When the players suggested Wednesday night that they wanted Donald Fehr to rejoin the negotiations Thursday, the NHL informed them that his inclusion could be a "deal-breaker."
"We thought we were getting close. There was definitely movement toward each other," Winnipeg Jets defenseman Ron Hainsey said. "As confident as some of us players are in the issues, we cannot close deals. I'd love to think I could, we cannot."
Donald and Steve Fehr were in Thursday's session, as were Daly and lead league counsel Bob Batterman. None of the six owners who attended the meetings Tuesday and Wednesday were present, though some players were.
Steve Fehr and a number of players stood in the back of the room with arms folded as Bettman and Daly stood at the podium to present the league's position.
There were already signs the process was breaking down earlier Thursday when the union requested that federal mediators rejoin the discussions. A similar request was turned down by the league earlier this week. Mediators previously were unsuccessful in creating a breakthrough after two days of discussions last week.
Without mediation, and the NHL's preference to keep Donald Fehr away from the table, the players became a bit miffed.
Negotiations resumed a little after 2 p.m. Wednesday and proceeded in fits and starts as the league and the players' association searched for an agreement. As they had the day before, talks went deep into the night, breaking two hours for dinner before finishing in the early morning hours.
One point of contention is the length of a new contract, with owners looking for a 10-year pact, and players wanting a shorter term. The league also is seeking to limit the length of individual player contracts to five years.
"What we got today, quite frankly and disappointingly, missed the mark on all three respects," Daly said. "So for the union to suggest somehow we are close, is cherry picking and it's unfortunate."
Some hope emerged Tuesday in the first round of talks that kept Bettman on the outside along with Fehr, while six owners and about 18 players talked inside. The positive feeling carried over into Wednesday morning when various team executives said they heard good reports during an NHL board of governors meeting.
There were no owners present for the final round of talks Thursday, but those who joined the process for the first time during the week expressed their disappointment following the breakdown in negotiations.
"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," Winnipeg Jets chairman Mark Chipman said in a statement released by the NHL. "While I sense there are some members of the players association that understand our perspective on these issues, clearly there are many that don't."
The sides are trying to avoid another lost season. The NHL became the first North American professional sports league to cancel a full year because of a labor dispute back in 2005. The deal reached then was in place until this September, and the lockout was enacted on Sept. 16 after that agreement expired.
"While trust was built and progress was made along the way, unfortunately, our proposal was rejected by the Union's leadership," Toronto Maple Leafs minority owner Larry Tanenbaum said in a statement. "My love for the game is only superseded by my commitment to our fans, and I hold out hope we can soon join with our players and return the game back to its rightful place on the ice.
All games through Dec. 14, along with the New Year's Day Winter Classic and the All-Star game, have been wiped off the schedule. More cancellations could be coming within days.
"I am very disappointed and disillusioned," Tanenbaum said. "Had I not experienced this process myself, I might not have believed it."