Before the sides re-opened discussions, one source close to the process was told the deal was simply put "on hold," as opposed to completely dead.
On Thursday, the NBA, which took over control of the Hornets from George Shinn last December, vetoed a trade that would have sent Paul to the Lakers, Pau Gasol to the Rockets and Lamar Odom, Luis Scola, Kevin Martin, Goran Dragic and a 2012 first-round pick from Houston to New Orleans. Representatives from the three teams have communicated and understand that they need to sweeten the deal for New Orleans, either through additional players or future draft considerations.
Part of the problem the teams have run into is dealing with New Orleans. The Hornets have just five players under contract for 2011-12 and some of the pieces that could be involved in a deal are not yet signed. According to one source involved in the talks, the Hornets have not told Houston or L.A. who they can trade, when they can trade them and how long the contract will be for.
While the Lakers are eager to add Paul, the Rockets have been aggressively trying to close the deal. Acquiring Gasol would not only give them an offensive force on the post, but trading Scola and Martin would free up the cap space for Houston to offer free-agent center Nene a four-year deal between $14 million and $16 million per season. On Friday, Yahoo! Sports reported that the Nets were preparing to offer Nene a four-year deal worth $60 million to $65 million.
NBA commissioner David Stern released a statement explaining why the league vetoed the trade:
"Since the NBA purchased the New Orleans Hornets, final responsibility for significant management decisions lies with the Commissioner's Office in consultation with team chairman Jac Sperling," Stern said. "All decisions are made on the basis of what is in the best interests of the Hornets. In the case of the trade proposal that was made to the Hornets for Chris Paul, we decided, free from the influence of other NBA owners, that the team was better served with Chris in a Hornets uniform than by the outcome of the terms of that trade."
In the absence of a three-team deal with Houston and the Lakers, New Orleans would need to reassess the league-wide market for Paul as well. Sources said that process began taking place on Thursday night, when Hornets general manager Dell Demps -- who reportedly considered quitting as a result of this fiasco -- started picking up the phone again in attempt to find a deal that might be to the NBA's liking.