The deal is not dead, but it is no longer progressing. The Cavs, who have until Jan. 7 to trade Bynum before his contract becomes guaranteed and loses its instant value in a trade, are now actively seeking other options.
The major issue, sources said, involves the Lakers' desire to get an additional asset from the Cavs beyond Bynum's team-friendly contract, which could save the Lakers more than $20 million in salary and luxury taxes. The Lakers are interested in also getting a young prospect or a first-round draft pick as part of the deal. The Cavs have been reluctant to part with either.
To satisfy NBA trade rules, the Cavs would have to add at least one more player to any trade involving Gasol for Bynum. Gasol is in the last year of a contract that pays him $19.3 million. Bynum's contract is for $12.25 million but is only half guaranteed before next week, which is why the Lakers are interested. By trading for and then waiving Bynum, the Lakers could take themselves below the luxury-tax threshold for the first time in seven years.
The Lakers, though, remain reluctant to part with Gasol before giving the team time to recover from a wave of injuries that have derailed its season, sources said. Jordan Farmar was the latest Laker to go down, tearing his hamstring and being declared out for a month on Wednesday. Los Angeles (13-19) has lost six games in a row.
There is some pressure for the Lakers to get out of the luxury tax to help with future flexibility. If the Lakers remain in the tax this season, going into the tax in either of the next two seasons would trigger a "repeater tax" the franchise hopes to avoid. The Lakers are planning to be major free-agent players the next two summers.
Gasol, no stranger to trade rumors, addressed the latest one after the Lakers' practice Thursday.
"I'm more accustomed to them and I deal with them better than I did at first, when it started," he said. "But it's just a reality, and I just got to stay cool and keep my mind on the game as much as I can."
He also said he wants to remain in Los Angeles.
"It's my home, it's my team," Gasol said. "It's the team that I've been through so much with, and I'm not the type of guy that likes to jump ship because everything is not going right right now. So, I'm a loyal guy. I'd like to continue to be here and fight with the guys that are here and once we get bodies back, everything will be better. But right now, I'd like to continue to stay here. This is my team, this is my city."
The Cavs (10-21), meanwhile, have also lost six in a row, but they are maintaining hope of making the playoffs for the first time in four years.
In 2012, the Lakers and Cavs engaged in protracted talks for weeks before making a deal just hours before the trade deadline that sent Ramon Sessions to Los Angeles for Luke Walton and a first-round draft pick.
That was also a money-based deal, as shedding Walton's contract saved the Lakers in excess of $15 million in salary and luxury taxes. It appears possible these talks could go down to the wire next week as well.
Information from ESPNLosAngeles.com's Dave McMenamin was used in this report.