From Frank Isola of the Daily News:

According to a team source, Knicks president Donnie Walsh recently rejected a three-team deal that would have sent Anthony Randolph to Indiana, a first-round pick to Portland and Fernandez to New York.

Because the Trail Blazers are insisting on receiving a first-round pick in return for Fernandez, the Knicks likely need to recruit a third team in order to complete a deal.

As it stands, potential trade partners are not enthralled by the prospect of having to wait until 2014 for a pick, which is why a third team (Indiana) would have to be recruited. And you have to think the Knicks would be able to get more for Randolph than Rudy. Rudy may well have already reached, or at least neared, his full potential, while Randolph still has a tremendous amount of room to grow. Even at the moment, the difference between the two may not be that dramatic to warrant a swap. Last year, Randolph produced 7.1 more points per 40 minutes than Fernandez (25.3 to 18.2), despite being four years younger.