Comp Picks Explained

by Eric Eager|April 1, 2024

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The NFL offseason is in full swing, with the first wave of free agency largely over. Teams had more salary cap space than they expected and spent a lot of money as a result on non-premium positions like guard, linebacker, and running back, along with non-star players at positions like edge and wide receiver.  

I don’t think this was necessarily irrational, as many of us splurge when we have an unexpected windfall, and sometimes that splurging serves to patch up things that have been neglected for some time. So, when Carolina gave two big contracts to guards to protect their young quarterback, it wasn’t that offensive to me. What was offensive to me was the amount of time people were talking about compensatory picks when it came to the internal calculations they were having regarding players. 

NFL Free Agency Proverbs | SumerSports 

Compensatory picks, which have been given to teams in their current form since 1994 (the beginning of this type of free agency, the salary cap, and the seven-round draft as we know it), are a set of draft picks given out to teams commensurate to the number of net compensatory free agents (CFA) lost during the previous offseason. As of recently, comp picks can now be used in trades, which increases their value as assets in the NFL offseason. 

When Kansas City traded L’Jarius Sneed to the Titans, many Chiefs fans wondered aloud why the team simply didn’t play out the last year of his deal and get a comp pick in 2026, which surely would have been a third rounder, in their minds.  

 

Similarly, last week when the Eagles traded star edge player Haasan Reddick to the Jets for a conditional third-round pick, industry-leading news breaker Adam Schefter fell prey to comp pick cope in his explanation for how much the Jets surrendered for the veteran the Eagles were likely going to release relatively soon: 

This led your favorite writer to respond in kind: 

The problem with basically any rationalizing that gives comp picks back to a team that is seemingly getting less than the best of it in a trade or a free agent move is that it requires a great deal from the team over the next 12 months that is not understood by the average fan or even media personalities/analysts.  

So, let’s start with the basics. Firstly, a CFA must both: 

  • Be an unrestricted free agent (which excludes players who are cut or restricted free agents who are not given a tender) who signed with a new team prior to 4:00pm ET on the Monday following the NFL draft the prior free agency period 
  • Be ranked within the top 35% of all league players in terms of adjusted average salary per year, playing time, and other performance indicators laid out by the National Football League during the year they sign their contract 

Teams that lose more CFAs to other teams than they themselves acquire are the only teams that are even eligible to receive comp picks. And those comp picks are awarded a year after losing players in free agency, which generally subtracts a round from their value (although this is in dispute, and for good reason). Thus, for the argument Chiefs fans were making vis a vis Sneed or the one Schefter was making about Bryce Huff and the Jets to make any sense, Kansas City and New York would have to avoid making free agent acquisitions during certain time periods that would offset the losses of Sneed (hypothetical) and Huff to even be eligible to receive a pick.  

And then there’s the issue of the value of the comp pick(s) a team receives if they are in the black in the formula, which is determined by the NFL’s management council. OverTheCap’s Nick Korte has done a wonderful job decoding a formula that the NFL would rather have hidden, even to the point where they NFL had to make a correction to the 2024 comp picks due to an apparent error.

A summary of the way in which CFAs are valued can be found here. The gist is that players are assigned a round, with the backend of the third round being the highest pick possible, based on the adjusted APY (after taking workout bonuses, escalators, etc.), playing time, experience, and other awards. For example, this year Kirk Cousins, projected to be the Falcons starting quarterback and possible NFC Pro Bowler with an APY of $45 million, will be valued at a third-round pick for the Vikings. K.J. Osborn, who signed a one-year, $4-million deal with the Patriots, will be valued as a seventh-round pick.  

These values are then matched up in a one-for-one pairing based on value until all CFAs gained are gone, after which the values CFAs lost determine the comp picks the team receives. For example, here is what OverTheCap has for the Kansas City Chiefs as of March 31st, 2024: 

Marquise Brown and Nick Allegretti’s deals cancel each other out, while Tommy Townsend and Willie Gay Jr. have them at +2, as Mike Edwards’ contract with the Bills is not projected to reach the top 35% of the league. The Chiefs would thus be in line to have two seventh-round comp picks.  

Now, there are more situations to consider here, as the NFL only doles out 32 total comp picks each year, and no team can have more than four comp picks that originate from player losses in an offseason. If there are fewer than 32 opportunities for comp picks to be rewarded, the teams with the lowest draft positions are given supplemental picks. Lastly, when a team loses a minority head coach or executive, they are rewarded with third-round comp picks, and these comp picks come after the third-round comp picks earned for losing players (which start at pick 97). These comp picks go above and beyond the 32 total comp picks league wide and four comp picks per team. This was how the San Francisco 49ers were allowed to have seven comp picks in the 2023, as they’ve developed numerous candidates who have gone on to head coaching or general manager positions through their ranks. These picks do not cancel out with CFA additions.  

As you can see, the NFL’s compensatory process is incredibly complicated, borne out of a time when the league wanted to make free agency exist in name only; with compensation incredibly onerous for teams that wanted to acquire other teams’ players. In 1993, for example, the Eagles were awarded the 13th overall pick in the draft as compensation for losing Reggie White – the first marquee free agent – to the Green Bay Packers in free agency, a notion unthinkable today. Comp picks are nowhere near as valuable as the 13th overall pick anymore, but they are nothing to scoff at, either. Be that as it may, the path to earning a comp pick is much, much more than simply letting a player walk. A team must: 

  • Let a player walk 
  • See that player sign a qualifying deal with another team 
  • Sign fewer CFAs than they acquire themselves 
  • Have none of the CFAs they acquire cancel the value of the player they let go 

Additionally, since comp picks are quite literally generating value out of thin air, as opposed to engaging in a zero-sum game, allowing a player to walk only has value if the team engages in the process above. A team does not have to surrender a pick if they are -1 or worse in the comp pick formula.  

We’ve done a lot of work here at Sumer to educate people on several topics that are opaque in the process of team building, which include: 

Hopefully this can be added to the bookmarks as a go-to reference as we navigate the complicated NFL offseason to come.  

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