HOUSTON — The New York Knicks have acquired disgruntled guard Tracy McGrady and his massive expiring contract in a three-team swap with the Houston Rockets and the Sacramento Kings, a person with knowledge of the negotiations tells The Associated Press.

The person spoke Thursday and requested anonymity because the deal has not been officially announced.
The Knicks will also get Sergio Rodriguez from the Kings, though the lure of the deal was McGrady and his expiring $23 million contract.
The Rockets will get guard Kevin Martin and forward Hilton Armstrong from Sacramento and forward Jordan Hill, Jared Jeffries and draft considerations in 2011 and 2012 from New York. They’re also relieved to have finally found a taker for McGrady, the troublesome seven-time All-Star they’ve been trying to trade for almost two months.
The Kings will get New York guard Larry Hughes and Houston forwards Carl Landry and Joey Dorsey.
The Knicks have been courting McGrady — or at least the financial benefits of his contract — almost since the moment in late December when the Rockets granted him an indefinite leave and announced they were trying to trade him.
While interested in seeing McGrady play for the last two months of a lost season, New York is more interested in dropping their payroll and becoming a major player in this summer’s free-agent sweepstakes.
Jeffries and Hill will make almost $10 million together next year so by including them in the deal, the Knicks will open enough salary cap space to offer nearly two maximum contracts to the free agents available after the season, starting with LeBron James.
The Knicks and Rockets had reportedly been working on a deal for a while, but couldn’t finish it without involving another team.
Early Thursday morning, Houston traded McGrady to Sacramento for Martin, Rodriguez and Armstrong. The Kings acquired Landry, Houston’s most productive bench player this season, and the seldom-used Dorsey in that deal, first reported by KRIV-TV and the Houston Chronicle.
The Rockets wanted to maximize what they could get for McGrady and ended up with two players they’ve coveted — Martin and Hill.
Martin is the Kings’ second-leading scorer (19.8 points per game) after missing two months of the early part of the season with a broken left wrist. He played two seasons for Houston coach Rick Adelman when he was in Sacramento from 2004-06, and he adds some much needed perimeter shooting to the Rockets’ lineup.
And the 6-foot-10 Hill will slide into Landry’s role, bringing energy and rebounding off the bench.
The downside for Houston is absorbing Jeffries’ contract, which will pay him about $6.9 million next season. The Rockets pushed for the Knicks to also give them future draft picks to compensate.
Landry is Houston’s second-leading scorer (16.1 points) and third-leading rebounder (5.5 per game). The Rockets acquired him in a draft-day deal with Seattle in 2007. He scored 19 points in Houston’s 127-99 win over Milwaukee on Wednesday night.
The most uncertain part of the deal is the future of McGrady himself. He’ll turn 31 in May and has played in only 107 games over the last three seasons because of injuries.
He opted for high-risk microfracture surgery a year ago, spent last summer rehabilitating with former Michael Jordan trainer Tim Grover in Chicago, then insisted at training camp last fall that he was ready to play again. The Rockets remained hesitant to return him to the regular rotation, and Adelman admitted in December that McGrady never progressed to the point where he was ready to reclaim his full-time role.
McGrady’s representatives asked the Rockets to look for trade options and Houston agreed.
The Rockets acquired McGrady in June 2004, hoping that he and Yao Ming would return the franchise to prominence. He averaged 22.4 points and 5.7 assists in five seasons in Houston before this one, but he was always blamed — sometimes unfairly — for the team’s string of playoff busts.
McGrady averaged 25.7 points and 5.5 assists in his first season in Houston, but the Rockets lost to Dallas in the first round of the playoffs. The Rockets also lost in the first round in 2007 and ’08, though McGrady averaged at least 25 points, six rebounds and seven assists in each series.
His health started becoming an annual issue in 2005-06, when he missed 34 games with back injuries that lingered into the following season. He hurt his elbow and his knee early in the 2007-08 season and missed 16 games. He was in and out of the lineup during the 2008-09 campaign and finally opted for the season-ending surgery around the All-Star break.
Without him, the Rockets won their first playoff series since 1997, then fought the Los Angeles Lakers to seven games in the second round.
NBA players have had mixed results coming back from microfracture knee surgery — Jason Kidd, Amare Stoudemire and Antonio McDyess are among the success stories; Chris Webber, Anfernee Hardaway and Jamal Mashburn are part of the group whose careers were never the same.
McGrady, a two-time scoring champion when he played for Orlando, couldn’t convince the Rockets this year that he could return to his old form after offseason knee surgery. He played a total of 46 minutes in only six games before becoming dissatisfied with his role.