Eighteen days after celebrating an electric championship series and a revitalizing season, the N.B.A. is shutting down — perhaps for a very long time.

Commissioner David Stern is expected to impose a lockout at midnight Thursday.

Negotiators for the owners and the players union made a final attempt to
broker a new labor deal Thursday afternoon, but they separated after
three hours without an agreement to bridge a gap of several billion
dollars.

Commissioner David Stern told union officials that he would urge owners to impose a lockout at
midnight Thursday, when the current collective bargaining agreement
expires, said Derek Fisher, the president of the players association.
Players and teams will be barred from contact with each other. Paychecks
and health care will be suspended indefinitely. And all league business
will cease until the owners and players find the means to overcome
their philosophical and economic differences. “We tried to avoid the lockout,” Matt Bonner, vice president for the
players association, said. “Unfortunately we did not reach a deal. We’re
going to keep working at it and hopefully get something done.” It could take months, if history is any guide. The last time the N.B.A.
shut down, in 1998, it took more than six months to reach a deal,
causing the league to lose games to a labor stoppage for the first time.
After that lockout ended, on Jan. 6, 1999, the N.B.A. staged a
condensed, 50-game season from February to May. On Thursday, Stern said he was prepared for the harm that the lockout could cause the league. “I’m not scared; I’m resigned to the potential damage that it can cause
to our league,” he said. “As we get deeper into it, these things have a
capacity to take on a life of their own. You never can predict what will
happen.” The league has enjoyed relative labor peace since the last lockout,
renewing its collective bargaining agreement in 2005 with only modest
changes and without an interruption of league business. This time, though, owners are seeking a major overhaul of the league’s
economic system and players are resisting any significant changes. The
parties have hardly moved from their positions in the last 18 months of
talks. Owners are insisting on a hard salary cap, shorter contracts and
up to a 38 percent reduction in player salaries — which would represent
the most dramatic changes to the system since the league first adopted
the so-called soft salary cap in 1984. Despite annual revenues estimated at $3.8 billion, owners say the
existing system is broken. Twenty-two of 30 teams are losing money, with
leaguewide losses exceeding $300 million a year, N.B.A. officials say.
The players union disputes the figure and contends that the league could
solve most of the problem with greater revenue sharing. The players have nevertheless proposed
a $100 million annual reduction in salaries, cutting their share of
revenues to 54.3 percent, from 57 percent. Stern has dismissed that
offer as modest. The league wants a 50-50 split of basketball-related
revenues, but with a new formula that the union contends would reduce
their share to below 40 percent. The N.B.A. becomes the second major North American sports league to shut down this year, following the N.F.L.,
which is in the fourth month of a lockout. Like the N.F.L., the N.B.A.
could be headed down a treacherous path of lawsuits, countersuits and
labor complaints that further muddy the situation. Billy Hunter, executive director of the players association, said the
union had no plans to decertify, a move made by the the N.F.L. players
association, and said that the N.B.A. players would instead continue
negotiating. The two sides agreed to meet again soon, possibly in the
next two weeks. The union is also awaiting an NLRB ruling on its
unfair-labor practice complaint, which could change the parameters of
the discussion. Meanwhile, both sides are keeping an eye on the N.F.L.’s case before the
Eighth Circuit Court of Appeals in St. Louis that will decide whether
the N.F.L. lockout is ended. That decision could impact the N.B.A.’s
proceedings and the union’s determination whether to decertify. “When the Eighth Circuit rules, there will be a lot more information for
everybody,” said Jeffrey Kessler, the N.B.P.A.’s outside counsel, who
is also involved with the N.F.L. players’ case.The lockout comes as the
N.B.A. is coming off a captivating season, with record-setting ratings
and revenue and a renewed interest among casual fans because of the rise
of the Miami Heat and a rising crop of new stars. The league’s
popularity is perhaps at its highest point since Michael Jordan retired
in 1998. The Heat, led by LeBron James and Dwyane Wade, lost the championship to the Dallas Mavericks this month, in a six-game series that averaged 17.3 million viewers. Stern was joined at Tuesday’s bargaining session by Deputy Commissioner
Adam Silver; Peter Holt, the San Antonio Spurs owner and chairman of the
labor relations committee; and James L. Dolan, the Madison Square
Garden chairman. The union was represented by its executive director,
Billy Hunter; the N.B.P.A. president, Derek Fisher, a guard for the Los
Angeles Lakers; and two members of the executive committee, Maurice
Evans of the Washington Wizards; and Matt Bonner of the San Antonio
Spurs.