From the Washington Post/Capitals Insider (Tarik El-Bashir):

AOL Fanhouse has posted a quote from KHL President Alexander Medvedev’s who says Sergei Fedorov is not joining the Kontinental Hockey League because he will resign with Washington today. Such a report is premature according to Captials officials, though, who said the team is still in negotiations with Fedorov, that an agreement has not yet been reached and an there is no expected announcement.

Fedorov has said repeatedly that he’d like to return to Washington and general manager George McPhee has said they’re working to bring him back if the numbers are right. McPhee has permission to spend up to the salary cap this year, but the question becomes will they have enough money for Fedorov after Brooks Laich’s and Shaone Morrisonn’s arbitration hearings?

Habster:
Sergei Fedorov seemed re-juvenated in a Capitals jersey (13 points in 18 games and 5 points in 7 playoff games) with some decent chemistry with Alex Ovechkin and Alexander Semin. It wouldn’t surprise me at all if Fedorov took a fair pay cut to remain with the Capitals to continue his strong play.