Longtime readers won't be surprised where I stand on Neil Walker and Pedro Alvarez, and it's a question Joshua Choudhury also recently addressed, but since Walker and Alvarez seem to be this week's topics du jour, here's my take. What I'd do if I were general manager, and what I'm guessing the Pirates will do, is keep Walker next season but either trade or non-tender Pedro.
It's likely that Walker will sign elsewhere following the 2016 season, and I don't think an extension would be a good idea unless the Pirates received a significant discount. Unless the Bucs can get a truckload for him in a trade, though, there shouldn't be much controversy about whether he should be back next year. Walker should make around $12 million, and that's a very reasonable rate to pay a consistently good player. And if Walker plays well next season, the Pirates could extend a qualifying offer for 2017 and land an extra draft pick if he leaves. Walker's health and his defense are sometimes questionable, but neither to such a great degree that the thought of non-tendering him should enter the Bucs' minds.
A trade is, of course, a possibility -- since Walker is so close to free agency eligibility, the Pirates might feel they want to get something for him before he goes. Given that Walker is an everyday player and the Bucs figure to be competitive, though, I'd be surprised if they went this route. A trade would make sense if the Pirates were a 70-win team, or if the player in question were, say, a reliever or someone more fungible. I wouldn't be opposed to the Bucs trading Mark Melancon this offseason, for example. But Walker is a crucial part of what makes the Pirates' offense go.
Alvarez is a different story. He has offensive value, but right now, there's no way for the Pirates to realize it, because he gives it all back in the field. Via FanGraphs, Alvarez was exactly replacement level last year, and he's 0.3 wins above replacement level this year. FanGraphs estimates that he's been worth $2.6 million combined in those two years, but if the Pirates tender him, he'll get about $7 million or $8 million next season, far more than he's worth to them.
I write "to them" because Alvarez would have more value for another team. Offensively, Alvarez is a strikeout machine and he's frustrating to watch most days, but that doesn't mean he's bad. From FanGraphs again, Alvarez's offense has been worth 8.4 runs above average this season. That's strong, and if Alvarez were still a competent defensive third baseman, there wouldn't be so much speculation about his future right now. His defense, however, has been worth 19.9 runs below average this season (a number that probably seems about right if you've watched him play).
For an AL team, of course, Alvarez could play defense sparingly, or not at all. He's hit .245/.315/.469 this season while playing half his games in a pitcher's park; the average AL DH has hit .266/.335/.437. So Alvarez profiles as something like a league-average DH, or maybe something slightly less than that when accounting for the possibility of decline.
So, from the perspective of an AL club, would Alvarez be worth trading for? Maybe. One problem for potential trade partner is that "league-average DH" is an abstract concept. In real life, most AL teams don't have regular DHs, and most guys who do DH regularly (David Ortiz, Alex Rodriguez, Kendrys Morales, and so on) are better hitters than Alvarez is. Teams who don't use regular DHs divvy up time at the position to create favorable matchups and get extra rest for their veterans. If you're an AL team and you acquire Alvarez, you're either sacrificing some of that flexibility, or you'll be sacrificing some of Alvarez's offensive value by having him play in the field. Also, many AL teams who have struggled at the DH position this year (like the Tigers, Athletics and Astros) did so because of disappointing performances by players who seem likely to return.
If the Pirates were to trade Alvarez, my guess on his likely destination would be Baltimore. The Orioles gave 337 plate appearances at DH to journeyman Jimmy Paredes this year, and they'll have plenty of roster flexibility with Chris Davis and Steve Pearce potentially departing. They might also figure Alvarez's lefty power will play well in their ballpark, just as they did with Travis Snider. Tampa, where lefty DH John Jaso will be a free agent this year, could be another possibility, although it's hard to see the Rays eagerly taking on Alvarez's salary.
It might be, then, that Alvarez's salary will make him tough to move. Potential trade partners could hold out, knowing that they can get Alvarez fairly cheaply if the Pirates non-tender him. Hopefully the Bucs can get something for him, but either way, I don't think he'll be back next season.
That raises the obvious question of what the Pirates should do at first base. Many fans' ideal answer would be Byung-Ho Park, but Jung-Ho Kang's success has probably helped move Park out of the Pirates' price range, and a long-term deal for Park would block Josh Bell. Bell, meanwhile, will hopefully man the position in the long term, but the Pirates probably won't want to promote him until June. Until then, they'll have Mike Morse under contract, but Morse is better suited to the part-time role he has now.
If Kang is healthy to start the season, though, one possibility would be to use Kang at third, Jordy Mercer at shortstop and Josh Harrison at second against lefties but also against some righties, and have Walker soak up some at-bats at first. They would also have Alen Hanson around, but he would likely start the season in the minors, just like Bell. As a hedge against Kang's health, the Pirates could also plan to acquire a spare infielder this offseason, even though the market won't exactly be overflowing with options. Juan Uribe, Kelly Johnson or maybe even a buy-low type like Emilio Bonifacio might make sense. Such an arrangement wouldn't be glamorous. (Well, maybe signing Uribe sort of would be.) But it would allow the Pirates to spend most of their money this offseason on starting pitching, where they'll have a need and where there's lots of talent available.
Walker came through the minors as a catcher and as a third baseman, then learned second on the fly in the big leagues. He isn't a good defender there now, but he's still an athletic, adaptable player who shouldn't have much trouble occasionally playing first. Of course, we've heard before how easy it is for a ballplayer to transition to first base, and that turned out not to be true in Alvarez's case. But Alvarez's current problem isn't first base per se, it's that he isn't playable at any position. Walker is different -- his range isn't good for a second baseman, but he's dependable, and he's moved around the diamond without much trouble in the past. And if the move did go badly, second base would still be available to Walker, and Bell would be one call away.