SPECULATION: What’s Reasonable Karlsson to Penguins Trade?

What might a San Jose Sharks trade of Erik Karlsson to the Pittsburgh Penguins look like?

According to Elliotte Friedman, it looks like the Penguins or the Carolina Hurricanes will land the reigning Norris Trophy winner.

REPORT: Karlsson ‘Likely’ To Get Traded to Pens or Canes

But that’s about all we know on a potential deal.

It appears that all the teams have done a good job of keeping potential returns and how much the Sharks are willing to retain on the 33-year-old defender’s $11.5 million AAV in each of the next four years private.

So I’m going to play GM, along with Dan Kingerski of Pittsburgh Hockey Now. Naturally, I’ll represent the San Jose Sharks’ interests, while Kingerski will represent the Pens.

For what it’s worth, I vetted this proposal with an NHL scout from outside the San Jose and Pittsburgh organizations, and he opined, “That seems like a reasonable trade for both sides.”

“It’s a good proposal,” echoed an NHL executive not involved with either organization.

What do you think? Keep in mind, this is just pure speculation, not a report.

To Pittsburgh Penguins:

Erik Karlsson
Sharks retain $4.5 million per season for the remaining four years of Karlsson’s contract (39 percent)

To San Jose Sharks:

Jeff Petry
Penguins’ 2024 first-round pick (top-5 protected)
Ty Smith
Sam Poulin
Penguins’ 2025 second-round pick (will upgrade to first-round pick if the Pittsburgh wins either the 2024 or 2025 Stanley Cup, and Karlsson plays at least half of the playoff games in the championship-winning run)

In terms of the salary cap, the major components are Karlsson (Pens responsible for $7 million of Karlsson’s $11.5 million AAV), San Jose retaining $4.5 million AAV, and Petry ($6.25 million AAV for the next two years). Youngsters Smith and Poulin both have negligible salary cap impacts right now.

So for the 2023-24 and 2024-25 seasons, San Jose will essentially replace Karlsson’s $11.5 million AAV with $10.75 million AAV for Petry and what they’re retaining on Karlsson.

For the Pens, currently about $2.3 million over the $83.5 million cap, per Puckpedia, with 13 forwards, seven defensemen, and three goalies, they should be able to get themselves under the cap after this proposed trade by dealing back-up goalie Casey DeSmith ($1.8 million AAV) and perhaps starting the season with 12 forwards, six defensemen, and two goalies.

That’s assuming no other moves from them and keeping salary cap dump candidate Mikael Granlund.

Moreover from a Pittsburgh perspective, Kyle Dubas finally gets his hands on Karlsson, who he coveted last season, going back to his time with the Toronto Maple Leafs.

“Any time there’s a player of that caliber that becomes available,” Dubas said of Karlsson on Jul. 1, “It’s probably realistic to think that we’ll be involved, see if there’s a way to add him to our group.”

REPORT: Teams Want Sharks To Retain More of Karlsson’s Contract?

The Pens are taking a big chance on a 33-year-old with an extensive injury history, but we also saw last season, when Karlsson became the first defenseman since Brian Leetch in 1991-92 to score over 100 points, what he can be when he’s healthy.

Karlsson certainly fits in Pittsburgh’s “win now” mandate, built around 30-something stars Sidney Crosby, Evgeni Malkin, and Kris Letang.

Karlsson, as long as he can stay healthy, certainly makes the Penguins a lot better today than they were yesterday.

From a San Jose perspective, GM Mike Grier has come out and said that the Sharks aren’t retaining 50 percent, the max allowed, on Karlsson’s contract.

“At some point, there’ll probably have to be a little bit of give on our side,” Grier said before the Draft. “We’re not just going to, people think we’re gonna eat 50 percent of his contract, it’s probably not going to happen.”

Grier Talks Karlsson Trade, No. 4 Pick, Jumbo’s Future

Per Friedman, the Sharks were only willing to retain about 20 percent of Karlsson’s remaining contract last season, when the Edmonton Oilers were interested during the Trade Deadline.

That’s about $2.3 million off Karlsson’s $11.5 AAV. Factoring in Grier’s public admission that the Sharks will probably have to retain more than they want, plus the precedent of San Jose retaining 34 percent of Brent Burns’s remaining contract in last summer’s trade with the Canes, led me to the rough figure of 39 percent as the line for San Jose.

Granted, 34 percent of Burns’s $8 AAV million in each of the next three years is just $2.72 million retained, a lot less than $4.5 million, but tight as the cap is for every team in the league, I’d be surprised if the Sharks escape with retaining less than $3 million a season if they want a serviceable package back.

As for declining 35-year-old right-hander Petry, the San Jose Sharks can offer him plenty of playing time on both the power play and penalty kill. Once a legitimate No. 2 defenseman, if Petry can find at least a facsimile of his prime in San Jose, he could be a Trade Deadline asset in the last year of his contract, the 2024-25 campaign.

I’m seeing the 2024 first-rounder with limited protections as essentially the price that the Pens will have to pay to rid themselves of Petry.

As for the rest of the return for the Sharks, my comp is last summer’s Burns trade to Carolina.

Compared to Karlsson this summer, Burns was 37 and coming off a solid but unspectacular season – but on the other hand, he was the picture of durability, last missing a game in 2013. Also, Burns had three years, not four, left on his contract, and for a smaller amount than Karlsson, making him a lesser risk than his former teammate.

Also, both Burns and Karlsson had strong trade protections, another limiting factor in their trade values – Burns had a three-team trade list and had to be asked to waive to go to the Hurricanes, while Karlsson has a full No-Movement Clause.

In the end, Carolina sent solid fourth-liner Steven Lorentz, goalie prospect Eetu Makineimi, and a 2023 third-round pick to San Jose for Burns.

I see Smith, Poulin, and the 2025 conditional second as a souped-up version of the Canes’ package.

Both Smith and Poulin are former first-rounders who have struggled to establish themselves in the NHL.

But 2018 first-round pick Smith, 23, was seventh in Calder Trophy voting in 2020-21, and has demonstrated an ability to run an NHL power play. That’s a skill that the Sharks will sorely need if they trade Karlsson.

He spent most of this past season in the AHL, but in San Jose, Smith might immediately become the Sharks’ top offensive defenseman. You would hope that kind of opportunity brings out his rookie year promise.

Meanwhile, 2019 first-round pick Poulin, 22, is big and has soft hands. It hasn’t translated so far into much pro production, but maybe it will in 2023-24, the last year of his ELC.

“Poulin doesn’t really have a spot on the [Penguins] roster for two years,” Kingerski projected.

Smith and Poulin, obviously, aren’t perfect comps for Lorentz and Makiniemi, but they’ve got more upside, and Smith fills a glaring need on the San Jose blueline. If the Sharks want a more surefire NHL’er than Poulin, perhaps RFA Drew O’Connor would fit the bill as a substitute.

Meanwhile, the conditional 2025 second-rounder, with an outside chance of becoming a first, obviously an upgrade on a 2023 third, is a concession to both Karlsson’s spectacular campaign and also additional value for taking on Petry’s contract.

“That becomes a heck of an offer,” Kingerski said. “I think [it’s] sensible.”

I know there will be many San Jose Sharks fans unhappy with what feels like perhaps a light return for a reigning Norris Trophy winner.

The Sharks certainly aren’t a better team on the ice, at least in the upcoming season, after this proposed trade.

But keep in mind that Karlsson wants to leave. In the cases of Burns and Ryan Merkley, Grier has been quick to move players who don’t want to be with the Sharks.

Here’s another word of caution from the exec.

“Remember that Karlsson hold all the cards with his NMC,” he said. “Wherever he chooses to go, that team doesn’t have to give up much.”

Again, that’s what we saw with Burns.

Finally, it’s worth noting that there appear to be just two teams in this derby despite Karlsson’s exploits.

That tells you all that you need to know about this salary cap world that we live in.