Karlsson traded to Penguins, ending uneven era with San Jose Sharks

Erik Karlsson's name had been in NHL trade rumors for months ahead of Sunday's trade

Erik Karlsson’s time with the San Jose Sharks – a sometimes electrifying but all-too-often disappointing five-year period in which the team made only one playoff appearance – came to an end Sunday as the three-time Norris Trophy winner was traded to the Pittsburgh Penguins.

Completing one of the biggest trades of his brief tenure as Sharks general manager, Mike Grier sent Karlsson, forward Dillon Hamaliuk, and San Jose’s 2026 third-round NHL draft selection to the Penguins for Pittsburgh’s 2024 first-round NHL draft selection, forward Mikael Granlund, forward Mike Hoffman, and defenseman Jan Rutta.

San Jose will also retain $1.5 million on Karlsson’s contract annually for the next four seasons (approximately 13.04%). If Pittsburgh’s selection in 2024 is in the top 10, Pittsburgh can elect to transfer this pick to its 2025 first-round selection.

A third team, Montreal, was involved, as Hoffman went from the Canadiens to the Sharks. In the deal, the Canadiens acquired Pittsburgh’s 2025 second-round draft pick, defenseman Jeff Petry, goaltender Casey DeSmith and forward Nathan Legare. The Penguins are retaining 25 percent of Petry’s $6.25 million annual salary cap hit.

The trade ends months of speculation as to where Karlsson might play next season.

“While it is always difficult to trade a player of the caliber of Erik Karlsson, this trade accomplishes several goals for our franchise,” Grier said in a statement. “It adds two forwards to our roster who have proven ability to produce offensively at the NHL level and solidifies our NHL defense corps. Additionally, acquiring another first-round pick gives us the opportunity to continue fortifying our development system with high-end prospects and provides us some financial flexibility to add players as we see fit in the future.

“We want to thank Erik for his contributions in San Jose over the last four years and congratulate him on a remarkable and historic 2022-23 season. We wish Erik, his wife Melinda, Harlow, and Stellan all the best in the future.”

Granlund, 31, had 41 points in 79 games last season as he played 58 games for Nashville and 21 for Pittsburgh after he was acquired by the Penguins at the trade deadline. He had two years remaining on a four-year, $20 million deal he signed with Nashville in 2021, as his contract carries a $5 million AAV.

Hoffman, 33, had 34 points in 67 games with the Canadiens last season and is entering the final year of a three-year, $13.5 million deal that carries an AAV of $4.5 million. This is actually the second time Hoffman has been on the Sharks’ roster. In June 2018, the Sharks acquired the forward from Ottawa in a multi-player trade, then, shortly afterward, sent him to Florida for three draft picks.

Rutta, 32, had nine points in 56 games for Pittsburgh last season. He has two years left on a deal that carries a cap hit of $2.75 million per season.

The Sharks, per CapFriendly, now have just under $4 million in cap space for next season. But the true benefit to the Sharks was freeing up an additional $10 million in cap space for the following three seasons, giving Grier more flexibility to reshape the roster as he sees fit.

Since coming to the Sharks close to five years ago, Karlsson had 243 points in 293 regular season games. But after missing the playoffs each of the last four seasons with the sputtering Sharks, which included a dismal 22-44-16 record this past year, Karlsson, 33, sought to play for a Stanley Cup contender once again.

“I could go through 82 games a year and be good,” Karlsson said on June 25, the day before he won his third Norris Trophy, “but I want to play when it matters.”

Grier wanted to accommodate Karlsson’s trade request but also needed a return somewhat commensurate with the player’s value, with the Sharks prizing assets that fit long-term. Since Karlsson entered the NHL in 2009, no defenseman has scored more points (761) and only three more have averaged more ice time per game (25:29).

This past year, in one of the most prolific individual seasons ever for a Sharks player, Karlsson had 25 goals and 76 assists as he became the first NHL defenseman in 31 years to score more than 100 points.

Still, trading Karlsson and his cap hit for each of the next four seasons figured to be difficult.

The NHL’s salary cap is increasing by only $1 million to $83.5 million for the upcoming season and Grier made it clear last month that the Sharks were only willing to retain so much of Karlsson’s contract – certainly less than the 50 percent maximum allowed by the collective bargaining agreement. But even at a reduced cap hit, only a handful of contending teams had the space needed to absorb Karlsson’s contract.

“It’s definitely tough to move out salary and we understand that. At some point, they’ll probably have to be a little bit of give on our side,” Grier said on June 27. “But if people think we’re going to eat 50% of (Karlsson’s) contract and all this type of stuff, it’s probably not going to happen.”

Karlsson’s contract also contained a full no-movement clause, giving him some control in terms of where he would play next.

“I think there’s a lot of teams that want to do it. Not necessarily a lot of teams that can do it,” Karlsson said last month. “I’m not looking to be greedy. I’m not looking to do what’s best for me personally. I want it professionally to be a good situation.”

The Sharks now turn the page on the Karlsson era – one that began with hopes that the dynamic defenseman could help bring the team their first championship.

In a Cup-or-bust blockbuster trade made by former Sharks general manager Doug Wilson on Sept. 13, 2018, Karlsson was acquired from the Ottawa Senators for four players and three draft picks.

Among the haul sent to Ottawa were center Josh Norris, the Sharks’ 2017 first-round selection, and three draft picks, including one that would turn out to be 2020 No. 3 overall pick Tim Stützle, who has 177 points in 210 NHL games for the Senators.

At his best in San Jose, Karlsson was a one-man breakout machine with playmaking skills possessed by few other NHL defensemen. His Sharks teammates often just had to get open before Karlsson, using his elite vision and passing ability, would slide the puck right on their sticks.

“You can’t replace Erik Karlsson. He’s one of a kind, in my opinion,” Sharks captain Logan Couture said in April. “He does things that very few can do from the back end.”

Karlsson had 45 points in 52 regular season games for the Sharks in 2018-19 but injured his groin in January and missed 27 of the team’s final 33 regular-season games. Karlsson then played 19 of 20 playoff games as the Sharks lost in the Western Conference finals to the eventual Cup champion St. Louis Blues.

Karlsson had groin surgery on his 29th birthday on May 31, 2019, and less than three weeks later, was signed by the Sharks to an eight-year, $92 million contract, making him the NHL’s highest-paid defenseman.

The Sharks’ overall fortunes then went downhill. Fast.

Karlsson’s injury woes continued as various ailments forced him to miss 50 of the next 208 regular season games between 2019-2020 and 2021-2022. A lack of depth, caused in part by Karlsson’s contract, and those awarded to Couture, Brent Burns, Marc-Edouard Vlasic, Evander Kane, and Martin Jones, and a mostly flat salary cap, started a tailspin in which the Sharks won just 82 of those 208 games.

Now a new era is underway.

Jones had his contract bought out by the Sharks in July 2021, Kane had his contract terminated in January 2022, and Burns was traded last summer. Of the 28 players that dressed for at least one game in 2018-29, just five remain in Couture, Vlasic, Tomas Hertl, Kevin Labanc, and Radim Simek.

Going one step further, of the 40 players who dressed for at least one Sharks game in 2021-2022, the season before Grier took over, just 11 remain, as the organization continues its makeover from the previous regime.