The two sides have agreed to an eight-year, $76 million contract that carries an annual average value of $9.5 million against the salary cap, beginning in the 2014-15 season. The deal will conclude after 2021-22. Malkin was entering the final year of a five-year, $43.5 million contract that carried an annual average value of $8.7 million per season.
He is now the highest paid player on the Penguins' roster in terms of average annual salary.
General manager Ray Shero made it clear during his end-of-season press conference on Wednesday morning that extending the contract of Malkin was a top priority. In addition, reports from Rob Rossi of the Pittsburgh Tribune-Review indicated that Pittsburgh's ownership group instructed Shero to re-sign Malkin at any cost.
This move will allow the Penguins to deal with their pending unrestricted free agents, which include Matt Cooke and Pascal Dupuis. With Malkin under contract, Shero has a better understanding of what the team's budget looks like. Of course, the team still has to deal with the expiring contract of defenseman Kris Letang. Letang is entering the final year of his contract and will be an unrestricted free agent next summer.
Shero has consistently stated that he hoped to retain both Letang and Malkin. He has partially accomplished that goal.