As Craig Custance reported earlier today, the San Jose Sharks and Devin Setoguchi are looking to sign a one-year deal for the upcoming season.

While compensation wasn't discussed in the article, the case was made earlier this offseason by Fear The Fin that David Perron's two-year $2.15MM per deal with the St. Louis Blues could be a comparable that San Jose would use during negotiations.

Here's the relevant excerpt from Craig Custance from The Sporting News, as he explains what both San Jose and Setoguchi are looking for in late July in regards to their contract negotiations:

Both sides are optimistic it could happen in the next week. In just his second year in the NHL, Setoguchi scored 31 goals. Last season, he had 20 goals in 70 games, along with five goals in the playoffs.

"A kid like him doesn't mind rolling the dice on a short-term deal," agent Paul Krepelka told Sporting News. "I'm optimistic we'll get something done."

The Sharks have shown a preference to signing young players to short-term deals as they work closer to unrestricted free agency. It doesn't look like Setoguchi will be any different.

>> Craig Custance of The Sporting News

While Custance mentions that the Sharks have shown a preference to signing players to short-term deals, that always hasn't been the case. Joe Pavelski (two-years) and Ryane Clowe (one year) remain the most recent impact RFA's Doug Wilson has signed, but Matt Carle (four years) and Milan Michalek (six years) received much lengthier contracts before hitting unrestricted free agency.

My guess is that Wilson doesn't want to risk rolling the dice on a lengthy Setoguchi contract considering his up and down 09-10 season, especially since Setoguchi would be asking for more money in the event he signs for multiple years. This one year deal could get him down below three million dollars when you consider Joe Pavelski received a two-year $1.67MM deal after a forty point 07-08 campaign at the age of 23, the same age of Setoguchi currently.

So what does this mean for San Jose? I would have preferred to lock up Setoguchi on a multi-year deal considering his skill set and potential, with the hope being that the contract would age well with time. $3.2MM for three years would be an ideal situation for San Jose, allowing them to pencil in their best goal-scoring youngster during the period where Doug Wilson feels the window of opportunity to win a Stanley Cup will be for the organization.

A one year deal for Setoguchi both removes and adds the risk of retaining his services next season. If he regresses from last year's twenty goal totals, San Jose would not be saddled with a $3.2MM 3-year proposed commitment, allowing the organization more flexibility to either find a replacement or sign the talented Setoguchi to a much cheaper contract.

However, if he is slotted on to the first line with Joe Thornton and returns to 08-09 form that saw him log 31 goals and 34 assists, it would be hard to justify asking Setoguchi to sign for anything less than the $3.625MM Ryane Clowe is currently making. Furthermore, Setoguchi will have four NHL seasons under his belt next offseason, meaning that the option of electing to head to arbitration will be available to him. If that is indeed the route Setoguchi or the team heads in, and the Sharks do not wish to adhere to the arbitrator's proposed salary (i.e. decide that the price the arbitrator decided on is too much and allow The Gooch to walk), Setoguchi would become an unrestricted free agent and San Jose would not receive compensatory draft picks after he signs with another team. While this is pure speculation, I would put a handsome sum of money on arbitration being the route Setoguchi takes, especially if he has a big year.

Whatever the situation will be next offseason, it's definitely a positive to know that the Sharks and Setoguchi are getting close to completing negotiations. He's a talented young player who will be a huge part of San Jose's success during 2010-2011, and one that will hopefully be in teal for a long time afterwards as well.

Go Ed Hardy White Sunglasses Sharks.

The initial Fanshot of this news can be found here.