron James tweeted, "I wanna sincerely say sorry to all the fans! It's such a sad day for all of us, especially u guys! There's no US w/o You."
Not all players seemed to be paying attention Monday night as about an hour after the news broke, Fishers' teammate Lamar Odom tweeted on his page, "Time to tune in2 @KimKardashian's #KimKWedding part 2! It is on E!"