Evgeni Malkin contract negotiations: What might it take for Pens to keep him?

This off-season the Pittsburgh Penguins will have many storylines in terms of player personnel decisions, coaching staff decisions and the whole goaltender mess, but one thing that seems clear-cut and likely is getting Evgeni Malkin to ink a new contract.

Rob Rossi from the Trib summed it up:

Negotiations between Shero and Malkin's agent, J.P. Barry, will begin this week — and both parties are interested in working on a deal in short order. Malkin is set to enter the final year of his current contract. He can sign an extension July 5, but after that date control of the situation favors Malkin's representatives.

There have been whispers kicking up of Malkin potentially getting a $15 million offer per year to play in the KHL, which isn't unusual or unexpected that rumors crop up. The last time the Pens in Malkin were in this boar, in summer 2008, these same rumors of Malkin being offered a big payday to return to Russia were making the rounds too. Just like after the lockout when supposedly the Russian government was going to offer the top Russian stars top dollar to stay. It’s usually a lot of bluster and little substance.

What we do know is Malkin has stated many times publicly that he’s comfortable in Pittsburgh, likes playing in the NHL and is interested in remaining a Penguin for years to come. Malkin’s always been very loyal to either Pittsburgh or his hometown team in Metalurg, so it seems very unlikely he would accept a high paying gig in a place like Moscow or St. Petersburg.

The question now becomes what will it take for Malkin to sign in Pittsburgh. Last contract negotiation was relatively easy when Malkin accepted the same exact terms (5 years, $43.5 million total, $8.7 per) that Sidney Crosby had signed the previous year. This time, that will not be possible, as Crosby was allowed and chose to sign a 12 year, $104.4 million contract, with same $8.7 million cap hit). Due to the new collective bargaining agreement, new contracts can max out at eight years, and there are more strict limits in the amount of fluctuation in salary from year to year.

As we mentioned three months ago, paying Malkin $10.6 million per year seems like a fair starting point, based on the actual amount of dollars that Crosby will get compensated in how his contract is structured:

[In the] first nine years. Crosby will receive $95.4 million…an average of $10.6 million per season in his prime earning years when he’ll be in his late 20s/early 30s. Given where Getzlaf ($8.2m) and Perry ($8.625) came in [on their recently signed long-term contracts], a cap figure of around $10.6 million (for the max allowable of eight years) for Malkin seems fair for him and fair for the team too. Malkin would be leaving a little under the maximum deal under the table- $12.86 million is 20% of next year’s salary cap and the highest one player can make- but $10.6 million would be the league’s highest salary cap hit and give Malkin some prestige there.

It’s kind of easy in such a huge negotiation to say that’s “fair”, but we know Pittsburgh ownership has given the mandate to keep Malkin and sign him under terms. As has been widely reported, Crosby and GM Ray Shero discussed the possibility that Malkin’s cap hit may exceed the captain’s, something he understands and is OK with, given the dynamics of the business under the CBA.

A Malkin contract can be announced at any time, but they can’t officially sign it until July 5th. Given Pittsburgh’s willingness to sign him, and Malkin’s public comments of an openness to return, it’s a fair expectation to believe that the two sides can come to an agreement around that time.