What is an NFL compensatory draft pick? Explaining the rules and purpose

Unlike the NBA Draft, the NFL Draft doesn’t have a lottery. That means that the first round takes place on reverse order from the season’s standings, with the team with the worst record getting the first pick, and so on.

Sometimes, like in 2024, the worst team doesn’t get the first pick because of a trade. For instance, the Carolina Panthers owed the Chicago Bears their first-round pick, so they had to give up the No. 1 selection.

Nonetheless, trades aren’t the only way a team can get additional ammo for the NFL Draft. With that in mind, we’re going to let you know what are the compensatory draft picks.

NFL Draft: What’s A Compensatory Pick?

Simply put, the league gives teams compensatory picks after they suffer big losses in free agency. That way, they’re able to replenish their roster with talent and keep the competitive balance.

NFL Draft stage

Considering that, compensatory picks are given to teams that lost more star players than it acquires in free agency. The picks are given from the third to the seventh round, depending on the team’s loss.

How Does The NFL Award Compensatory Picks?

The NFL’s Collective Bargaining Agreement details the compensatory pick formula. The system deems unrestricted free agents who are ranked within the top 35% of all league players as ‘compensatory free agents’ or CFAs.

The formula considers the player’s salary, playing time, and awards or individual honors. Then, based on the point value they get and the number of CFAs a team has lost or signed, the league rewards the compensatory picks.

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Of course, that might be confusing at first, and some might feel like the league is rewarding teams for not spending enough money to make sure their team continues to compete, and they might be right. However, it’s one of the few ways to ensure some sort of competitive balance.