Jose Alvarado’s impact makes for difficult contract extension negotiations with Pelicans

Jose Alvarado was not shy about expressing admiration for the city.

“I think the regular season went pretty good…,” admitted Alvarado. “But, you know, I’ve got a lot to improve, that I want to improve. But yeah, the regular season was cool but this playoffs series made me, personally, think (about improvements). I’ve got to figure it out, which I will, and go into this offseason to keep improving. I feel like that’s what I do. Just keep on it and try to improve.”

But how much can the three-year veteran improve, and where? Alvarado has bettered his three-point shooting by around four percent every season already. Hitting a respectable 37.7% this season kept defenses honest but it’s still just the 62nd-best mark among guards shooting at least 5 three-pointers per 100 possessions. However, that’s right around the cut-off for reserves, adjusting rookies, and roster filler that’s stashed in the G-League when paired with Alvarado’s assists rate.

Alvarado, whose Net Rating jumped to +12 this season, is not going back to the G-League’s Squadron though. He is tied with Alex Caruso and Shai Gilgeous-Alexander for the sixth-best steal rate per 100 possessions. Pesky reserves who can shoot, keep teammates involved, cut turnovers down, and rattle opponents into giving up transition buckets is going to get paid more than the NBA veteran minimum rate.

The Pelicans have a 2024-25 Club Option on Alvarado worth $1.98 million, just 1.4% of the salary cap. New Orleans needs Alvarado’s energy on the court but that contract provides a lot of financial wiggle room to build out the rest of the roster around Zion Williamson. It does not provide Alvarado much job security though.

As a fifth-year veteran in 2025-26, when an extension would kick in, Alvarado is in line for a minimum of just over $2.4 million per season. The 30th pick in that year’s draft will make approximately $2.7 million. The Pelicans can offer a four-year deal, taking Alvarado through his age-30 season, at just above that number and consider it a value. Alvarado cannot ask for much more per season, given the opportunity costs and team control over a younger player.

So what would a fair deal look like considering market comparisons? This is one just above-minimum structure that also includes the CBA-allowed maximum of 8% raises.

• 2025-26: $2.85 million
• 2026-27: $3.07 million
• 2027-28: $3.32 million
• 2028-29: $3.59 million
• Total: $12.83 million

It is doubtful Alvarado would turn down such a deal with so much uncertainty in the free agent market next summer. The 2025 NBA Draft is loaded and at least a dozen former All-NBA names could be free to move franchises. Locking up a guaranteed deal now is a far safer bet than risking injury in hopes of a breakout season in 2024-25. The front office cannot overlook the political capital gained with such an inexpensive move either.

Alvarado is a known commodity worth keeping around at just above the current minimum level rates. Every Smoothie King Center fan polled during the NBA Playoffs hopes he never leaves Crescent City. Alvarado feels the same but knows the business can take players down unexpected paths, but that’s how he wound up in New Orleans to begin with.

“I hope for the best. I love New Orleans. We’ll figure it out. (The front office) has more important things to figure out first. Then me. But that’s okay because I want that important piece to be figured out before me because then my decision will probably be easier.”