The Toronto Raptors are reportedly moving closer toward a trade with the Memphis Grizzlies for forward Rudy Gay.

 

UPDATE: Wednesday, Jan. 30, at 5:30 p.m. ET by Richard Langford 

ESPN's basketball insider Marc Stein is all over this, and he is reporting there is a deal in place, but that the third team needed in this deal is still up in the air. 

---End of update---

 

UPDATE: Wednesday, Jan. 30, at 4:35 p.m. ET by Ben Chodos

Yahoo! Sports' Adrian Wojnarowski has reported that the Raptors and Grizzlies are continuing to make progress on a trade for small forward Rudy Gay. Wojnarowski notes that the latest rumors involve Toronto giving up point guard Jose Calderon and power forward Ed Davis:

---End of update---


UPDATE: Tuesday, Jan. 29, at 1:49 p.m. ET by Tyler Conway

Though the Raptors and Grizzlies are still fully engaged in trade talks, they have hit a snag in negotiations. According to Yahoo! Sports' Adrian Wojnarowski, the two sides are having trouble finding a third team to take on point guard Jose Calderon:

The Toronto point guard is currently in the last year of his contract, but has a $10.56 million cap hold this season. That makes his contract hard to move because Memphis doesn't want to take it back, and there aren't many teams that have the space and assets to make Calderon's deal work.

---End of update---


Marc Stein of ESPN.com broke the news late Monday night.

Although the framework of a workable trade has not yet been established, sources told ESPN.com that Toronto -- known to be perhaps Gay's most determined suitor -- has continued to make a hard push for the swingman.

Stein was unable to delve into the specifics of a possible deal, but wrote that Toronto would make Ed Davis and Jose Calderon the centerpieces of any trade.

Stein also went on to write that a deal involving Gay and the Raptors could involve a third team. In addition to Calderon, Kyle Lowry and Andrea Bargnani have been mentioned as possible trade chips.

Buying or Selling Rudy Gay and the Biggest Trade Chips

Gay has been the subject of much speculation this season. With the $37 million he's due over the next two seasons, the Grizzlies need to offload Gay's contract in order to not run seriously afoul of the luxury tax.

Should the Memphis Grizzlies trade Gay this season?

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Memphis just traded Wayne Ellington, Josh Selby and Marreese Speights to the Cleveland Cavaliers in order to free up some cap space, allowing the Grizzlies to hold onto Gay through the Feb. 21 trade deadline.

Still, holding onto Gay this season likely gives the Grizzlies the best possible chance to make a deep postseason run. It makes sense that a 29-15 team sitting in fourth in the Western Conference would be hesitant to part with one of its best players.

Although the team has held firm in the stance that it feels no pressure to move Gay, the immediate financial flexibility created by the multi-player Cavs trade allows the Grizzlies to ask for a much higher trade haul in any potential deal.