NBA commissioner David Stern says the owners are willing to give the players 51 percent of basketball revenues as part of a new proposal presented during a lengthy round of talks on Saturday.
"We want to allow the union enough time to consider our most recent proposal, and we are hopeful that they will accept," said Stern.
But the players seemed to reject the offer, saying their "good faith" efforts to end the NBA lockout fell on deaf ears during more than eight hours of negotiations that stretched late into the night on Saturday.
"Today was another sad day for our fans, for arena workers, our parking lot attendants, our vendors. Very frustrating, sad day," union president Derek Fisher said.
"We, for sure, unequivocally, made good faith efforts to try to get this deal done tonight. And we're at a loss for why we could not close it out."
Stern hinted that if the players don't accept the deal by Wednesday, the owners could take a harder line in talks and move the revenue split to just 47 percent for the players.
Stern said he wasn't giving the players a Wednesday ultimatum, just trying to get the talks moving. He said the next step is to put the latest recommendations in writing and present it to the players as early as Sunday.
Fisher and the union's lawyer Jeffrey Kessler weren't happy with the latest proposal from the owners putting the already shortened season at risk of being called off.
"I think it's fair to say that speaking on behalf of the union, Mr. Kessler rejected the mediators' recommendations and our proposal," Stern said. "But hope springs eternal and we would love to see the union accept the proposal that is now on the table."
The two sides met Saturday with federal mediator George Cohen to try to break the stalemate.
Cohen faces the onerous task of trying to get the owners and players to settle the financial differences that derailed talks last week.
Club owners met in the morning to consider the state of discussions before meeting with players. Cohen joined them as both sides tried to divide $4 billion in annual income and halt a lockout in its 128th day.
Prior to Saturday, the owners had offered a 50-50 split while players, who made 57 percent in the contract that expired July 1, have been unwilling to accept less than 52.5 percent, resulting in a $100 million annual income gap that has stalled talks.
Stern has called off all scheduled November games, with a month needed between a final deal and an opening tip-off.
Billionaire owners claim 22 of 30 clubs lost money last season at a total cost of $300 million and seek salary cuts as well as a firm salary cap that they say would help promote parity.
Players feel their proposal has already provided owners with enough money to avoid losses and they want to keep an exception-filled salary cap system, trying to maximize money for average players as well as stars even after cuts.
Reports of division among players surfaced after talks broke off last week.
Some players have looked into decertifying the union, a move that would push the stalemate into the US courts and likely ensure a full wipeout of the NBA season simply because of the length of time it would take in the legal system.
NBA owners have threatened to seek a court ruling that would void all current NBA player contracts if the union is decertified, although the move would allow players to file an anti-trust lawsuit against the league.
In an American football lockout earlier this year, NFL players went to court to have the shutdown halted and won a brief victory before an appeals court overturned the ruling.
After five and a half months of moves during the usual off-season, NFL owners and players settled with only one exhibition game lost, although their fight to divide $9.1 billion was easier because neither side was saddled with losses.
To decertify the NBA union, 30 percent of the NBA's 439 players must sign a petition to do so, setting up a vote among all players in which a majority would have to agree to the move.