Guard Sergio Llull has decided against joining the Houston Rockets and will stay in Europe with Real Madrid, league sources told Yahoo Sports.
Real Madrid made a superior financial offer to the Rockets, sources said.
The Rockets have rights for Llull – one of Europe's top guards – and had been negotiating a deal with him.
For the Rockets, Llull's choice to stay in Europe makes the need to retain restricted free-agent guard Patrick Beverley even more important.
Llull, 27, has been starring in the Spanish ACB League. A versatile 6-foot-3, Llull averaged 12 points and three assists for Real Madrid.
He was the 34th pick overall to the Denver Nuggets in the 2009 NBA draft. He was traded to the Rockets, who have owned his rights.