McGrady goes to Knicks in Kings’ trade

The Houston Rockets, Sacramento Kings and New York Knicks have reached agreement on a three-team trade that sends Tracy McGrady(notes) to New York.

The Rockets had struck a deal with the Kings late Wednesday to acquire Kevin Martin(notes), but expanded the trade to include the Knicks at the urging of McGrady’s agent Arn Tellem.

The completed trade will send McGrady and Kings point guard Sergio Rodriguez(notes) to New York. Houston lands Martin, Knicks forwards Jordan Hill(notes) and Jared Jeffries and draft picks to the Rockets. The Kings will receive Rockets forward Carl Landry(notes) and center Joey Dorsey(notes) and Knicks guard Larry Hughes(notes).

By trading Hill and Jeffries, the Knicks clear enough salary-cap space to potentially allow them to sign two star free agents this summer. In return, the Knicks will swap 2011 draft picks with the Rockets and send them their 2012 first-round selection. The 2011 pick is protected only for the first pick while the Rockets will get the Knicks’ 2012 selection provided it’s after No. 5.

McGrady’s agent, Arn Tellem, helped broker the trade. He also represents several Kings, including rookie star Tyreke Evans(notes). Tellem was involved with Houston and New York in discussions about a two-team trade between them, and sources say he was upset with Wednesday’s deal to Sacramento and worked diligently to include the Knicks in the trade.

Talks between the Rockets and Knicks regarding McGrady heated up over All-Star weekend. By Monday, as Yahoo! Sports first reported, the Rockets had settled on their asking price for McGrady and the burden of taking on Jeffries contract: Hill, the right to swap picks in 2011, the Knicks’ 2012 first-round selection and Hughes or Al Harrington to make the salaries match.

The Chicago Bulls also expressed interest in McGrady, and when talks with the Knicks began to stall while the teams haggled over the protection of the draft picks, the Rockets recruited the Kings for possible three-team scenarios. After a potential three-way deal was scuttled by the Bulls’ decision to trade John Salmons to the Milwaukee Bucks, the Rockets and Kings reached agreement on a deal for Martin that would send McGrady to Sacramento.

Tellem then went to work to expand the trade to include the Knicks.

McGrady hasn’t played since late December and has appeared in just six games this season with each appearance lasting fewer than eight minutes. The Knicks, however, most value his $23 million expiring contract. With McGrady coming off the books this summer, the Knicks will be major players in a free-agent market that includes LeBron James, Dwyane Wade, Chris Bosh, Carlos Boozer and possibly Amar’e Stoudemire.

Martin told Y! Sports’ Marc Spears he will miss Sacramento, but was appreciative for the chance to play for a potential playoff team.

“It goes both ways,” Martin said by phone shortly after the trade. “Sacramento gave me an opportunity. I was a late first-round pick. I could have been playing overseas. I assumed they still loved me. I was the ‘Golden Child’ – that’s what Corliss Williamson used to say. I guess that’s the sad part.

“But it was time. I used to be the young guy playing with old guys. Now I’m the old guy playing with young guys. Let the young guys develop. I appreciate them letting me go to a playoff-caliber team at this time of my career.”

The Kings pulled Martin aside at halftime of Wednesday night’s game against the Golden State Warriors and told him he was being traded. Martin will be reunited with former Sacramento coach Rick Adelman.

“At halftime coach [Paul Westphal] said, ‘There is a trade involving you. You are the piece,” Martin said. “My first question was, ‘Who is the team?’ ‘Houston.’ I was good with it. It’s time to move on.

“I’m definitely excited for a new opportunity with my old coach. That’s the funny part.”

Rockets GM Daryl Morey has long been enamored with Martin, and kept pushing for a deal between the two teams. Morey knew Martin had become unhappy in Sacramento, sources said, and that the Kings shooting guard was struggling to adjust playing alongside rookie point guard Tyreke Evans. Martin didn’t feel like his talents were compatible with Evans, and struggled to defer to him.

The Dallas Mavericks also had serious interest in Martin, but abandoned those talks to complete a trade with the Washington Wizards for Caron Butler and Brendon Haywood on Saturday.

Morey didn’t have an easy time parting with Landry, a rugged, undersized forward who had come to personify the grit of these Rockets. Yet, the chance to secure a young, talented scorer for his offensively challenged roster was too much to pass up.

Martin’s addition comes with a price: He will make $46 million over the next three seasons. Martin, 27, also has missed at least 20 games in each of the past three seasons, including 32 this season because of a broken wrist.

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Updated Thursday, Feb 18, 2010