As far back as March, Penguins GM Jim Rutherford had openly identified the re-signing of Justin Schultz as the team's primary off-season priority. On the first day of free agency, consider it mission accomplished with Schultz and the Pens agreeing to a three year contract at a $5.5 million cap hit per year.
At first glance, the term stands out the most. We had penciled Schultz in at $5.25 million, so the cap hit is right in the neighborhood. Only securing his services for three years though sticks out.
This puts Schultz with the Pens through 2019-20 season and takes care of his age 27-29 seasons. That's all well and good, but in summer 2020 he'll be turning 30 and seemingly about to cash in again.
In an ideal world, the Pens could have bought more years, however the cost of that buy surely would have been a lot more than the $5.5 million cap hit that he has now. That's simply leverage and the market value.
Leverage in that prior to this deal, Schultz could have elected for arbitration and got a one-year award and been a UFA in 2018. Given that he finished 7th among defensemen in points, a potential decision there might not have been too far under $5.5 million and only given Pittsburgh one more season.
The market value piece is easy to see. The Capitals gave Dmitri Orlov (one year younger than Schultz) $5.1 million for six years. That's a lesser player, statistically speaking, getting a big chunk of change. The Rangers signed Kevin Shattenkirk (one year older than Schultz) today for four years and $6.65 million dollars, and that's believed to not even be the richest offer out there. Keith Yandle signed last summer for seven years at a $6.35 million cap hit.
So, all signs pointed to Schultz getting a $6+ million offer for next summer if he hit the market. Accordingly, buying out two years of UFA for $5.5 million starts to come into focus as reasonable, and also why the player and his agent weren't looking to sign 4+ years at this cap hit.
In the end, thanks to Schultz's leverage this is a great deal for him, but at the same time the Penguins will have all the rest of his career while he's in his 20's and presumably at the highest level of play. Both sides ought to be celebrating tonight and throughout the weekend.