As Frank reported here earlier, by way of a Faceoff Factor article, the Pittsburgh Penguins are beginning to talk contract extensions with Sergei Gonchar and Kris Letang. It's a good idea to get this wrapped up early, as it stands now the Penguins only have two defensemen with NHL experience under contract for 2010-2011 (Brooks Orpik and Alex Goligoski).
After the jump let's look at the pros and cons of signing these guys and what it may mean long-term to the salary structure of the organizations.
Regarding Sergei Gonchar the question will be how much and how long. It's been reported that Gonchar may be willing to accept less than the $5 million annually he's averaged in his previous five year contract. Gonchar is now 35 years old, which is a magic age in the bargaining agreement because if he retires in the middle of his contract, the team still has to eat the salary cap hit -- see Pronger, Chris. So with no option to heavily front-load the contract and manipulate the salary cap, Pittsburgh will have to play it straight.
In the past year along Sarge had to deal with the major shoulder injury and surgery as well as suffering a torn MCL in the playoffs. The injuries didn't seem to affect his overall performance too much, but they are piling up. Defensemen can also "hit the wall" in their late 30s and lose their effectiveness very quickly, it'll be important for the Penguins not to over-extend an offer to keep Gonchar and risk having a washed up version of him 3 or 4 years from now. Then again, Nicklas Lidstrom is arguably the game's best defender and he's approaching the big 4-0 himself, so it's not like older guys can't still play at a high level.
It'll be interesting to see how Ray Shero handles this one. I don't think he's going to risk part of what the organization wants to do to re-sign Gonchar at all costs. At the same time, Shero saw how lost and ineffective the team looked without Gonchar last season and how much better they played with their #1 defenseman in the lineup and manning the power-play. Certainly the Pens would welcome Gonchar back for an addition 2-3 seasons, but at what price? That's the question.
For Kris Letang price and term will be the big factors as well. Reports say Letang is looking for a salary in the $4 million a year range. Letang did take strides in improving his goals, assists and points totals, but he's still got a ways to go in rounding out his game to be a surefire Top 4 NHL defenseman. Also, Mike Green -- who had slightly better stats than Letang at the time of his extension -- signed a four year deal worth $5.125 million a year. If I'm the Pens I'm pointing that out and noting that Letang's not going to explode for 31 goals so maybe his salary expectations should be taken down a notch.
In a perfect world, the Pens announce before the regular season begins that they've signed both Gonchar and Letang to extensions. Even though they're at different ends of their career paths, both are important parts of the Pittsburgh defense. I would hope that Gonchar would accept a deal in the $3.5 - $4.0 million range, and if Shero can sign Letang for 4 or 5 years for an average of about the same I think he would have done a tremendous job.
It's probably important to note though that those extensions I speculate on would tie Pittsburgh to approximately $7.5 million for the two players, give or take a little. The current combined cap hit of the two is just $5.835 million, so that's about a $1.5 - $2.5 million increase, depending on the final numbers. With the economics of the NHL, it's not expected the salary cap will rise soon, in fact it will actually go down if the team's revenues shrink as is feared/expected by some observers. So if the Penguins do end up extending both players, that'll likely mean something has to give as far as a veteran leaving.
But don't fret too much, the Pens, by my count, have about $13.6 million coming off the books for expiring contracts. Of course, this includes Top 6 forwards like Bill Guerin and Ruslan Fedotenko, as well as Gonchar and Letang. So get used to seeing Ray Shero use some magic to fill out the roster around his superstar core of players.