So basically, Melo will be traded this summer. He has set out an impossible task. There is a candid interview he had with Marc Spears of Yahoo. He isn't talking about competing for the playoffs. He said championship, and he wants to next year.
That means Durant or Lebron and neither of them is coming to the Knicks. And as such, Melo will demand to be traded.
Knicks have 18 mill available in FA this offseason. Stretch provisioning Calderon opens up another 6.
Knicks should trade Melo to Cleveland. Let's say they don't elect to do a full rebuild and aim to contend in the next 2-3 years. Trade Melo for Kyrie.
The move saves an addition 9 mill, although it could just be 7, I am uncertain if the 2 mill trade penalty incurred by trading Melo (provision set in his contract) hits the cap or is just something paid out to Melo. That allows the Knicks, at minimum, the ability to sign a max FA.
Kyrie is 23, fits the future plan, and fits the triangle like a glove.
The clear max FA choice, to me, is derozan. Another shooter.
That team may or may not make the playoffs but it will be an improvement to this year. The year after should see them targetting a 3, 5, and more depth, through more available cap (afflalo, Williams leaving and potential Lopez/oQuinn trades), and a probable decent draft pick.