I feel like if this would go down Chicago and NY would just work something out together especially if the Knicks could get two first round picks this year since they are completely drained of them for quite sometime. With them both being an expiring at least they get something for Melo.
Knicks trade: Melo
Bulls trade: Boozer (expiring), Dunleavy (expiring to make salary match), JButler, pick 16 and pick 19.
http://espn.go.com/nba/tradeMachine?tradeId=m2w9plt
Works in the trade checker as of this season but I'm not sure if the bulls would have to send over one more salary filler or not.
Bulls go into next year with Rose, Snell or FA guard, Melo, Gibson, Noah.
Knicks kinda wash in 14-15 but have: Felton, shumpert, butler, boozer, chandler with amare, shumpert bargs, 16 and 19.... (which really isnt super terrible for the east). and then between bargs, amare, boozer, chandler theyd have almost 60 mil coming off the books to throw at FAs and young role players of shumpert, butler, the 16th and 19th picks.
Money matters. Boozer is expensive.
Lets look at your trade from the Knicks perspective:
If they got Boozer, Dunleavy, and Butler, their team salary next year would be the following, assuming they signed their two draft picks for slot-level deals, signed no other free agents, and released their non-guaranteed players, for a total roster of 13 players:
$89,684,404
Assuming the luxury tax line of $77 million as recently reported, this would cost New York an extra $35 million in luxury tax dollars. Salary and luxury tax combined gets you to near $125 million, for a team that you probably want to miss the playoffs for a better draft pick. I know Dolan is rich and crazy, but is he that rich and crazy? That's a lot of money to spend on a terrible team.
Alternatively, if the Knicks can get a pick or two for Melo, but take on no salary, they could keep salary in the $70-$75 million range, and out of the luxury tax. I'm not sure two picks and Jimmy Butler is worth $50-55 million. In my mind, it definitely makes sense to try to get a pick for Melo, but asking for too much is going to cost a lot of dollars. It's why there's room for a third team to step in. I don't know if that team is the Celtics or not, but it makes a lot of sense for NY to find another dance partner.
EDIT for math error: