Sources: Pacers eye Jamal Crawford

The Indiana Pacers have extended a two-year offer worth $10 million to Atlanta Hawks free agent Jamal Crawford that would enable Crawford to return to free agency next summer, according to sources with knowledge of the deal.

The Pacers have been chasing Crawford and Memphis Grizzlies guard O.J. Mayo, determined to land a guard that can attack and create his own shot before the season starts Christmas Day.

The offer to Crawford, which would pay him $5 million annually, includes an opt-out after the first year to allow Crawford to join the free agent class of 2012 if he chooses.

But Indiana's latest attempt to complete a trade with the Grizzlies for Mayo, after a deal struck between the teams last February collapsed on deadline day, has been scuttled again.

The Memphis Commercial Appeal reported earlier Tuesday that the Grizzlies have informed Mayo that he's not going anywhere and that Pacers free agent Josh McRoberts is likely to sign with the Los Angeles Lakers, now that he won't be traded to Memphis for Mayo.

The Pacers, though, are still facing heavy competition for Crawford.

The Minnesota Timberwolves, sources said, remain interested in signing Crawford to play shooting guard next to Spanish rookie Ricky Rubio, with J.J. Barea already signed away from Dallas to play both spots. The Wolves could get into the bidding for Crawford if they choose to release a veteran through amnesty -- the candidates include Luke Ridnour, Brad Miller or Martell Webster -- to create the needed salary-cap space.

The New York Knicks, meanwhile, continue to recruit Crawford hard, despite the fact that they can't offer a starting salary above $2.5 million unless they can concoct a sign-and-trade deal involving at least three teams. The Hawks are unwilling to participate in sign-and-trades that would raise Crawford's salary without a third team because of luxury-tax concerns.

Portland and Sacramento, sources said, also remain in the hunt for Crawford, who ranks on most teams' lists as the most prolific backcourt scorer in the 2011 free agent class.

Marc Stein is a senior NBA writer for ESPN.com.