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Report: Pelicans signing two-way Jose Alvarado to four-year, $6.5M contract

Pelicans guard Jose Alvarado

NEW ORLEANS, LOUISIANA - MARCH 26: Jose Alvarado #15 of the New Orleans Pelicans reacts after scoring a three point basket during the second quarter of an NBA against the San Antonio Spurs game at Smoothie King Center on March 26, 2022 in New Orleans, Louisiana. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement. (Photo by Sean Gardner/Getty Images)

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Signed to a two-way contract after going undrafted out of Georgia Tech, Pelicans rookie Jose Alvarado has had one of the most endearing seasons in the NBA.

The New York native basked in getting interviewed in front of friends and family after New Orleans beat the Knicks in Madison Square Garden:

Not prominent on the scouting report, Alvarado checking in caused Timberwolves guard D’Angelo Russell to ask (presumably his own team): “Can he shoot?” While dribbling, Alvarado called out, “Yes, I can shoot:"

Alvarado has repeatedly hid in the corner when opponents inbound then wreaked havoc in the backcourt:

Now, Alvarado is getting a standard contract.

Shams Charania of The Athletic:

Alvarado’s minimum salary over the next three years is $5,388,212. So, if he’s getting $1.5 million the rest of this season, the total deal must be worth more than $6.5 million.

But whatever the exact details, the overall picture is the same: Alvarado is betting against himself, and the Pelicans are getting a tremendously team-friendly contract.

Rather than chance free agency, Alvarado is locking into the longest-possible deal at a relatively cheap salary. That’s understandable. A guaranteed $3.4 million is a lot of money. A 6-foot guard who (contrary to his reply to Russell) doesn’t reliably shoot, the 23-year-old Alvarado can’t assume he’ll earn a larger fortune in the NBA.

But Alvarado has driven to score and pass well enough to stay on the court, where his pesky defines really shines. He’s already rotation-level player on a probable postseason team. Adding to Alvarado’s leverage: New Orleans needed to get him from a two-way contract to a standard contract for him to be postseason-eligible.

Yet, the Pelicans secure Alvarado long-term at or near a minimum salary. If he continues to produce, they’ll keep him on this relatively low-paying deal. If he doesn’t, they can waive him with minimal cost. It’s high-upside, low-downside for New Orleans.