The deal, which was vetoed by NBA commissioner and de facto Hornets owner David Stern on Thursday night for what the NBA deemed "basketball reasons," would have sent Lakers forward Pau Gasol to Houston and the Rockets' Kevin Martin and Luis Scola to New Orleans.
But after the parties spent the last two days attempting to satisfy the league's new marching orders -- that the Hornets acquire some combination of younger talent or more draft picks -- sources said the deal fell apart when the Lakers pulled out.
"The [new] price was too high," said one source involved in the talks.
The Lakers wasted no time in switching gears, as sources confirmed an ESPN.com report that forward Lamar Odom is expected to be traded to Dallas. He would be placed into the Mavericks' trade exception that was acquired as part of their three-team trade with New York and Washington that sent center Tyson Chandler to the Knicks.
The Odom trade was met with much surprise around the league, with sources marveling at what appeared to be a salary dump (Odom will earn $8.9 million this season and has a partially guaranteed $8.2 million next season, with a $2 million buyout). The fact that the two-time NBA champion and reigning Sixth Man of the Year was gift-wrapped to a team that embarrassed the Lakers the Western Conference semifinals last June made it all the more unexpected.
According to the Los Angeles Times, the Lakers will receive a 2012 first-round pick from Dallas and possibly a second-round pick, plus an $8.9 million trade exception in the deal. It's an astonishingly low price that Dallas will pay for Odom, and the latest indication that the times and priorities may be changing in L.A. With Lakers executive Jim Buss, the son of owner Jerry Buss, heading the operation these days, the Odom trade will do little to change the opinion of those who believe they Lakers are "in cost-cutting mode," as one source close to the situation said. "I think the Buss' kids are now running the team, for the most part, and they're trying to make as much money as they can," the source said. "Everything is changing there."
The next few days will reveal the team's plan, and there is little doubt the Lakers will make a push for Dwight Howard now. They won't be alone, as his agent, Dan Fegan, was given permission to explore trades with the Nets, Mavs and Lakers this week. Howard requested a trade this week, and a source close to the situation confirmed to SI.com that he asked to be dealt to the Nets.
The pursuit of Paul, meanwhile, will continue elsewhere. The Clippers and Warriors are likely to re-engage with the Hornets, although the NBA's messy methods in handling the Hornets are clearly a concern for any team with which they deal. It's unclear whether the Celtics can get back in the race, especially considering one of the principle pieces of their previous proposals -- restricted free agent forward Jeff Green -- signed a one-year deal with Boston on Saturday and can not be traded for six months.
While sources said a revised version of the vetoed Paul deal was submitted to the league office early Saturday, the situation remained fluid hours later when possible changes were still being discussed. A possible sign-and-trade sending free agent center Jason Smith from the Hornets to the Lakers is among those potential changes, though one source said that component had not been agreed upon as of 8 p.m. ET on Saturday. According to Yahoo! Sports, a sign-and-trade sending free agent guard Marcus Banks from the Hornets to the Lakers was also being considered.
Sources told SI.com earlier Saturday that the possible deal was "mostly the same" as before, when Odom, Martin, Scola, guard Goran Dragic and a first-round draft pick from Houston were headed to the Hornets. Gasol was set to join the Rockets and L.A. would receive Paul.
Hornets general manager Dell Demps, according to sources, had been told by the league to focus on acquiring either younger players (Martin is 29, Scola is 31, and Odom is 32) or more draft picks in order to help the Hornets build for the future.
According to a source, Martin was told not to come to Rockets practice on Saturday. The Houston Chronicle reported that Scola was not practicing as well, while Dragic was already out with a sprained ankle.
"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 in a statement on Friday to explain why the league nixed the trade. "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."
While Stern insisted that the deal's first death wasn't a result of pressure applied by rival owners, Yahoo! Sports and the New York Times obtained a letter from Cavaliers owner Dan Gilbert that seemed to imply otherwise. Gilbert called the deal a "travesty" and argued that the Lakers' economic benefits in the deal -- in addition to acquiring Paul -- were far too great for the league to approve.
"Over the next three seasons, this deal would save the Lakers approximately $20 million in salaries and approximately $21 million in luxury taxes," Gilbert wrote. "That $21 million goes to non-taxpaying teams and to fund revenue sharing."
In the absence of a three-team deal with Houston and the Lakers, New Orleans needed to reassess the league-wide market for Paul as well. Sources said that process began Thursday night, when Hornets general manager Dell Demps -- who reportedly considered quitting as a result of this fiasco -- picked up the phone again in attempt to find a deal that might be to the NBA's liking.
"Since that deal did not go through, we're going to keep plugging away and see if we can get a deal for the team," Demps told reporters on Friday. "We're talking about everything. Everything is on the table."
Demps said he was given autonomy by the league to make another trade for Paul, who showed up to the Hornets' first day of training camp Friday just hours after the first proposal was nixed.
"We offered Chris a contract extension and Chris said that he's not ready to sign an extension at this time," Demps said. "We always knew that there was a possibility that this day would happen. ... It would be real easy if Chris signed the extension but the reality is he didn't sign the extension, so we have to do everything we can for the organization. I wish he'd stay. I'm not going to lie about it."