Grier, Dubas Detail How Karlsson Trade Came Together

Kyle Dubas finally got his man.

On Sunday, the new Pittsburgh Penguins GM snagged reigning Norris Trophy winner Erik Karlsson from the San Jose Sharks, in a three-team trade that also included the Montreal Canadiens and featured 12 moving pieces.

Dubas had been chasing Karlsson for a while, back to when he was GM of the Toronto Maple Leafs last season.

“It was a fairly lengthy process with San Jose. That goes back to my previous place of employment,” Dubas said yesterday.

On Jun. 1, after getting let go by the Leafs, Dubas was named President of Hockey Operations in Pittsburgh. A month later, he was answering questions about Karlsson on the opening day of free agency, when it was widely reported that the Sharks and the Pens were close to a deal.

“That wasn’t accurate,” San Jose Sharks GM Mike Grier countered on Sunday.

“I would say we pushed hardest in the last week to try to make it all work and happen. On July 1st, I know it was more of a public thing on July 1st than it had been,” Dubas detailed. “But I actually think that was more like the opening rounds of the championship fight per se, where it was feeling each other out. And then, we kind of got into the later stages here this week.”

“We weren’t close at the Draft to doing anything,” Grier said.

San Jose and Pittsburgh weren’t close, at least in part, because of the challenges of moving Karlsson’s contract. While the blueliner had just authored a season for the ages, he also was 33, had four years at $11.5 million AAV left on his contract, and had been inconsistent, both in terms of health and performance, in his four previous seasons.

Grier, drawing a comparison to trading fellow superstar defenseman Brent Burns last summer, noted, “The one kind of similarity in both [Karlsson and Burns trades] is that there was a limited marketplace for both players.

“Teams that are competing for the Stanley Cup in this flat cap world that we’re kind of stuck in right now, the reality of teams not having a lot of money, there just wasn’t a huge market for either player. We’re talking about two All-Star type players and Norris Trophy winners.”

In the end, it appeared that only the Penguins and Carolina Hurricanes were seriously in the hunt.

“When it came down to it, it was probably down to two teams that were really more aggressive and trying to land the player,” Grier said.

Another reason why there wasn’t a lot of serious interest in Karlsson? Besides the questions about the veteran’s expense and long-term outlook as a player, the Sharks were steadfast in retaining as little of Karlsson’s contract as possible, well short of the maximum allowed 50 percent.

“We wanted to get it as low as possible, obviously,” Grier admitted. “Throughout the process, there was a lot of teams asking us to retain a lot of salary, and we weren’t, it was something we really didn’t want to do.”

We can assume the Pens were one of the teams that asked for more cap relief. After the first day of free agency, Pittsburgh was over the cap and had two large underperforming contracts on the books, in forward Mikael Granlund, two years left at $5 million AAV, and defenseman Jeff Petry, two years left at $6.25 million AAV. That was money that the Pens more or less had to shed to fit Karlsson in.

Of course, it could have been as simple as swapping Petry and Granlund and premium sweeteners like a first-round pick for Karlsson and some retention from the Sharks. The money ($11.25 vs. 11.5 million AAV), basically, works.

But Petry, as reported by The Athletic, had a 15-team no-trade list in his contract, which included the San Jose Sharks.

Granlund, however, had no such protections, which made him a strong candidate to be sent to San Jose.

There also was an actual deadline, not just a self-imposed one, to make a Karlsson trade work.

Last month, young Steel City winger Drew O’Connor filed for arbitration. That triggered the opening of a second buyout window for the Penguins, after the league-wide window in mid-June.

Once Pittsburgh and O’Connor settled on a contract, whether before arbitration or the Aug. 4 arbitration hearing, that would initiate a 48-hour buyout window.

Essentially, this was a last chance for Dubas, failing a trade, to clear some significant cap space before the beginning of the season.

The Penguins had until Friday afternoon to Sunday afternoon to waive a player making over $4 million AAV, for the purposes of a buyout.

And Granlund, the more attractive trade candidate compared to Petry and his 15-team no-trade, was also the prettier buyout candidate.

Basically, the Pens would’ve wiped out almost 75 percent of Granlund’s cap hit over the next two years with a buyout, versus just 40 percent of Petry’s.

So while Dubas has been vocal in his disdain for buyouts, Pittsburgh’s need for cap space with or without Karlsson and the amount of savings from a Granlund buyout forced his hand.

The Penguins were going to buy out Granlund if they couldn’t conclude a Karlsson trade.

“[It] made Sunday at noon the deadline, because that’s when we would have had to put somebody on unconditional waivers for a buyout,” Dubas acknowledged.

For the Sharks, a Karlsson trade without Granlund coming back was certainly conceivable, but it would’ve been a far less enticing proposition.

Without helping the Pens absorb Granlund’s contract, they certainly weren’t getting a first-round pick just for Karlsson, especially for the amount that they were willing to retain, which ended up being just 13 percent or $1.5 million AAV, of the future Hall of Famer’s remaining deal.

“We wanted to be able to have some cap flexibility and financial flexibility to add players down the road. That fit what we wanted to do. We didn’t really want to go down that path of retaining a lot of money,” Grier said, of clearing the San Jose Sharks’ books from 2025-26 and on.

The Sharks, it’s fair to say, wanted a lot for retaining a little of Karlsson’s contract.

“In this particular trade, we targeted that first-round pick,” Grier stressed. “Having the possibility of having two firsts in this draft and having four picks in the first two rounds is something that we were looking to do and really appealing to us.”

Without Granlund – let’s say he got bought out – and with Petry off the table for the Sharks, there would’ve been no reason for Dubas to send Grier a first-round pick. Once again, Karlsson, as a $10 million AAV player, had essentially zero trade value.

Granlund’s buyout window ended up being a blessing in disguise, at least to get the trade levers turning again.

“It sort of placed a deadline on it,” Dubas said, “which I think was a positive thing for us, really.”

But what about Jeff?

Pittsburgh and San Jose needed a third team, not on Petry’s no-trade list, to take on the 35-year-old defender’s contract.

“Montreal and [GM] Kent Hughes came in at the end,” Dubas said.

This was a struggle too.

“There were several teams involved at the end. That was the Jeff component and moving Jeff on,” Dubas revealed. “There were a few teams, they all had different priorities at this time and where they were at.

“The part we had difficulty with was [the trade] happened after free agency, so the cap being flat, there was very limited cap space for teams — you’re trying to figure out all the machinations and the salary components that are going to work.”

There was some thought that Petry wouldn’t want to go back to the Canadiens, who he left last summer, but according to Dubas, Montreal wasn’t on his no-trade list.

In the end, Dubas got Karlsson by surrendering only a single first-round value asset, which appeared to be a clear goal of his.

He retained 25 percent of Petry’s remaining contract and added goaltender Casey DeSmith and a 2025 second-round pick to the bargain, and in exchange, the Habs sent Mike Hoffman to the Sharks and Rem Pitlick to the Pens.

Without retention, Petry was thought to need a first or a top prospect attached to move.

“For us, adding someone like [Karlsson] to the group as we attempt to give it every chance to win, but also keep our eye towards the future [was our goal],” Dubas said. “We were happy not to include any of our prospects, Owen Pickering, Brayden Yager in the trade.”

Pickering and Yager were Pittsburgh’s first-round picks in 2022 and 2023, respectively, and both are highly-regarded.

Instead, Pittsburgh sent another veteran, defenseman Jan Rutta, $2.75 million AAV for two more years, to the Sharks.

San Jose is likely to flip veterans Granlund, Rutta, and Hoffman, for perhaps mid-round picks, in the next year or two.

Finally, Dubas had his man.

“The reason why we wanted to bring Erik in, when going through our team, one of the things that I felt in talking to [head coach Mike Sullivan], we needed to continually improve our ability to move the puck from our own zone. Erik, I think is one of the elite players in that regard in the NHL, even though he’s in his early 30’s,” Dubas gushed. “He continues to be one of the top skaters in the NHL, and obviously, his production and offense is quite prolific. He’s a very competitive, very motivated person who wants to come here and help our team.”

It was a grind, but everybody, San Jose, Pittsburgh, and Montreal appeared to get what they want.

Grier got a premium asset and cap flexibility sooner than later.

Hughes got an NHL-caliber goalie and a high pick.

And Dubas got a potential game-changing superstar, along with cap compliance.

“Kyle was aggressive but was really willing to make some concessions on his end to make this whole thing work,” Grier said. “I think both sides made concessions on not only the retention number, but the package in general to get the deal done.”