It’s a Wednesday in June. The Pittsburgh Penguins have been out of the playoffs for almost two weeks. The Stanley Cup final is still going on.
Shouldn’t seem like today would be a very pivotal day for the makeup of the future of the roster, but it is, as Pierre Lebrun of ESPN pointed out.
From ESPN.com: BOSTON -- Pittsburgh Penguins GM Ray Shero and agent Kent Hughes, who reps star blue-liner Kris Letang, are slated to meet here in Boston on Wednesday, a source told ESPN.com. It only makes sense because Hughes lives in Boston and Shero is in town for the NHL's general managers meeting.
We’ve heard a lot of speculation from Pittsburgh media, Letang wants a eight year contract. He wants to double his salary. He wants $8 million a year. He wants a no movement clause. And on and on.
But we haven’t heard anything meaningful from the sources that matter- Letang, his agent or Pens GM Ray Shero. The sides have felt each other out, with Shero stating after Evgeni Malkin agreed to terms that Malkin and Sidney Crosby would be the only players to receive the no movement clause (as in player can’t be placed on waivers or traded without their permission). Letang may be offered a partial no-trade clause but don’t look for him to get a no movement clause after Shero’s declaration.
Now we’ll see what results of this meeting. Many are expecting that Letang could be this summer’s Jordan Staal. The scenarios align very closely. Both players were key components of the Penguins, both were one year away from unrestricted free agency. Shero offered Staal a ten year contract, Staal declined and was quickly shipped out to Carolina in exchange for Brandon Sutter, prospect Brian Dumoulin and a #8 pick that became defenseman prospect Derrick Pouliot.
The NHL draft this year is on June 30th, and signs point to Letang being dealt by then if the Pens can’t figure out a way to fit his contract demands into their salary structure.
If Letang is traded, one important thing to remember is Pittsburgh basically only had three “top four” type defensemen in 2013. Paul Martin and Brooks Orpik formed a steady shutdown pair and Letang played with a myriad of partners- Mark Eaton, Matt Niskanen, Simon Despres among others, as the Pens unsuccessfully tried to fill those minutes. So if Letang is traded, the Pens probably need at least one “bridge” type top four defenseman until Dumoulin and other prospects like Pouliot, Scott Harrington and Olli Maatta are ready to play in the NHL.
For Letang in this situation, it’s easy to see how he could maximize his earnings. 39 year old Sergei Gonchar recently agreed to a two year, $10 million ($5 per) deal in Dallas and 35 year old Mark Streit will join Philadelphia to the tune of four years (!!) and $21 million ($5.5 million cap hit). Letang is much younger and exponentially better player over the course of the next few years, the market for him would likely be a very, very lucrative one.
As Mike Colligan put in his excellent Kris Letang series (Part 1 here and Part 2 here):
When Letang was asked the other day what kind of money he’d be looking for in his contract extension, he said, “there is no number.” He wasn’t being a jerk. He’s right. There’s no precedent for the type of deal he’s looking to get. Over the next few years, player contracts will reach shocking levels as the salary cap rises and the front-loaded cap games disappear. Six players in the NHL will make $10 million or more next season, but imagining a player with a $10 million cap hit seems outrageous.
That's scary but true, there are no comparables. If you take Erik Karlsson getting $6.5 million per from Ottawa, remember that those encompass several years of RFA, same with Drew Doughty getting $7.0 million from the Kings.
Shea Weber at $7.8 million (a deal designed as a RFA poison pill from Philly) has the highest defenseman cap hit with recent UFA Ryan Suter ($7.5 million cap hit) a close second. Suter's deal is from the last CBA, enabling them to spread the cap hit over a few of the last years of that contract.
Letang's in a different boat than all of those players, as potentially the first "in his prime" type UFA defenseman.
The Penguins have the benefit of having flexibility. They only have three players signed past 2014-15, they are Crosby ($8.7 million cap hit), Malkin ($9.5 hit starting in 2014-15) and James Neal ($5 million through 2017-18). But there is the matter of keeping or replacing literally the whole rest of the roster to keep the team in realistic Cup contention and that won’t be easy. Now it’s up to Shero to see if he can incorporate Letang into the long-term mix, or if a trade is needed to bring back some value.
So what's the breakaway point? Only Shero and assistant GM Jason Boterill probably know. But just as a fan with a capgeek calculator and knowledge of the salary cap it gets really difficult to think of paying a third piece $8+ million. The Pens are built around Crosby and Malkin, already dedicating more to those two players than any other team does. Is keeping a third, expensive piller worth it? Can they keep a talented, successful team if they do?
On the surface it might be a routine summer day, but depending on how the meetings go the course of the Penguins future could be altered for a long time to come.