Monday, April 23, 2012

Making Sense of Compensatory Picks

"For everything you have missed, you have gained something else; and for everything you gain, you lose something else"

Ralph Waldo Emerson

As we learned in our last lesson, the NFL Draft was created so that each team had an equal chance to add quality players.  Before the draft, the teams with the deepest pockets were able to sign the best players, making for a decidedly uneven playing field.  The draft system has endured over the years as a delicate balance of parity (with the worst teams from the previous year getting the first picks) and the free market system (as teams are able to make deals among themselves to move around in the draft order).

Wanting to ensure that parity prevails, however, the NFL in 1994 introduced the mysterious concept of “compensatory picks,” which many people notice on draft day scrolling by at the bottom of the TV screen, but have no idea what they are.  

In short, these extra picks are intended to compensate those teams who have experienced a net loss in the value of their personnel.  How does this happen?  They lose players that are more highly valued compared with the players they gained during free agency.  More on this below...

Each year, a total of 32 compensatory draft picks are distributed, with no one team receiving more than four.  Oh, and compensatory picks can not be traded.  The compensatory picks are selected during Rounds 3 through 7.  Not all teams get these additional draft picks—this they were allocated to a total of 15 teams. 

Also, there is a good chance that not all compensatory picks will be distributed; those that are not are given out to the clubs that would have the earliest selections if there were an additional round at the end of the final round of the draft.  As such, these so-called “supplemental compensatory selections” are picked after the seventh round of the draft. This year, 30 of the 32 compensatory picks were distributed.  The last two were awarded to Indianapolis and St. Louis, which will make their compensatory selections after the end of the seventh round. 

So, how does the NFL determine which teams get these extra draft picks, how many each team gets, and when they use them?  Glad you asked.  Compensatory picks are awarded at the NFL’s annual meeting in late March.  The League takes a look at each team and which players they lost—and gained—during free agency.  Pertinent information for each player is run through a formula, developed by the NFL Management Council*, to determine whether he should be considered a “compensatory free agent.”  The result of those calculations also determines in what round the compensatory pick may be chosen.

The formula used to make this determination for each player includes salary, playing time and postseason honors with his new club.  Let’s take the Minnesota Vikings as an illustration.  In 2011, they lost four players to free agency:  Tavaris Jackson, Sidney Rice, Ray Edwards and Ben Leber; and they signed two new players, Remi Ayodele and Charlie Johnson.  Below are the relevant stats for each of these six players in 2011:

Minnesota Players Lost

 Tavaris Jackson (quarterback, lost to Seattle Seahawks, pictured below):  2-year, $8 million contract ($3.25 million total with bonuses in 2011); 3,091 yards, 14 TDs, 13 INTs, 79.2 Passer Rating

"I'm worth more than a tackle that got released! Woo hoo!"
 Sidney Rice (wide receiver, also lost to Seattle):  5-year, $43 million contract ($4 million total in 2011); 32 receptions for 484 yards and 2 TDs (only played 9 games)
 Ray Edwards (defensive end, lost to Atlanta Falcons):  5-year, $30 million contract ($2.7 million total in 2011); 24 tackles, 3.5 sacks, 2 recovered fumbles
 Ben Leber:  linebacker, currently not with any team
Minnesota Players Signed:
 Remi Ayodele  (defensive tackle):  released by Vikings in March; paid $1.75 million in 2011
 Charlie Johnson  (offensive tackle):  paid $2 million total in 2011 (no relevant performance stats)

So, just by looking at the raw data, you can see that the Vikings suffered a net loss of personnel value in 2011’s free agency period.  Three of the players they lost received multi-year contracts for respectable sums from their new teams.  On the other side of the coin, they released one of the players they signed and the other got a decent salary, but no real quantifiable statistics.  By crunching the numbers, the NFL determined that Minnesota was eligible for two compensatory draft picks, both of which they will select in the fourth round.

Now let’s contrast Minnesota’s situation with San Diego.  The Chargers lost Darren Sproles and Kevin Burnett to free agency and gained Takeo Spikes and Travis LaBoy.  Here are the stats for these players:

SD Players Lost:

Darren Sproles (running back, lost to New Orleans Saints):  4-year, $14 million contract ($3.5 million for 2011); set regular season record for all-purpose yards (i.e., rushing, receiving and special teams) with 2,696 (a 168.5 yards per game average)

 Kevin Burnett (linebacker, lost to Miami Dolphins):  4-year, $21 million contract; 84 tackles, 2.5 sacks, one interception and one TD

SD Players Signed:

Takeo Spikes (linebacker):  3-year, $9 million contract ($2.25 million total for 2011); 64 tackles, one sack and one TD

 Travis LaBoy (defensive tackle):  2-year, $2.9 million contract ($1.2 million total for 2011); 30 tackles, one sack

With the exception of LaBoy, each of these players had decent season and earned respectable salaries.  Running these numbers through its formula, the NFL determined that the Chargers should have one compensatory pick, which it will use in the seventh round (250th overall).

Here are a few factoids about this year’s compensatory picks:  

 This year’s big winners with four compensatory picks each are Cleveland, Green Bay and the New York Jets. 

 Since the compensatory draft system began in 1994, the Baltimore Ravens have received 33, the most in the league (they have two this year).

 Houston has only received four in the same span, and Cleveland is actually near the bottom with only six (including the four it received this year).

The Ravens draft table stays busy thanks to their compensatory picks

Oh, and the most famous compensatory pick ever?  Experts would have to agree that it would be future Hall of Fame quarterback Tom Brady.  Brady was selected by the Patriots in the sixth round of the 2000 draft—that’s pick #199 overall.  Quite a steal!

*The NFL’s Management Council is the most powerful NFL committee, as it plays a key role in labor relations, particularly in negotiating the collective bargaining agreement.  The chairman of the Management Council is New York Giants owner John Mara.

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