Club president Andy MacPhail and Markakis' agent, Jamie Murphy, confirmed the sides exchanged proposals last week for the first time this offseason and, after several discussions, an agreement could not be reached.
It's the second time since July the two sides have temporarily walked away from the negotiating table - the first coming at the All-Star break, when the Orioles made an offer that one industry source called "low ball."
This time, the sides moved closer but are still considered millions of dollars apart.
"I wouldn't say [it's been] tiring, but it's been a long, drawn-out process," Markakis said yesterday. "It just goes back and forth. For the most part, like I've said 1,000 times, you want to come to something that is comfortable for both sides - something good for the Orioles and something good for myself and my family."
Stopping short of calling it an impasse, Murphy said he and Markakis have decided to observe what happens with baseball's free-agent class before negotiating again. Murphy said he expects talks to pick up in late January, when the sides exchange filings for salary arbitration.
"In many respects, the talks have been productive, but we've reached a point where we felt it would be beneficial to see how the market develops," Murphy said. "From our point of view, we expect to revisit these discussions. We felt that taking some time and seeing how the market shapes up may help us along in finding some common ground. And Andy agreed."
Baseball's winter meetings, which start Monday in Las Vegas, are traditionally when free agents begin to sign with new teams and establish financial parameters for the coming season.
Markakis, 25, would not be a free agent until after the 2011 season, but any long-term extension he signs would likely wipe away at least three potential years of free agency.
Therefore, MacPhail said he wasn't surprised by the player's decision to table discussions and watch how this year's free-agent market develops. MacPhail added he wasn't concerned about the delay because most extensions with younger players are not agreed upon until February, when the arbitration period heats up.
"The early discussions we've had are going to be helpful," MacPhail said. "They'll help determine where we end up and how we will approach it in the more traditional time period."
Neither Markakis' side nor the Orioles would comment specifically on the negotiations, but one industry source called the Orioles' proposal "fairly significant." That is in contrast to the July offer, which, according to sources, was worth $5 million to $6 million annually - half of what it could potentially take to secure a deal.
Toronto Blue Jays right fielder Alex Rios, who often is compared to Markakis, signed a seven-year, $70 million extension in April. Florida Marlins shortstop Hanley Ramirez secured a six-year, $70 million deal in May.
There were concerns within the Orioles organization that the July offer - coupled with the club's decision to unilaterally renew Markakis' 2008 contract for $455,000 - alienated the team's top building block and helped stagnate the current negotiations.
But MacPhail said he sensed no animosity in his dealings with the player or his agent, and Markakis said yesterday he has "no hard feelings."
"You're not always going to like the first offer. But I'm not soured at all," Markakis said. "I understand where they're coming from, and hopefully they understand where I'm coming from. It's just a process. All it takes is time. We'll see what happens."
MacPhail said he would like to have Markakis and second baseman Brian Roberts, who would be a free agent at the end of 2009, signed to multiyear deals, but "there are different timetables that exist for both."
He said, "we are still talking," with Roberts and the only deadline is Roberts' desire to have the situation resolved by spring training.
MacPhail said he didn't believe a failure to agree long-term with either Roberts or Markakis at this time would adversely affect the club's direction at the winter meetings - which includes adding rotation depth and a starting shortstop via free agency or trade.