Schefter says Dolphins owner Stephen Ross made the final decision not to move forward after contingencies he wanted were not met.
Aaron Wilson reported earlier today a trade before the trade deadline between the Texans and Dolphins was viewed as unlikely.
Wilson says the two sides can always revisit talks again in the offseason if they don’t pick up momentum later today.
He adds no settlements are imminent or developing for Watson’s 22 civil cases of sexual misconduct.
Reports have said Ross has insisted upon Watson clearing up his legal situation before they get a trade agreement in place with the Texans.
Trade talks between the Texans and Dolphins reportedly intensified last week, but they were unable to strike a deal at that point.
McClain previously mentioned that the two teams had a framework for a trade agreed upon last week that included three first-round picks.
However, Mike Florio reported that once the Texans caught wind of Watson potentially settling, their asking price on Watson went up.
League sources have told McClain that Texans GM Nick Caserio was open to the trade if the Dolphins give him what he wants. Otherwise, he’s willing to wait until the new league year begins next March to see if more teams are interested in Watson.
According to McClain, Watson has told the Texans he won’t approve any trade except to Miami, which could hurt Houston’s ability to work a deal with a different team next year.
Watson has already rejected a trade to the Eagles.
Watson, 26, was taken in the first round of the 2017 NFL draft out of Clemson by the Texans. He signed a four-year, $13.854 million with the Texans that included a fifth-year option around $17.3 million for the 2021 season.
The Texans signed Watson to a four-year deal worth as much as $177 million heading into the 2020 season, paying him $39 million a year.
In 2020, Watson appeared in all 16 games for the Texans and completed 70.2 percent of his passes for 4,823 yards with 33 touchdowns and seven interceptions. He also rushed for 444 yards and three touchdowns.
We’ll have more on Watson as the news is available.