NFL owners met for less than an hour on Thursday morning and voted - supposedly with a single unanimous voice - to break off further talks with the NFL Players Association.
The move effectively shatters the image of labor peace that the NFL has enjoyed over the last decade, and puts in motion a free agency period that could result in some of the most draconian player salary cuts in recent memory.
In line with Scout.com's news-breaking reports last weekend, the salary cap will remain at $94.5 million, leaving many NFL clubs in the position of having to shed veteran players in order to be under the cap by midnight Thursday. Many around the NFL had placed the nickname of "Bloody Thursday" on such a turn of events.
Notable players such as Chad Pennington and Terrell Owens could be the subject of cuts. Veteran players like DT Trevor Pryce, RB Mike Anderson, and CB Sam Madison have already been released.
A few NFL clubs are in a good cap shape and are in a position to take advantage of the talent windfall. Among the teams with cap room to allow spending are the Arizona Cardinals, Cleveland Browns and the Green Bay Packers. All four teams are $20 million or more under the cap. Other teams, such as the Washington Redskins and Kansas City Chiefs, are in a position where they will need to release a significant amount of payroll to get under the cap.
While short-term attention is focused on the impact to this year's free agency period, long-term impact is likely to be be more significant. The prospect of serious labor strife is now very real, and the NFL's concepts of guaranteed contracts, limited free agency, and even the NFL draft could be significantly changed. At present, the 2007 season will take place without a salary cap, a situation which may cause a significant change in the level of competitive balance the NFL has enjoyed in recent years.
NFL commissioner Paul Tagliabue was expected to have a news conference later Thursday morning.
"Without an agreement with the union on an extension, the league year will begin as scheduled at midnight Thursday under the current terms of the CBA," the league said Wednesday in a statement.
Owners did not seem inclined to cut into the difference of 4 percentage points between the sides. New England owner Robert Kraft had suggested that Thursday morning's meeting might be short, just enough time to rubber stamp the executive committee's decision.
One reason was that revenue sharing, a point of contention among the owners, was not on the agenda -- at least not at the start. The union insists that is needed for agreement and some owners agree.
Asked if there could be a deal without it, Buffalo's Ralph Wilson simply said no.
Three days of talks between the league and the NFL Players Association to extend the agreement that runs out in 2008 ended Tuesday with the sides far apart on the percentage of league revenues earmarked for players.
Gene Upshaw, the union's executive director, said the league is offering 56.2 percent of its total revenue for the players, almost four points lower than the union's idea.
"Our number has to start with a six," Upshaw said.
But beyond the numbers is an issue that has divided the owners for two years -- revenue sharing among the teams.
Under the current system, some teams make far more than others in ancillary income, ranging from local radio rights to stadium naming rights and advertising. The lower-revenue teams say that forces them to commit as much as 70 percent of that money to the players while teams with more outside money contribute far less, giving the high-revenue teams more available cash for upfront bonuses to free agents.
Under the current agreement, 2006 is scheduled to be the last year with a salary cap. An uncapped year in 2007 means new rules that will force teams and agents to change their plans this year and could keep a lot of teams out of the free-agent market entirely.
"It might mean that no rookies get signed because no one is sure of the long-term ramifications," said Tom Condon, the agent for a number of the game's top players.
Even more urgent are salary-cap ramifications for many teams, which anticipated a labor agreement and planned for a much bigger ceiling. Washington, for example, could be as much as $25 million over the salary cap after signings over the past few years that anticipated a salary cap figure well over $100 million.
The ramifications of a lower than anticipated cap were evident Wednesday, when some high-priced veterans were cut. Among them were defensive end Trevor Pryce and running back Mike Anderson of Denver, the team's leading rusher last season. Denver also cut tight end Jeb Putzier.
Miami cut left tackle Damion McIntosh, saving $3.8 million against the cap, and former Pro Bowl cornerback Sam Madison. The Dolphins are a prime example of a team that needs a new labor agreement: They are estimated to be about $9 million over a $95 million cap.