UPDATE: Reports: Thunder to acquire Cavs G Dion Waiters in 3-team deal with Knicks

Well, this is pretty shocking.

Via ESPN's Brian Windhorst:

The Cavs are in three-way trade talks with Oklahoma City and the New York Knicks, sources tell http://t.co/TuqTxo4mlP

— Brian Windhorst (@WindhorstESPN) January 6, 2015

Framework of trade being discussed is Dion Waiters to OKC, JR Smith to Cleveland and Reggie Jackson to Knicks, sources told ESPN

— Brian Windhorst (@WindhorstESPN) January 6, 2015

The details are still to come, but that's a pretty surprising move by a Thunder team that is only just now getting healthy. Jackson was set to become a restricted free agent this summer, and Thunder GM Sam Presti had indicated that the Thunder were prepared to keep him here for the long term. This trade, obviously, contradicts that.

UPDATE:

Not so fast!! Via Yahoo's Arian Wojnarowski:

Reggie Jackson is not included in a deal to the Knicks, league sources tell Yahoo Sports. So far, unclear if he's headed anywhere at all.

— Adrian Wojnarowski (@WojYahooNBA) January 6, 2015

There's a lot going on here. Stay here as we get it all straightened out.

UPDATE #2:

Well, this trade news has literally broken Twitter. But here is the latest report that just aired on Sportscenter. According to Marc Stein, Lance Thomas is the only Thunder player involved.

This new offer is much more favorable for OKC. It also is a bit of a departure from a team that critics love to pin with the "cheap" label. Could this be the Thunder's signal that they are finally going for it in the here and now? Giving up a future first rounder certainly suggests so.

The trade uses up the Thunder's trade exception, and also puts them about $2.3 million over the tax line. The Thunder have infamously avoided paying the luxury tax, so it wouldn't be at all surprising if more moves were to come to clear that space back up.

Given his decreased playing time of late, as well as the fact that his salary is almost exactly that figure, Jeremy Lamb seems to be the likely candidate to be a trading chip. The trade means that OKC now has Waiters, Andre Roberson, Anthony Morrow and Lamb as shooting guards, not to mention Perry Jones III who plays that role from time to time.

Of course, all of that is speculation, and it's entirely possible the Thunder are content to feel it out and, if need be, pay the tax.

Last note: The Thunder is also sending a protected future first-rounder to the Knicks in the deal:

Protection on OKC first rounder to Cavs: top 18 protected this year, top 15 protected in '16 and '17 then becomes 2 second round picks.

— Brian Windhorst (@WindhorstESPN) January 6, 2015