Crosby to sign 12 year – $104.4 million deal on Sunday

Pittsburgh Penguins star center Sidney Crosby will sign the richest contract in Penguins history, agreeing to a 12 year – $104.4 million. Pending league approval, the deal will be officially signed on Sunday afternoon and it is the second richest deal in NHL history.

Crosby’s new deal will carry the same annual cap hit of $8.7 million that his current contract does. Crosby’s new contract begins in 2013-2014 and Crosby, 24, will be under contract through the 2024-2025 season. He will be 37 years old at the end of his deal in 2025. The deal is expected to be heavily front loaded in the first 8 to 9 years.

With much less money in the final couple years, this will likely be viewed by many NHL pundits as a 9-10 year deal with Crosby expected to receive close to $100 million in the first 10 years of the deal.

What does this deal mean for Free Agency?

With the Penguins fully committed to chasing Zach Parise and Ryan Suter on July 1, it was very important for the Penguins to get Crosby’s deal finalized and make it known to attractive free agents that he’s here for the long haul.

The biggest storyline is the Penguins being able to keep Crosby’s cap hit at $8.7 million and the fact that they might not have the same luxury next summer with Evgeni Malkin and Kris Letang as expectations are owners will strongly push for a max limit on the term of contracts in the 6 to 7 year range in the new CBA. Pittsburgh’s ability to extend Crosby’s contract so long is all about the cap hit like other teams have done in the past.

If that becomes the case, talks are going to become much more difficult with Evgeni Malkin and Pittsburgh would struggle to keep Kris Letang’s cap hit under $7 million as Letang currently making $3.5 million per season will command upwards of $6.5 million per season on a six to seven year deal if the owners get their way on a max term. Letang and Malkin each have two years remaining on their deals and Pittsburgh can open up contract talks next summer.

Notes: The NHL announced today that the upper limit of the salary cap is $70.2 million and the lower limit is $54.2 million. That of course is a temporary salary cap as there’s not a new CBA in place at this time. Under the summer cap, Pittsburgh currently has around $14.6 million in cap space.