I think they needed to move him to clear the space for Chandler. Turiaf's 4.5 million + Billups 14 million or whatever needed to be off the books in order to sign Chandler and fill out the rest of the roster from what I understand.
The Knicks will have this cap space once and only once. It behooved them to use it on the best player who would take their money. Moreover, using it on a center -- the most expensive position -- made all kinds of sense. Guards are dramatically less expensive; you can get good ones using the midlevel exception. So the Knicks will more than happily use that exception each of the next three years. ...
... And this one! Because in a nice bit of cap management, the Knicks set this up as a sign-and-trade, meaning they never signed a free agent using cap space and thus retain all of their exceptions.
In the meantime, New York can add two backcourt pieces with the newly generated exceptions -- if you're wondering, they can't sign Chauncey Billups, whom they intend to amnesty the rest of this season -- and plenty of good guards are still available. And while we're at it, I'll just throw this out there now: In the summer of 2012, Steve Nash and Grant Hill can be had as a combo deal with the midlevel and biannual exceptions, respectively.
The Knicks did one other cute little piece of cap management: They've set themselves up for a four-year run with the Melo-Amare-Chandler group, and then they can bust out the TNT and try again. All three players have deals that expire after the 2014-15 season, as will whomever the Knicks pick up with this year's midlevel and, if he signs a three-year deal, Nash (and yes, I am getting ahead of myself. Thanks for asking.)
Everything I was reading on Twitter seemed to imply that they lost the MLE, but if true, this is a great bit of cap management. That extra exception could be used on Barea for example.
But the more you look at this deal with respect to decisions New York has already made, the more sense it makes, and the more you have to tip your cap to Glen Grunwald and Mark Warkentien for thinking outside the box.
Additionally, the fit for New York is impeccable. With two forwards that are somewhere between agnostic and allergic to defense, Chandler can protect the rim for New York and provide some modicum of resistance for what was previously a lineup full of DHs. Stoudemire will also be saved from the banging of playing the center position, which he did much of the time last season. If Chandler (with a little help from Toney Douglas) can just make the Knicks average on defense, the two forwards will take care of the rest.
Really liking the way they've set up the team now. Still pissed at Dolan for interfering in the Melo trade last year, but it seems that Grunwald & Warkenstein have their **** together. As Hollinger says, they've set it up well given the starting point they were handed.