After spending much of the postseason playing a bit role off the bench, Jose Alvarado has graduated to a necessity against the San Antonio Spurs. His stay-readiness has helped position the New York Knicks to win their first title since 1973. It may have also earned him a bunch of extra money ahead of free agency.
Alvarado has a $4.5 million player option for 2026-27. Even before he was a catalyst behind the greatest playoff comeback in NBA history, this money tilted toward below market. He would be the primary backup guard on rosters that don’t have Deuce McBride or Landry Shamet. That is worth more than sub-3 percent of the salary cap.
Fortunately for the Knicks, they can match any offer he receives if he opts out. Reserve guards also don’t typically top summer wish lists. Unfortunately for New York, Alvarado doesn’t need to be another team’s priority No. 1 to complicate an already-complex offseason.
We can’t assume the Knicks will pay whatever to keep this roster together
Early indications suggest the Knicks plan to re-sign Mitchell Robinson and Landry Shamet, and cannonball into the second apron for the first time. If that was their intent prior to the NBA Finals, it most certainly will remain the plan should they, as expected, close out the Spurs to win it all.
Still, there are limits to even how much James Dolan will pay to float this core.
If Jose Alvarado opts out of his contract, the Knicks will have about $21 million in room beneath the second apron. But that total only includes eight players. New York will blow past that number when incorporating the No. 24 pick, Robinson, and Shamet. We also cannot forget Mohamed Diawara, a restricted free agent the Knicks probably want to keep around.
Depending on how much Alvarado commands, New York could easily go from $20-plus million under the second apron, to more than $20 million over it.
Jose Alvarado will have a market
Offering Alvarado a slight raise might be enough to lock him down. Then again, “slight” may not be enough. Alvarado is only 28, and has never been caps-lock PAID. Money will surely be a priority.
As someone who remains disruptive on defense, is shooting 37.5 percent on threes in the playoffs and has proven not only that he can play in the Finals, but can do so alongside another small guard in Jalen Brunson, the Knicks can’t necessarily get away with offering $6 million or $7 million per year. That is mini mid-level money. Plenty of teams will be open to paying him as much, if not more, while offering a larger role.
Dismiss potential outside interest at your own risk. Rival teams absolutely make decisions off smaller samples. Alvarado could be this summer’s Bruce Brown Jr., who in 2023 received an inflated two-year deal from the Indiana Pacers after contributing to the Denver Nuggets’ championship run.
This all becomes moot if the Knicks are willing to break open multiple piggy banks. Depth is the new currency for serious contenders, and they finally have it. Losing any of it following a title run wouldn’t sit right.
We know how these things work, though. NBA teams aren’t just run on vibes, or even on-court logic. They are billion-dollar businesses. The Knicks are no different.
Alvarado’s Finals breakthrough is first and foremost a blessing. But with other free agents to pay, not to mention McBride entering the final year of his deal, it is also a complication that could lead to some tough decisions—and even tougher exits.
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