The Avalanche may miss the NHL playoffs for a second consecutive season, but the team’s overall improvement from a year ago has earned coach Joe Sacco a new contract.

Sacco and general manager Greg Sherman will return in their respective roles for the 2012-13 season, NHL sources said Wednesday.

Sacco is in the final year of a three-year contract, but he is expected to sign an extension at least through next season once this season is over. Sherman’s contract is not public. Neither the Avs nor Sacco had any official comment Wednesday heading into the game at Vancouver.

With the second-lowest payroll in the NHL ($49.1 million) and the youngest roster in the league (25.7 years old, on average), the Avs believe they are headed in the right direction and want to keep their coaching and management structure in place.

Despite Wednesday’s loss, the Avs already had surpassed by 17 last season’s point total (86-69).

“I really like the job Joe Sacco has done this year, and the entire coaching staff,” said former NHL coach and current TV analyst Pierre McGuire. “I think the franchise is definitely getting back on the upswing.”

Things looked dicey for Sacco midway through the season, with the Avalanche struggling. Although the Avs faltered in the past week, the organization believes they should be better next season. The Avs are expected to sign youngsters such as Matt Duchene, Ryan O’Reilly and Erik Johnson to new contracts in the offseason, though the NHL’s expiring collective bargaining agreement Sept. 15 could complicate matters in terms of signing free agents.

“I think it’s a great thing. I’ve had him my three years as a pro and I’ve learned so much,” O’Reilly said. “I can’t ask more of the opportunity. He’s helped complete myself as a player, and it would be great to work more with him.”