I've gotten a little lost here. Let me try and get my ducks in order here ...
(1) I'm a big fan of Gallinari. I think he has the potential to be a perennial All-Star (possibly more).
(2) Gallinari is currently a worse player than Ray Allen because of his defense. I reckon he can come close to Ray's offensive value + provide better rebounding.
(3) Main reason for acquiring Gallo over Ray would be 3-5 years from now rather than the next two seasons. Plus, going forward beyond those next five years.
(4) I don't think the Knicks do this trade. My interest in the trade idea is whether there's value here for the Celtics in this specific trade + whether a similar trade with the same principles in mind (large salary payout for good long term talent with a small decrease in current talent) would have value for the Celtics.
The question is, is that team better than if they simply resigned Ray for $8 million, House for $3 million, and then used the MLE (and the salary would still be lower than the one you proposed)? Personally, I think it is significantly worse.
(1) House for $3 million + MLE + filling out the rest of the roster ... is equal in my mind to filling out the C's roster for $10 million (similar cost, little less) + Gallinari.
(2) Jeffries is roughly the same cost as Ray Allen
(3) Difference in team's salaries is basically Eddy Curry's contract.
(4) I expect the gap to close again between Ray and Gallinari next season. That would make the team comparable talent wise under either scenario. If Gallinari can make a large improvement, then he can pass out Ray Allen as an individual player and improve the Celtics in the process.
(5) The cost of Eddy Curry's contract ($22.5 million after luxury taxes) will provide no added benefit to this year's Celtics team and possibly no benefit to next year's team. I do expect it to make this year's team worse, but by a small margin, but do not expect it to make next year's team worse. The benefits from this added cost will arrive in subsequent seasons.
(6) I don't know whether the Celtics brass would be willing to take on that financial cost with no definite benefit for the next two seasons. I don't think the finances are so far out of hand ($85 mil similar to this season's wage bill) that they definitely reject it ... but it is a large cost. Benefit worth the cost? Depends on their willingness to take on those losses. Could go either way, 67-33 against would be my guess.