In a move that could lead to the first work stoppage in National Basketball Association history, the 29 league owners yesterday agreed to lock out the players and suspend all league business until the two parties sign a new labor agreement.
The lockout will begin at midnight tonight, when the current collective bargaining agreement expires. With no negotiations planned and several major economic issues to be resolved, next season may not start on time.
Unlike Major League Baseball, the National Football League and the National Hockey League, the N.B.A. has averted losing games during the regular season. This is the third time in four years that the N.B.A. has locked out its players. The last time was in 1996 for one day.
In September 1995, Commissioner David Stern announced the signing of the six-year collective bargaining agreement that was supposed to preserve labor peace into the next century. But a three-year out clause enabled the owners to renegotiate the contract if players salaries exceeded 51.8 percent of basketball-related income.
With a number of $100 million deals signed the last two years, the salary figure reached more than 57 percent this season. On March 23, the owners voted by 27-2 to reopen the collective bargaining agreement.
During the lockout, teams will be prohibited from negotiating with, signing or trading players. Team workout facilities will be shut down and teams will not conduct or facilitate any summer camps, exhibitions, practices, workouts, coaching sessions or team meetings.
Only previously scheduled charity games were spared. Players rehabilitating injuries will be forced to work out arrangements through the team to be treated privately.
The key issue is the owners' insistence on putting a ceiling on salaries. Under a clause known as the Larry Bird exception, teams can pay their own free agents whatever salary they want to keep that player with the franchise. The rule has led to All-Star veterans like Michael Jordan securing $30 million-plus, one-year contracts that dwarf the team's annual salary cap. It has also led to young phenoms like Kevin Garnett gobbling up $126 million over seven years.
The owners have proposed that no player can make over 30 percent of a team's total salary cap, meaning the highest-paid player in the league would average about $10 million under the rules. Thirteen players now make more than that amount a season.
The owners have also proposed a five-year rookie scale, the first three years of which would be guaranteed by the team.
At the end of that first contract, the team would have a right of first refusal in order to keep the player.
The current three-year rookie scale allows players unrestricted free agency after their third season.
''We think the potential revenue generation capacity in the N.B.A. is healthy,'' Stern said. ''It's the system that doesn't work.
''We can't afford to affect play the season under the current system. ''There are a number of clubs that will do better not operating than operating. That's something the players don't seem to understand.''
The two sides began negotiating on April 1. After nine bargaining sessions, talks broke off last Monday. The players, insistent that the Bird exemption be kept and that the owners negotiate off their proposals, called a halt to the meeting after 30 minutes.
''It's all very difficult and of great concern to us,'' the N.B.A. deputy commissioner Russ Granik said. ''But at some point you have to deal with the lesser of two evils. You've got an economic system that's just plain bad, and it results in the league being unprofitable. You can't keep operating under that system in order to make sure you don't upset fans or business partners. That's just a prescription for total failure.''
Billy Hunter, the players association executive director, said the union was prepared to wage a long, bitter fight at the bargaining table. Neither he nor Stern would rule out the possibility of a strike-interrupted season in which millions of dollars in salary and revenue would be lost.
''The owners' feeling is that the closer we get to the season, a biological clock will go off in our players' heads and they'll change their minds,'' Hunter said. ''They may have miscalculated this time. If they realize the players are in for the long haul, then they may become softer in their demands.''
Hunter added: ''It's regrettable that the N.B.A. owners have chosen to take the extreme measure of locking out the players and shutting down the industry. The players have been and will continue to be extremely reasonable in addressing everyone's concerns in these negotiations.
''The owners' demands are especially unreasonable in light of the continued acknowledging by the commissioner that the league continues to generate healthy and increasing revenues. The new national television deal is worth twice the last deal, attendance is steady and franchise values continue to escalate.''
The two sides are not expected to meet until after the players union meeting in Maui from July 6-12.
''The players are saying we don't want a hard cap because that will eliminate the middle class,'' Granik said. ''Well, the middle class is already being eliminated. It has nothing do with the hard cap. It has to do with guys at the high end are making too much money on a relative basis. From the owners' standpoint, it's not issue No. 1. Issue No. 1 is how much we're paying in total salaries.''
Granik said the possibility of bringing in a mediator was an option.
''I don't think we're at that point yet,'' he said. ''When things get really difficult, you always consider those kinds of exceptions.''
Asked if the players were prepared to lose a season's worth of pay, an amount totaling more than $1 billion, Hunter said, ''If we have to.''