The National Hockey League Players' Association (NHLPA) said the league rejected its latest proposal today as labour talks aimed at ending the lockout unexpectedly collapsed with no future talks planned.
Moments after telling a news conference the union presented a proposal that offered a "quick end" to a bitter dispute, NHLPA Executive Director Donald Fehr returned to the podium to say the offer was shot down.
"We were advised in a voicemail message that the moves the players made were not acceptable, there was no reason to stay around for meetings tonight or tomorrow, that they would be in touch," said Fehr.
"It looks like this is not going to be resolved in the immediate future. I hope that turns out to be wrong but that's certainly what the message is that we have today."
The latest twist in the lockout, which has been in place since mid-September, undid much of the optimism that had been building following two consecutive days of marathon negotiating sessions inside a midtown Manhattan hotel.
According to Fehr, the union responded comprehensively to issues that had been central to this week's meetings, including agreements on player pensions and transitions payments.
He went as far as to say he felt the two sides were "clearly very close if not on top of one another in connection with most of the major issues."
But any optimism drawn from his comments was quickly undone, raising the likelihood that the NHL, which has already cancelled about a third of the 2012-13 regular season, will soon slash more games off the schedule.
"I was optimistic and conveyed my optimism to the Board of Governors at our Wednesday meeting. However, when we reconvened with the players on Wednesday afternoon, it was like someone had thrown a switch," Toronto Maple Leafs minority owner Larry Tanenbaum, who was at the meetings, said in a statement.
"The atmosphere had completely changed. Nevertheless, the owners tried to push forward and made a number of concessions and proposals, which were not well-received. I question whether the union is interested in making an agreement."
NHL Commissioner Gary Bettman said he was flabbergasted Fehr characterized the sides as being close to a resolution, saying the union had "cherry-picked" the issues that were important to them, while ignoring the issues key to the league.
"I don't know why he did that," Bettman told reporters in what was a dizzying turnabout in a makeshift press room at a the negotiating headquarters. "I found it almost incomprehensible that he did it."
Bettman said NHL owners went out of their way to improve their offer but that the union ignored its demands for a 10-year term for the next labour agreement and a five-year term limit on player contracts.
The commissioner said concessions made by the NHL this week are now off the table but that the league is willing to renew negotiations when asked by the union.
He said the owners had rejected the union's suggestion on Thursday to invite federal mediators to rejoin them at the negotiating table because they had not been of any help.
Fehr and more than a dozen players presented their proposal to NHL Deputy Commissioner Bill Daly and a league lawyer before talks broke off for the day.
"We have moved very substantially in the owners' direction on things like contract length and variability and term of agreement and we hope and believe and expect that this should put us on the road to a quick end to this dispute," said Fehr.
This week's discussions, aimed at ending a lockout that has already cancelled about one-third of the 2012-13 season, were the first between the two sides since U.S. federal mediators failed to kick-start talks last week.
The lockout, which the NHL has said is costing it about $18-$20 million per day, is centred around a dispute over how to split the league's $3.3 billion revenue.
It is the fourth work stoppage in 20 years for the NHL and the first since a lockout wiped out the entire 2004-05 season.
"I came here optimistic that we could find a solution. That sense of optimism grew after our first few sessions, including the small group discussions late last night," Mark Chipman, an owner of the Winnipeg Jets who was involved in this week's meetings, said in a statement.
"Regrettably, we have been unable to close the divide on some critical issues that we feel are essential to the immediate and long-term health of our game."