Knicks re-sign Jose Alvarado to new three-year deal, source confirms
Knicks guard Jose Alvarado reacts to the crowd after getting the key to the city from Mayor Mamdani during a championship celebration ceremony on the City Hall Plaza on June 18, 2026, in New York City. Credit: Newsday/William Perlman
While the biggest free-agent pieces remain to be settled, the Knicks moved quickly to secure an important rotation piece Friday, coming to terms with Jose Alvarado on a three-year contract.
A league source confirmed that Alvarado declined his $4.5 million player option after pushing back the deadline four days to accommodate the Knicks’ draft day plans. The Brooklyn product agreed to a new contract after making a huge contribution in the NBA Finals as the Knicks beat the Spurs in five games for the title.
The contract is believed to closely mirror the player option as a starting point, possibly shaving a slight amount off the first year. Every dollar counts for the Knicks right now as they attempt to remain under the second apron of the NBA salary cap.
With Alvarado back and Mo Diawara expected to complete a new contract, the Knicks will have 10 players under contract and approximately $14 million of space below the second apron. That’s a level to which Madison Square Garden chairman James Dolan publicly stated he will not allow the payroll to rise despite the prospect of losing key rotation pieces Mitchell Robinson and/or Landry Shamet.
Alvarado joined the Knicks at the trade deadline and became a regular contributor, rising in Game 4 of the Finals to help spark the comeback from a 29-point deficit.
After that game, Jalen Brunson said, “I think he did a great job of coming in and changing the game. I’ve always said this, the work ethic that these guys have in this locker room allows them to be prepared whenever their number’s called, and the way he came in and changed the game and did the things that he did was great. And we needed literally everything. Him just being himself propelled us to a win.”
After going undrafted out of Georgia Tech, Alvarado has found a home with the Knicks and enjoyed being a part of it in his hometown. Most important, he provided Brunson a complementary piece in the backcourt with his ability to handle the ball and initiate the offense, as well as his fearless play on both ends of the floor.
“I’m not going to sugarcoat this: I was about to cry,” he said after that Game 4 comeback. “ . . . But I’m at Madison Square Garden, end of the fourth quarter, playing with these guys, and we’re playing for something special.”
Notes & quotes: The Knicks have signed St. John’s guard Oziyah Sellers to a summer league deal.
Steve Popper covers the Knicks for Newsday. He has spent nearly three decades covering the Knicks and the NBA, along with just about every sports team in the New York metropolitan area.
