Compensatory Picks Can Now Be Traded: What Impact Could That Have?

Compensatory picks are one of the mysteries of the NFL where most know little about them (and thus spurring my effort to demystify the process). But the one aspect that average NFL fans have known about compensatory picks for years is that they can’t be traded.

That basic rule, however, appears to have been discarded, as reported via Adam Schefter this morning.

It’s unclear at this time why the NFL decided to now allow compensatory picks to be traded.  The simplest answer may be to encourage more trading while the draft is underway. The event has become a ratings grabber for television, with much glitz added to the infrastructure, so increasing the potential for excitement via increased trades may be in play.

But I’ve also been thinking about some of the ramifications of allowing trades:

  • Does this new allowance only apply to during the draft itself? Or can teams trade compensatory picks as soon as they are awarded? Having at least an extra month to trade those picks is clearly advantageous to those who have them.
  • Should the official release of compensatory picks happen earlier? While compensatory picks can now be traded, you still can’t trade them if you don’t even know that you have them. The NFL has always released the official list at the league’s annual meetings in late March. My guess is that they’ve done this just for the convenience of handing out the release at a location where all NFL executives are located.

    However, the final results of the compensatory picks can be determined well before then. The moment would come when all adjustments for playing time and postseason honors are finalized. By the letter of the CBA, that would happen the instant the Super Bowl MVP is named on the first Sunday of February.  However, since the odds of the Super Bowl MVP being a player that’s implicated in the compensatory picks are infinitesimally small, and because postseason honors in general are a very small weight in the compensatory formula, in practice we’ll know the results after the end of the regular season in the first week of January.

    Still, pushing the official release to early February would be quite appreciated for general managers.  This is because they would have the entirety of the free agency and trade period to use those picks if they choose, and that’s important since the grand majority of free agency action takes place in the first few days. It will be interesting to see if GMs that focus on accumulating compensatory picks will make this argument in the future.

  • Will this major change make other major changes to the compensatory pick system more realistic? I’ll talk about this in more detail on or after I release my final projection in January, but I expect 2016’s compensatory picks to be quite unusual in several regards.  In a nutshell, I see three unusual aspects:
    1. More and more teams are working the system to gain the maximum number of four compensatory picks per year.
    2. As a result, there will be very few–if any–7th round compensatory picks awarded in 2016.
    3. One team (New England) cleverly worked their contracts so that they could decline team options on players instead of cutting them, thus making them UFAs eligible for the compensatory formula in their favor.

    I would be curious to see if any executives or owners pick up on these efforts when the official 2016 release comes out, and whether that will turn into desire to make it harder for teams to game the system to the extent that a small handful of teams are collecting the grand majority of compensatory picks.