Three Ways to Fix Compensatory Picks

[dt_divider style=”thick” /]Philosophers say that “the road to hell is paved with good intentions.” So it is with compensatory picks. The idea was well-meaning: to give something to a team that lost a player. But the notion has become corrupted. The compensatory system does not reward teams that lost players; it rewards those who game the system. The comp pick formula is broken.

Revis and the Patriots

Don’t believe me? Let’s go back a few offseasons and look at the NFL’s smartest and most hated team, the New England Patriots. The Denver Broncos beat them in the January 2014 AFC Championship game, then added insult to injury by inking Patriots star cornerback Aqib Talib to a six-year, $57 MM contract. The Patriots didn’t panic, however. The Tampa Bay Buccaneers, with a new coaching staff and a new Tampa 2 defensive scheme less reliant on cornerback talent, decided their own superstar corner Darrelle Revis was expendable. The Patriots snatched him up. And at the end of the 2014 season, the Patriots received a third-round compensatory pick for losing Talib. Because Tampa Bay had cut Revis, he did not factor into the compensation formula.

But there’s more. Revis signed what was initally reported to be a one-year, $12 MM deal – and it was … sort of. The Patriots held a $20 MM option for a second year of Revis, an astronomical figure for for a cornerback. So after he helped them to a Super Bowl victory over the Seattle Seahawks, New England declined the option, making Revis a free agent. When the corner returned to the New York Jets, where his career had begun, on a five-year, $70 MM deal, the Patriots again received a third-round compensatory pick. The Patriots declined the option but didn’t cut Revis, so he still factored into the formula.

How It’s Supposed to Work

Here’s the language on the NFL’s memorandum announcing 2018 compensatory picks (bolding mine):

Under the rules for compensatory draft selections, a team losing more or better compensatory free agents (“CFA”) than it acquires in the previous year is eligible to receive compensatory draft picks. The compensatory picks will be positioned within the third through seventh rounds based on the value of the compensatory free agents lost.

OK, this makes sense so far. Teams lose a free agent, as the Patriots lost Talib, they’re eligible for a compensatory pick. But they have to lose “more or better free agents.” Why didn’t signing Revis cancel out the Talib comp pick? The devil is in the details here – it’s not just “free agents,” it’s “compensatory free agents.” The memo continues (again, bolding mine):

Compensatory free agents are determined by a formula based on salary, playing time and postseason honors. The formula was developed by the NFL Management Council. Not every free agent lost or signed by a club is covered by this formula. No club may receive more than four compensatory picks in any one year. If a club qualifies for more than four compensatory picks after offsetting each CFA lost by each CFA gained of an equal or higher value, the four highest remaining selections will be awarded to the club.

Not every free agent is covered. Revis in 2013 wasn’t covered, because he was cut by Tampa Bay before his contract elapsed. Revis in 2014 was covered, because technically he wasn’t cut – the Patriots merely declined his option. The Patriots exploited loopholes here to get two compensatory picks, arguably neither of which they deserved.

Fix #1: Free Agents Are Free Agents (for the Signing Team, Anyway)

It makes sense that Revis doesn’t count into the comp formula for Tampa Bay. They had him under contract and could have retained him, but they chose to cut him. That seems fair – they shouldn’t get anything for him, because they decided he wasn’t worth this contract.

But it’s not clear why Revis shouldn’t count in the formula for the Patriots; once Revis hit the market, he was a free agent like any other. The comp pick formula does appear to exclude players signed after the unrestricted free agency period, and perhaps the NFL doesn’t want to worry about players being cut late and signed later in the league calendar, but that certainly wasn’t the case here; the ink was dry on the Revis deal only two days after Talib signed with Denver. Perhaps the league (or the player’s union) worries teams will hold on to players they intend to cut for weeks or months just so they don’t factor into the compensatory formula for the new team? That seems really petty, and usually there are other factors (like roster bonuses coming due) that drive earlier decisions.

The Los Angeles Rams exploited this loophole this offseason, signing Ndamukong Suh to a one-year, $14MM deal in late March. Because Suh was cut by the Miami Dolphins, he won’t factor into the compensatory formula. The Rams have managed to add Suh, wideout Brandin Cooks, star cornerback Marcus Peters, and (coincidentally) Talib – and none of them will count towards the comp formula, as Suh was a cut and Cooks, Peters, and Talib were added via trade. The analysts at project the Rams to net the biggest 2018 comp pick haul of any team: four total picks, including two third-rounders.

The rule change is obvious to me: for the team that lost the player, DON’T count the player if they were cut. But for the team that did sign the player, DO factor him into the compensatory formula. It’s just common sense.

Fix #2: Declining Options Is the Same As Cutting

In a league where the bulk of contracts are not guaranteed, there really is very little difference between cutting a player and declining an option. The Patriots could have signed Revis to a two-year, $32 MM (divided into $10 MM signing bonus, $2 MM first-year salary, $20 MM second-year salary) and it would have functioned exactly the same as the contract they did sign, with the $20 MM option for the second year. In a sense, every all non-guaranteed money is optional from a team’s standpoint. What difference does it make?

And the NFL understands this, too, which is why they allow teams to spread the cap hit from signing bonuses into option years. That’s right – the Patriots had Revis under contract in 2014 with a cap hit of only $7 MM, because the league let them split his $10 MM signing bonus over two seasons. This is incongruous. Either treat the option like the player is under contract – and don’t award a comp pick when his option is declined – or treat the option like the player’s contract is expiring and don’t let the team spread the bonus cap hit into the option year. Why is the NFL letting teams have their cake and eat it, too?

Fix #3: Get Rid of Comp Picks Altogether

The compensatory system has failed. An NBC Sports article by Michael David Smith a year ago showed that the big comp pick winners were not the teams that need help, but the most successful teams:

The list of teams that have received the most compensatory picks since 1994 is pretty similar to the list of the best teams in football since 1994: The Ravens have received the most compensatory picks, and they’ve won two Super Bowls. The Packers have received the second-most, and they’ve also won two Super Bowls. The Patriots are fourth, and they’ve won five Super Bowls. The 10 teams that have had the most compensatory picks have won most of the Super Bowls since 1994, with a total of 14 titles for those 10 teams.

This makes sense. Teams with a lot of good players can’t keep them all under the cap, so they lose free agents to bad teams, who have the cap space because they don’t have many good players to re-sign. Even without the loopholes above, successful teams would naturally see more comp picks.

The league already has the salary cap to ensure parity. The compensatory system, if anything, undermines that parity. Teams with a lot of good players can’t sign them all, so they leave and join teams that do have the cap space for them. That’s a desired effect. So why are we giving a sop to the teams that lost the player? I’m reminded of parents giving their three-year a small present on the six-year-old’s birthday just so he doesn’t whine. But there’s no need for it then and there’s no need for it here.

You may find that extreme, and at the end of the day compensatory picks – at best, late third-rounders, fringe top-100 picks – aren’t moving the needle a ton. But that’s no reason to keep them, and it’s definitely not a reason to avoid fixing the problems with the compensatory system. Why have another formula that savvy teams like the Patriots can exploit, as they did both when they signed Revis and when they let him go? The compensatory system is broken; let’s fix it, and, while we’re at it, let’s ask whether we need it at all.

Follow @davearchie on Twitter. Check out his other work here, like his analysis of where fumbles come from, his analysis of value plays at left tackle and a look at the emergence of Chargers TE Hunter Henry.

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