A compensatory pick is an extra draft selection awarded to a team that lost more qualifying free agents than it signed the previous offseason. The idea is to soften the blow for teams that develop players and then cannot afford to keep them.
How They Work
| Who qualifies | Teams with a net loss of qualifying free agents |
|---|---|
| Where they land | Appended to the end of rounds three through seven |
| Maximum per team | Four in a single draft |
| Based on | Contract value, playing time and postseason honors of the players involved |
The Formula Is Not Public
The league has never released the full calculation. What is known is that it compares free agents lost against free agents signed, weighting each by a combination of the contract they received, how much they played, and whether they earned honors such as a Pro Bowl selection.
Only certain free agents count. Players cut by their previous team generally do not, which is why a release and a free-agent departure have different consequences for the club losing the player.
The Round Depends on the Player
A team that loses a highly paid starter who plays extensively for his new club can receive a third-round compensatory pick. Losing a rotational player on a modest contract might yield a sixth or seventh.
They Can Be Traded Now
Compensatory picks were untradeable for decades. That changed in 2017, when the league began allowing teams to trade them like any other selection. It made offseason roster decisions more flexible, since a team could factor a likely future compensatory pick into a trade.
Why Teams Plan Around Them
Some front offices deliberately avoid signing outside free agents in order to protect their compensatory position, preferring to let their own players leave, collect picks, and sign replacements after the qualifying window closes.
Related
How picks are determined · Draft order explained · How many rounds
The Bottom Line
Extra picks for teams that lost more in free agency than they signed, awarded at the end of rounds three through seven, capped at four per team, and tradeable since 2017.