The New York Knicks traded Dalen Terry, two second-round picks, and cash to the New Orleans Pelicans for Jose Alvarado. The Brooklyn native has a chance to play in his home state. Here is what Alvarado’s contract looks like on his new squad.
What’s the Break Down on Jose Alvarado’s Contract After Trade to Knicks?
Alvarado signed a two-year, $9 million veteran contract extension with the New Orleans Pelicans that began this season. However, his money now becomes New York’s responsibility. The Knicks owe Alvarado $4.5 million for this season, but the 27-year-old holds a $4.5 million player option for the 2026-27 campaign. He must decline or accept his option by June 29, 2026.
New York adds proven, veteran depth without taking in big contracts or sending out any core players. It traded Guerschon Yabusele for Dalen Terry less than 24 hours ago before re-routing the former Chicago Bulls guard to the Pelicans. Alvarado only takes up 2.9% of the cap this season and 2.7% next season if he accepts the player option.
Alvarado started his career with the Pelicans as an undrafted prospect on a two-way contract. He made a great impression on the franchise with his tenacious on-ball defense and turnover creation. The guard then signed a four-year, $6.9 million deal before the Pelicans extended him. He remains a great development story. The former Georgia Tech prospect has earned over $11 million in his five-year NBA career.
Alvarado played in 41 of the Pelicans’ first 53 games this season, averaging 7.9 points, 3.1 assists, and 0.9 steals in 21.9 minutes per contest. He started the season in the rotation but experienced some minutes inconsistency as the campaign progressed. New Orleans drafted Jeremiah Fears with the seventh pick in the 2025 NBA Draft, so Alvarado did not fit seamlessly into its long-term plans.
While Alvarado’s calling card lies on the defensive end as a havoc creator, he improved as a perimeter shooter. The guard shoots 36.3% from beyond the arc on 4.7 attempts per game. The Knicks rank inside the top seven in 3-pointers made and attempted, as well as efficiency, so Alvarado brings even more shooting to his new squad.
Alvarado May Have a Bigger Role Than Initially Expected
Less than an hour after ESPN’s Shams Charania announced the trade, the Knicks received troubling news. The Athletic’s Fred Katz reported that Miles McBride could be sidelined until the playoffs due to undergoing surgery for a sports hernia. McBride operated as the sixth man for New York and handled the ball a lot when Jalen Brunson went to the bench.
BREAKING: Knicks guard Miles “Deuce” McBride will undergo surgery Friday on a core muscle injury, more commonly referred to as a sports hernia, and could be sidelined until the playoffs, league sources tell @JLEdwardsIII and myself.
Story coming soon.
— Fred Katz (@FredKatz) February 5, 2026
The Knicks likely now lean on Alvarado as the clear backup point guard. Jordan Clarkson, who is outside of the rotation, could return, as New York needs more shot creation with McBride out.
