Marion met face-to-face with Pacers president Larry Bird Monday, according to sources close to the situation, after Bird urged the free-agent defensive specialist and former All-Star to come to town to consider signing with Indiana in the wake of the devastating compound leg fracture suffered by Pacers star Paul George.
Heading into Monday, the Cavaliers were widely considered to be the front-runner to sign Marion, despite the fact that Cleveland is restricted to offering him a minimum salary of $1.4 million after using all of its cap resources and exceptions elsewhere.
The Pacers ultimately will be granted a $5.3 million disabled player exception by the league in the wake of George's season-ending injury suffered late last month on Team USA duty, so Indiana does have the means to outbid Cleveland. But the Pacers would stray into luxury tax territory if they spend more than $1.7 million of that exception.
Sources say that Marion, meanwhile, has maintained for weeks that he hopes to wind up with a championship contender if he leaves the Dallas Mavericks in free agency, so it remains to be seen whether Indiana's financial advantages can trump the promise of championship contention playing alongside James in Cleveland.
Marion spent the past five seasons with the Mavs and helped them win the first championship in franchise history in 2011 as a key role player who guarded players at four different positions.
A week ago, Marion traveled to Cleveland to meet face-to-face with Cavaliers general manager David Griffin and new coach David Blatt. Marion and Griffin have a good relationship after their days together with the Phoenix Suns, during which the 36-year-old made four trips to the All-Star Game.