Sharks and Karlsson Could Consider Mutual Contract Termination

A surprising and intriguing idea concerning NHL defenseman Erik Karlsson has emerged, according to Sheng Peng of NBC Sports. An implausible idea on the surface, speculation has emerged that the San Jose Sharks and the defenseman might look toward the idea of a mutual contract termination, assuming a trade doesn’t materialize in the next couple of weeks.

Peng delves into the possibility in a recent article, suggesting it’s one option to move the dynamic defenseman to a team that has visions of winning a Stanley Cup this season. While a handful of interested teams have looked at the Norris Trrophy-winner, a trade hasn’t yet materialized sending Karlsson elsewhere, mainly because of his massive contract and limited salary cap space to fit him in. A mutual contract termination removes a big part of that concern, at least when it comes to the pieces involved in a potential trade.

Karlsson’s current contract extends for four more years, with an annual average value (AAV) of $11.5 million. Eager to contend for the championship, he aims to depart from San Jose. However, accommodating his significant cap hit within the confines of the $83.5 million salary cap, coupled with the fact the Sharks don’t want to retain a big chunk of his deal or get nothing in return for the player, a deal poses a challenge for interested teams. If Karlsson and the Sharks agree to terminate his contract, it would allow him to explore unrestricted free agency and select his next destination.

Peng admits, while the idea initially sounds audacious, it’s not entirely dismissed by industry insiders. Peng consulted two player agents and long-time front office executive Mike Santos, both of whom acknowledged the remote feasibility of such a move. All called it unlikely but also admitted there are reasons not to completely rule it out.

This Idea Comes With Hurdles That Might Be Too Big to Jump

The challenges to terminating Karlsson’s contract are many. Perhaps too many.

First, Karlsson’s potential earnings in the open market would likely fall short of the remaining $46 million on his current deal. But, because he’s already been paid a good portion of his contract in signing bonuses, he would really only need to sign for around $39 million to make himself whole. That would be $9.75 million per season for four years.

Second, the Sharks would have to be alright with getting nothing for the player except a free pass when it comes to monies owed to him. They’d be off the hook for his contract, but there’s also been talk they’re still asking for a considerable return in any deal. If they believe he’s still their biggest trade chip or that they can acquire picks in return on a deal, why would you just let him walk away?

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Finally, agent No. 1 said that he didn’t think Karlsson’s agent, Craig Oster, or the NHLPA would look favorably on this type of precedent. It would be one thing if Karlsson wasn’t making very much. But, if a player walks away from a significant contract in favor of free agency, it could send the wrong message and open a can of worms.

The reality is, a contract termination likely isn’t happening. But, if every other avenue is explored and nothing is cooking on the trade front, could this be the last card to play?

Next: Sharks Take Criticism While Misreading Trade Market for Karlsson