Pittsburgh Penguins general manager Ray Shero quickly addressed several of the team's offseason questions on Thursday by finalizing contract extensions with head coach Dan Bylsma and superstar Evgeni Malkin. Shero is reportedly already planning out his next round of negotiations, too, as he's expected to begin discussions with defenseman Kris Letang's agent sometime in the next 10 days, according to Renaud Lavoie of RDS.
Shero has yet to speak with Letang's agent Kent Hughes, according to Lavoie, adding that the two sides have yet to exchange their desired terms. It's believed, though, that Letang is looking to earn $7 million annually on a deal that spans five-to-eight years in length.
If a contract extension isn't agreed upon, Letang would begin next season on the final year of a four-year, $14 million contract that carries an annual average value of $3.5 million against the salary cap. The defenseman would be an unrestricted free agent next summer.
Despite speculation that Pittsburgh would not be able to retain both Malkin and Letang, Shero has remained steadfast in his desire to make that happen. With Malkin's contract complete, Shero has a better understanding of what his salary cap allotment will look like heading into the future -- though that's relative in terms of the long-term contracts he has on the books.
Pittsburgh currently has $34.1 million allocated to six players for the 2014-15 season, which would be the first year of Letang's deal. If the defenseman is given the $7 million annual salary he is seeking, that number inflates to $41 million for seven players.
The salary cap is still unknown for the 2014-15 season, but it's dropping to $64.3 million for next year.The cap is expected to increase in subsequent seasons after that, but the amount it goes up is an unknown variable.
The cap issues make it difficult to precisely determine what $41 million in commitments will leave Shero to work with to build the rest of his team but, in a general sense, it's a hefty figure to tie into so few players. Whether that means the team will look to use a compliance buyout remains to be seen, but they have two -- which can be used this summer or next.
Shero could conceivably just gauge negotiations with Letang in order to determine if a deal can be made as Letang doesn't have any kind of no-trade protection in his contract and the manager wouldn't have any trouble finding a team interested in a top-tier defenseman. Shero utilized this strategy at last year's NHL Draft when he dealt Jordan Staal to the Carolina Hurricanes after the two sides failed to agree on an extension and it wouldn't be surprising to see him use a similar method in the event a deal can't be made with Letang.
Shero seems to handle his business in a calculated manner so with seven unrestricted free agents currently under the team's control until July 5 (including Pascal Dupuis and Matt Cooke), one would imagine the general manager figures out the Letang situation soon so he's able to work on other negotiations prior to the start of free agency.