Every March, the NFL awards compensatory picks, or “comp picks.” And every year, as March Madness is about to occur, football junkies start talking about these comp picks.
But most of the general population doesn’t realize how important they really are. The NFL’s comp picks have been important for years. But they’ve become even more important since 2017, when the NFL began allowing teams to trade comp picks, thus allowing them to be treated like any other draft pick. What do you need to know about the NFL’s comp pick process and, in particular, what this means for the 2021 NFL season’s allotment of comp picks?
Comp Pick Breakdown
A total of 32 compensatory picks are awarded to teams based on the players they lost or gained during free agency in the year prior. This allows clubs that have lost free agents to another team to use the draft to attempt to fill the void. The value of compensatory free agents (FAs) gained or lost by each team is calculated by the “proprietary formula” and a club is awarded picks of equal value to its net loss of such FAs, up to four. The picks come at the end of Rounds 3 through 7.
Why does this matter? Wouldn’t it be better to not lose free agents (re-sign everyone you like) and let other teams get these mid to lower-level (outside the top-96) compensatory draft picks which are more of a crapshoot?
Many teams don’t have a proper gauge to measure future performance vs present worth. Players are often awarded contracts based on prior performance, but many teams ignore an important ingredient which is the roster implications of awarding a nice contract to a player who outplayed his prior contract.
A goal of building a complete roster is accumulating a collection of players who synergistically are capable of outperforming what they are being paid. When that combines with great coaching, Super Bowl teams are built.
When a player reaches free agency, it is typically for a reason. The team decided not to extend that player’s deal before it reached its conclusion. Sometimes that isn’t a red flag, but oftentimes, it should be. Even for average players, a bidding war ensues during free agency. The fact that the NFL continues to increase the salary cap only encourages such dueling between front offices.
This further increases the player’s cap hit to the “lucky” team that signs him. And that makes it more unlikely that the player will be capable of outperforming what he is being paid.
As such, this is why so many players signed to multi-year deals in free agency are cut before those deals reach years 3 or 4, and why so many of these players fail to live up to expectations.
Look at the Raiders who just cut three of the top-of-the-market players they signed 2 years ago to 4-year deals:
The expectation that the player, on a new team with different players and coaches, can even live up to the performance he was able to deliver at his peak on a prior team that maximized his ability to deliver (and hence record great statistics which make him a desirable free agent) is low. Expecting this player to meet, let alone surpass that performance to the point that he’s outperforming his new contract is a risky proposition.
Extending great players before their contract ends is smart. But overpaying top players from other teams on day 1 or day 2 of free agency rarely works and typically is unwise. In general, building through free agency using multi-year contracts does not work.
Building through the draft is far more effective. But it is difficult.
Each year, teams are given only 7 draft picks by the NFL, and it is very difficult to consistently excel at evaluating and projecting college athletes. I’m not 100% on the train that drafting all players is completely random. I believe that certain talent evaluators are better at understanding certain position groups. But by and large, it is difficult to consistently hit draft picks.
In a somewhat random game, teams that acquire more draft picks are more likely to walk away with better players.
And this is the point.
Two keys to building great rosters:
Don’t overpay other team’s players in free agency and do try to accumulate more draft picks so you can build a roster which can be paid for under the cap on an annual basis (rather than kicking the can down the road laden with too many expensive veteran players)
The “kill two birds with one stone” mechanism to exploit both keys?
Let expensive players that aren’t critical to your team walk, let other teams overpay them and don’t sign expensive day 1 or day 2 free agents from other teams.
Those principles make sense even if the NFL wasn’t rewarding you for being intelligent.
But you get another bonus.
You also get free picks in the form of comp picks. The NFL awards 32 of them each year.
Let’s examine the teams that have most benefited from comp picks the last 5 years, since the NFL increased the value of these picks by allowing them to be traded:
It’s no surprise that some of the smartest teams over the last decade at understanding how to build winning rosters are at the top of the league in obtaining draft pick value over the last 4 years.
The Patriots, Rams, Ravens and Seahawks are in the top-5 teams in total value obtained via comp picks in the last 5 years.
Those 4 teams all are in the group of 7 teams to win over 65% of games since 2017.
There are more ways to win than just accumulating comp picks. No team in the NFL has won more games since 2017 than the Saints (49) and they earned their first comp pick in 2021.
Note that the above chart is based on draft points, a concept created by Football Perspective to more accurately value the “worth” of a draft pick based on how high that pick is. Picks near the top of the draft have a stronger hit rate, and thus there is not a linear distribution of hit rate through the draft.
2020 Comp Picks Awarded
In 2020, the New England Patriots were the only team to be awarded 4 comp picks. The four teams with the most draft value in comp picks were the Patriots, Eagles, Seahawks, and Ravens, all of which made the 2019 postseason.
Here is a complete look at all the NFL’s 2020 comp picks that were awarded this year:
Comp Pick Value
Another way to understand compensatory picks is to look at average draft pick equivalents. This concept is simple.
The average draft pick is pick 128 of 256, and it has a certain value assigned to it based on draft points (a concept created by the Football Perspective website to more accurately value the “worth” of a draft pick based on how high that pick is in the draft.
By totaling the number of draft points a team acquired over the last 5 years and dividing by the value of pick 128, it is possible to compute the number of “average draft-pick equivalents” a team has gained.
Just by comp picks alone, the Patriots have added almost TEN draft pick equivalents in the last 5 years!
Effectively, by playing the comp pick game, Bill Belichick has acquired:
5 third-round picks
2 fourth-round picks
1 fifth-round pick
3 sixth-round picks
1 seventh-round pick
Those 12 picks equate to 9.9 average draft picks. We’re not talking low-round picks. They’ve acquired basically 10 of pick-128 of 256.
The total draft value that they’ve acquired is 36.5 draft points.
That’s more than a first overall draft pick is worth!
As we know, the draft has a ton of variance. More arrows in the quiver means more shots at hitting and typically translates into more hits.
In the last 5 years, 5 teams haven’t earned the equivalent of ONE average draft-pick.
This means that over the last 5 years, 16% of the NFL hasn’t earned a single average draft pick while Belichick’s Patriots have earned 10!
Here’s a look at the total draft pick equivalents earned by all teams over the last 5 years:
There are many ways to build a strong roster.
We discussed why 2021 might make for an interesting opportunity for savvy GMs to add more free agents on team-friendly 1-year deals than in the past.
But history has shown us that devoting too much of your roster construction on building through free agency is inefficient, particularly when overspending to land big names on 4-year deals.
With comp picks now capable of being traded (new rule in 2017), some of the smartest teams are taking advantage of this rule, acquiring free draft picks by letting players walk in free agency, and building rosters capable of sustained 65% win seasons year after year after year.