NEW YORK--In a big victory for NBA owners, an arbitrator yesterday rejected the union's grievance that 226 players with guaranteed contracts should be paid during the lockout.

The decision by John Feerick came on the 111th day of the lockout, which has caused the league to cancel the first two weeks of the regular season.

With negotiations stalled and the sides far apart on the main economic issues, the ruling clearly strengthened the owners' bargaining position by removing the prospect of them being forced to pay more than $700 million in salaries to the players they have barred from work.

"We are pleased with the arbitrator's ruling," NBA chief legal officer Jeffrey Mishkin said. "Unfortunately, it does not get us any closer to a deal with the union's leadership.

"Only negotiations will end our current impasse and lead to a settlement of our dispute. This is yet another defeat for the union's strategy of litigation instead of negotiation."

The union claimed that the absence of lockout language in the standard player contract meant the owners were liable for guaranteed salaries.

The owners argued that the right to withhold pay by imposing a lockout was a tenet of labor law.

Players now must face the reality of not being paid until the dispute is settled at the bargaining table. Until now, they had been holding out hope that a verdict in their favor would pressure the owners to soften their stance and come to the table with a better offer.

Union officials did not immediately comment.

The sides are fighting over, among other things, the amount of revenues owners will devote to salaries. Concerned by salary expenses that are outpacing revenues, the owners imposed the lockout July 1 and have vowed to achieve a new deal that sets a definitive limit on payroll costs.

The sides haven't bargained since last Tuesday, when the players proposed a "tax" on the highest salaries.

Feerick, a Fordham law professor, ruled in the controversial Latrell Sprewell case in which he reduced the player's one-year suspension for attacking his coach and reinstated his contract.