Million Dollar Question: Projecting Kris Letang’s Next Contract

The Pittsburgh Penguins power skating, minutes eating, decorated defenseman Kris Letang has finished in the top 10 of Norris Trophy voting in two of the last three years, four of the last seven, and powered the Penguins defense to become one of the highest-scoring blue lines in the NHL last season.

He is also something akin to a lightning rod for Penguins fans. He is one of the most popular Penguins and one of the most criticized. Of course, anyone not named Sidney Crosby is the reason the Penguins don’t annually hoist the Stanley Cup and is subject to criticism.

Letang will turn 35-years-old near the end of the 2021-22 regular season in April, and his next contract will be a 35+ deal that is not the danger it once was, but the Penguins will not be able to front-load the contract with money or add extra years to bring the AAV down. This will be a straight-up square deal for a player still at the top of his game.

Last season, Letang scored 45 points (7-38-45) in 55 games, as he missed only one full game. The season before, he popped 44 points (15-29-44) in 61 games.

Former Penguins GM Jim Rutherford once called him “the straw that stirs the drink.”

Now, new Penguins Director of Hockey Operations Alec Schall and GM Ron Hextall have a tricky negotiation ahead which could make or break the Penguins salary cap, or let one of the team pillars bounce via trade or free agency.

Letang signed an eight-year deal with a $7.25 million AAV what seems like a lifetime ago when he was 26. The Penguins had won just one Stanley Cup in the Crosby era, and Letang learned to play in the playoffs after early struggles. However, the Penguins were amidst a string of playoff failures under head coach Dan Bylsma.

At the time, the $7.25 million was another hometown discount by a Penguins star to stick around and win more Cups. That eventually came to fruition in 2016 and 2017, and Letang posted a Norris-worthy season in 2017 before suffering a severe neck injury.

What is Kris Letang Worth?

Comparables?

Most other defensemen in Letang’s category signed long-term deals in their late 20s. Oddly, three of them are San Jose Sharks, Brent Burns, Erik Karlsson, and Marc-Edouard Vlasic.

Karlsson and Drew Doughty broke the bank around 29-years-old for more than $11 million AAV. Burns, John Carlson, and Alex Pietrangelo carry cap hits at or above $8 million. It seems Letang really let the Pittsburgh Penguins off the hook when he signed his eight-year deal.

Most of the top defensemen have contracts that take them to 37 or 38-years-old, but none are on new deals signed at 35-years-old. 

Are the guaranteed salaries of the NHL’s top d-men when they are in their late 30s comparables for Letang to get paid now?

Maybe? One comparable on the low end of Letang’s class is Jeff Petry, 33, whose new four-year deal with the Montreal Canadiens holds a $6.25 million AAV.

Petry has never finished in the top 10 of Norris voting, though last season, he posted 42 points (12-30-42) in 55 games. So, we’ll set Letang’s market-value floor at $6.25 million.

Heck, if Alex Goligoski, 36, is worth $5 million for a one-year deal, the cost for all righties with anything left is high.

If the Penguins use current salaries as a guide, the defensemen in Letang’s class will make about $8-9 million in their late 30s, which is the expected ceiling.

Expected Range: $6.25-$9 million

But the Pittsburgh Penguins Discount?

In 2016, I asked Ben Lovejoy on the eve of his impending free agency if he would take a hometown discount to stay with the Penguins. He smiled and said, “I plan to have a contract to play hockey next year.”

In other words, Lovejoy was going to get paid. Side note, I have never asked that question of anyone again.

What we don’t know, and what Letang has no reason to admit publicly, is how much of a discount he will give the Penguins. Sidney Crosby, Evgeni Malkin, and Letang took healthy discounts to keep the team in Stanley Cup shape. Now that Stanley Cup hopes are fading and careers are short will Letang, and Malkin, ask for their full market value?

The contract term is going to play a significant factor in the annual salary. Term is also a factor because Letang will be one of those players the team will have to take his skates away.

We can see Malkin becoming frustrated with declining skills and calling it a day, but we don’t see Letang stepping away until he gets the tap. The Pittsburgh Penguins defenseman will be the player who rings every drop from the rag and, even then, may not walk away. That’s far from an insult. Would you leave something that you love and which defines you?

Based on market values and comparables, three years and $23.5 million ($7.5 million AAV) would be a proper contract. If Letang wants a longer contract, the AAV should come down. A four-year deal and $26 million ($6.5 million AAV) would be fair. If Letang retires, the Penguins are not on the hook for the remainder of the deal.

On the high end, perhaps Letang forces the Penguins hand if he wants above $7.5 million AAV. He could and should get $8 million if he chooses, but the Penguins’ already restrictive salary cap would be contorted.

Or, on the lowest end, he could take another team-friendly deal in hopes the cap space will allow the Penguins one more shot.