Compensatory picks a boon to teams

The press release is distributed at the annual NFL owners meeting with little fanfare.

Usually, the information in the release ends up buried in the notes portion of stories in newspapers and on the Internet throughout the country. It's routine and expected. The headline on the press release is always the same: "NFL Announces 32 Compensatory Draft Choices to xxx Clubs."

Within two weeks, the league will pass out this year's release and it will go relatively unnoticed. In NFL front offices, though, the results printed on those releases are gaining more and more importance. Smart teams plan their draft strategies around those extra choices and they are frustrated when they don't get what they want.

With free agency midway through its second decade of existence, it's pretty evident teams can't buy a championship through free agency. The salary cap gives a team the leeway to enjoy one or two years of free-agent spending, but big spending will eventually create cap problems. Plus, as teams have found out, the cost of getting the best free agents is so high, it's hard to get more than one or two top free agents.

So if you can't buy a championship by obtaining free agents, can you win one by losing your own players in free agency? In some ways, you can, and the top teams are trying to do just that.

First, a review of how compensatory picks work. Under the NFL's collective bargaining agreement, teams that lose more or better "compensatory" free agents than they acquire in a year are eligible to receive compensatory draft choices. No team can receive more than four. The choices range from the third to the seventh rounds, and they are all positioned at the bottom of the round.

The NFL Management Council determines the number and value of the compensatory picks, and it guards the secrecy of its compensatory formula like Coke guards its secret recipe. This much is known: The NFL formula is based on salary, playing time, postseason awards and the net of free agents lost versus free agents signed.

Compensatory picks aren't sexy picks, but they can be very important.

Look at the four teams that have a reasonable chance to get four compensatory picks -- Baltimore, San Diego, New England and Indianapolis. Those are four of the six AFC playoff teams and they are operating in the 2007 offseason with the belief that they are going to be winners in the compensatory pool.

• The Ravens traded a fourth-round choice last year for quarterback Steve McNair and they gave up a No. 3 and a No. 7 for halfback Willis McGahee and locked him up to a seven-year contract. Part of the reason they made those moves was based on the belief that they would be getting four compensatory picks in the draft following a 2006 free-agency period in which they signed three free agents and lost nine. Figuring departed halfback Chester Taylor, defensive lineman Anthony Weaver and safety Will Demps could net choices between rounds three and five, the Ravens felt more comfortable trading away draft picks.

Plus, they have no plans of signing an unrestricted free agent this year after losing Adalius Thomas, Ovie Mughelli, Aubrayo Franklin and Tony Pashos. They will probably have four good compensatory choices coming in 2008.

• Don't think the compensatory pool wasn't under consideration when San Diego let Drew Brees walk in free agency to the New Orleans Saints. The Chargers don't like to play in free agency, preferring to build through the draft. The Chargers lost seven free agents last year and they signed three with safety Marlon McCree being the only significant acquisition. The Chargers figure to get a third-round compensatory pick for Brees. While that might be 30 cents on the dollar as far as compensation, the luxury of getting an additional third-round pick along with three other draft choices gives them the power to continue to build through the draft.

• The Patriots were too passive last year in losing eight free agents and only signing two -- Reche Caldwell and safety Mel Mitchell. But because they are armed with the likely addition of four compensatory picks, the Patriots have been able to challenge the 49ers for the best and most aggressive offseason. Those picks are part of the reason they traded a No. 2 and a No. 7 to get wide receiver Wes Welker.

• The Colts should get four draft choices, too. They signed kicker Adam Vinatieri but they lost Mike Vanderjagt. After that net exchange of kickers, the Colts lost four other free agents. Giving up a second-round pick this past season for defensive tackle Anthony McFarland might have seemed like a steep price to pay. But the Colts had the luxury of making that move because they knew they had extra draft choices coming.

It has to say something that four of the potential top teams in this year's compensatory pool are four of the best teams in the league. While you can try to buy a championship, you can stay in the Super Bowl race if you are smart about how you lose your players.

John Clayton is a senior writer for ESPN.com.