The Knicks are offering packages including Iman Shumpert, Raymond Felton and Beno Udrih, sources say. They have been reluctant to include sharpshooting rookie Tim Hardaway Jr. or a future first-round draft pick in any deal. One of those two pieces is believed to be a prerequisite for Toronto to consider giving up Lowry.
"It comes down to, can they talk themselves into getting rid of a first-rounder or Hardaway Jr. for Lowry?" one league source said.
Recent reports have stated the Raptors are no longer willing to deal Lowry, content to see how the rest of the season plays out. Lowry has been one of Toronto's best players, and dealing him would send a bad message to the fan base.
One scenario to keep an eye on, though, is the possibility of a three-team deal involving the Hawks and point guard Jeff Teague. Atlanta has all of its first-round picks in the next four drafts and could conceivably send one to Toronto to satisfy the Raptors' demand for a draft pick.
League sources say a scenario in which Teague ends up in Toronto, Shumpert goes to Atlanta and Lowry winds up in New York has been discussed. Another scenario could have Teague ending up in New York. The conversations are believed to be preliminary.
Grantland's Zach Lowe reported last week that sources told him Hawks GM Danny Ferry "is not in love" with Teague's four-year, $32 million deal. It's unclear if a potential Hawks-Knicks-Raptors deal would return enough talent to Atlanta to justify moving Teague.
Shumpert, though, could be viewed as a nice piece for Atlanta. Despite his struggles this season, he is still highly regarded by talent evaluators around the league and is still on his rookie contract.
Any deal for Lowry would be a risk for the Knicks because he will be a free agent this summer -- though the risk of losing him wouldn't be as great if the Knicks were involved in a three-team deal and didn't have to part with a first-round pick or Hardaway.
Also, if the Knicks acquire Lowry via trade, they would be able to exceed the salary cap to re-sign him as a free agent.