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NBA Rumors: Saturday, July 18

InsideHoops NBA rumors updated 3:15 p.m. ET. Today's later stories will be on our basketball blog.

Point guard Earl Watson has agreed to sign with the Pacers once he clears waivers, a person with knowledge of the situation said Friday night. It's unknown how much the one-year deal is worth. Indianapolis Star

Watson was waived by the Oklahoma City Thunder on Friday. He'll be on waivers for seven days. Signing Watson would soften the blow of losing Jarrett Jack if the Pacers don't match Toronto's four-year, $20 million offer to him by Monday. Indianapolis Star

The Pacers may not be done making roster moves, either. They are trying to work out a sign-and-trade deal to send unrestricted free agent Marquis Daniels to the Boston Celtics, according to another person with knowledge of the situation. Indianapolis Star

Daniels will receive the Celtics' $1.9 million biannual salary-cap exception if the two teams can't work out the sign-and-trade deal, according to several media outlets. Indianapolis Star

Daniels, expected to be a backup for Ray Allen and Paul Pierce, averaged 13.6 points and 4.6 rebounds last season for Indiana. The Pacers declined their option on Daniels, which would have been worth $7.35 million next season. Daniels, who started his career in Dallas, had also been talking with the Mavericks, Charlotte, Houston, New York, and Orlando. Boston Globe

Forward Brian Scalabrine has been mentioned as part of a possible sign-and-trade setup, which would allow the Celtics to pay Daniels more than the $1.9 million he would receive as an unrestricted free agent. Scalabrine, entering the final year of his contract, will earn $3.5 million next season. Boston Globe

The Orlando Magic are close to signing free agent point guard C.J. Watson, giving them an alternative to veteran Anthony Johnson as a backup to often-injured Jameer Nelson. Watson, 6-2, 180 pounds, played the last two years at Golden State after spending one year in Greece and another year in the NBA Development League. FanHouse

The Magic already have Johnson under contract, but they decided not to re-sign free agent point guard Tyronn Lue. FanHouse

The Jazz today formally announced that they are matching the offer sheet restricted free agent power forward Paul Millsap signed last week with Portland. The match is dependent on Millsap passing a physical exam, which he is taking today. Deseret News

The deal is worth $32 million over four years, including $10.3 million payable before the end of the month. Deseret News

With the match made, the Jazz continue to look to trade starting power forward Carlos Boozer. But nothing is imminent in the regard, O'Connor said late Friday afternoon. Deseret News 

Sources with knowledge of Lamar Odom's thinking told ESPN.com that he has not abandoned hope of resuscitating serious negotiations with L.A. after Lakers owner Jerry Buss angrily pulled a three-year, $27 million offer off the table earlier this week. According to a broadcast report Friday night from longtime L.A. television anchor Jim Hill, Odom called Buss directly on Thursday in an attempt to reignite talks. ESPN.com

According to sources close to the process, Odom has been apprised that he can sign a five-year Heat deal consuming all of the team's mid-level exception, which would be worth $34 million and include the option to return to free agency after three years and negotiate a larger contract with Miami. ESPN.com

With the Lakers possessing Odom's Larry Bird rights, Miami can't match the $9 million annual salary that sources say he and the Lakers agreed to last week before talks collapsed. ESPN.com

But the difference between the first three years of a Heat contract -- worth nearly $19 million -- and the $27 million over three years offered by L.A. might not be as wide as it appears. It's estimated that the absence of state taxes in Florida would represent close to an extra $1 million per season of take-home pay for Odom. ESPN.com

I have learned that Lamar Odom had a phone conversation with Lakers owner Jerry Buss on Thursday. I am told the purpose of the call was to rebuild any bridges that Odom's agent, Jeff Schwartz may have burned by not responding to the Lakers offer of 3-years $30 million, and 4-years for $36 million. CBS 2

The Miami Heat, who traded Odom to the Los Angeles Lakers five years ago in the trade that brought Shaquille O’Neal to South Florida, have made the free agent forward an offer to return and help Wade once again. The team has not revealed terms of the offer, although it’s believed to be a five-year package that could be worth around $35 million. “I want Lamar to do what’s best for him and his family because we love him as family, but on the other hand, we want him back home, to come home,” Wade said Friday in a telephone interview. “His house is still there. It’d be exciting to see what happens.” Yahoo

Wade, who has asked the Heat to make some roster upgrades with hopes of getting back to the championship level, said he doesn’t need to call Odom to lobby for his return. “Lamar already knows how I feel,” Wade said. “I really don’t know how to feel. He’s really taken time to deal with it, sit back. It’s a very important decision in his life. It could be about where he ends his career.” Yahoo

The Heat have also been linked to a potential trade involving Utah forward Carlos Boozer, another close friend of Wade and his teammate from the 2008 Beijing Olympics. The South Florida Sun-Sentinel reported Friday that Miami “has not entered talks … but is monitoring” the Boozer situation. Yahoo

Steve Nash's agent, Bill Duffy, and Suns GM Steve Kerr said they have continued talks about a two-year contract extension with both sides feeling like they could be close. Arizona Republic

Suns Managing Partner Robert Sarver met with Duffy on Wednesday and the sides have continued talking and exchanging proposals since then. Arizona Republic

At 12:01 a.m. Saturday, the Cavaliers were able to offer LeBron James a contract extension because July 18 is the three-year anniversary of when he signed his most recent contract. It is believed the team will initiate contact soon to formally present an offer, which can be an extension of up to three years and around $65 million. James still has an option in his contract for the 2010-11 season, and the Cavs could offer three years on top of that. Cleveland Plain Dealer

James has said he will consider an extension offer if it comes, which of course it will. But there is no rush -- he has the option of extending his current deal until June 30, 2010, and has until the same date to exercise his one-year player option. Cleveland Plain Dealer

Signs point to James passing on his extension and waiting until next year before making a decision on his future. The two players who have the same options, Toronto Raptors star Chris Bosh and Miami Heat star Dwyane Wade, have indicated they will probably pass on extension chances this summer. Cleveland Plain Dealer

Jawad Williams is believed to be getting consideration from European teams, as well. "I tried to focus on playing defense and rebounding, things that will get me off the bench," Williams said. "We haven't figured out what is going to happen yet." Cleveland Plain Dealer

Knicks team president Donnie Walsh predicted negotiations with David Lee will come to a head early next week, and indications were Lee will either sign an offer sheet with the Trail Blazers or settle for the Knicks' five-year offer, which agent Mark Bartelstein still believes is below Lee's market value. If Portland doesn't come through and Lee still doesn't accept the Knicks' proposal, Walsh could pull the offer off the table next week. NY Post

The Blazers got back $10 million in cap room when the Jazz matched their four-year, $32 million offer to forward Paul Millsap. Bartelstein is trying to get the Blazers to offer Lee a five-year, $50 million contract, but they have been reluctant, feeling that the Knicks will match. NY Post

With his eye on the 2010 salary cap, Walsh is seeking a deal averaging between $7 and $8 million. Lee has agreed to backload a deal with the Knicks and take a pay cut for 2010-11. If Portland signed Lee to an offer sheet, it would attempt to add a poison pill clause for 2010-11. NY Post

Jerryd Bayless tweaked his right calf near the end of the Trail Blazers' 111-93 loss to the Denver Nuggets Friday night and is listed as day-to-day. The second-year point guard injured his calf when he gathered a lob pass from Pooh Jeter with 39.2 seconds left and hammered home an alley-oop dunk. Oregonian

It could be days or perhaps weeks, but it appears likely that the news of Sean May joining the Kings will eventually transpire. It could still fall through, but there are strong indications that the fifth-year, 6-foot-9 forward will be added to the Kings' roster on a one-year deal worth the league minimum for veterans of $884,881. The Kings would get a slight discount on the deal ($59,384) per the league's collective bargaining agreement, as the league helps foot the bill on veteran's minimum deals that are just one season. In the end, the Kings would pay $825,497 of May's salary. Sacramento Bee Blog

May worked out for the Kings and Portland separately on Wednesday and for Cleveland on Thursday, but canceled Friday's scheduled workout with the Clippers in a move that led to speculation that he had found a home. He showed off his 260-pound frame to the Kings while assistants Shareef Abdur-Rahim and Mario Elie taking part, with some media informally observing the session. Sacramento Bee Blog

It will take eight months for Yao's comeback if the operation is successful and everything goes smoothly in the rehabilitation period, according to Clanton. Yao spent some months weighing up the options of either surgery or a more conservative treatment, Oriental Morning Post reported. Yao consulted doctors about 10 times in the past two weeks, it said. Shanghai Daily

Yao ended rumors that he was going to retire after buying the Shanghai Sharks in an interview with Xinhua news agency yesterday. Yao said the rumors gathered momentum "after some angry words from me since my injury turned every one of my summer plans into rehabilitation programs." Shanghai Daily

Tau Ceramica agreed to terms of a contract with small forward Walter Herrmann, who inked a two-year deal with the Euroleague powerhouse on Friday. Herrmann (206, 30) arrives from the Detroit Pistons, where he averaged 3.9 points and 1.8 rebounds in 60 NBA games last season. He has previously played three Euroleague seasons with Unicaja, averaging 7.3 points and 1.6 rebounds in 15 games in the 2005-06 season. Euroleague.net

It was inevitable, the emergence of "I Dunked On LeBron" T-shirt, after Xavier University's Jordan Crawford threw one down over the Cleveland Cavaliers' LeBron James at James' recent basketball camp in Akron. Cleveland Plain Dealer

A federal judge threw out the Securities and Exchange Commission's insider-trading charges against Dallas Mavericks owner Mark Cuban, and undercut the SEC's legal argument in a way that could make it more difficult to prosecute similar cases. The ruling by U.S. District Judge Sidney Fitzwater in Dallas was vindication for Mr. Cuban, who maintained his innocence from the day the charges were filed in November. Wall Street Journal

The judge gave the SEC 30 days to refile charges if it can make stronger allegations against Mr. Cuban. The SEC declined to comment on the ruling or say what it plans to do, but outside lawyers said its chances of prevailing on a second try are low. "My assumption is they already put in all their best facts, and the court said those weren't sufficient," said Russell Duncan, a former SEC enforcement attorney now with Orrick, Herrington & Sutcliffe LLP. "You take your best shot the first time out." Wall Street Journal

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