Trying to Explain the NFL's Compensatory Draft Pick Formula

The Miami Dolphins are expected to have three compensatory picks in the 2025 NFL draft

Carolina Panthers guard Robert Hunt (50) takes the field during the first quarter against the Arizona Cardinals at Bank of America Stadium. / Jim Dedmon-Imagn Images

We're probably still a couple of months away from officially finding out what compensatory draft picks the Miami Dolphins will get in 2025, though at this point it's about a given that there will be three in total and one of those will come in the third round.

Based on the final prediction from compensatory pick expert Nick Korte of Over The Cap, though, the Dolphins will not get the expected third-round pick for the loss of Christian Wilkins but rather a fourth-round selection, to go with a third-round pick for the loss of guard Robert Hunt to the Carolina Panthers and a seventh-round selection for the loss of safety DeShon Elliott to the Pittsburgh Steelers.

The Dolphins' other free agent losses that could have brought in a compensatory pick — Andrew Van Ginkel, Brandon Jones and Raekwon Davis — were offset by the Dolphins' own free agents acquisitions of last offseason, as the whole compensatory pick system is based on net free agency losses.

And it's indeed a complicated system.

THE INS AND OUTS OF THE COMPENSATORY PICK FORMULA

The whole formula regarding the "compensatory draft system" makes up Appendix V of the Collective Bargaining Agreement between the players and the league, it involves 11 sections, and it's complicated enough to give anybody a headache.

But to summarize things, the NFL puts together a list of "compensatory free agent" (CFA) every year and first is ranked by annual average salary, but then playing time and postseason accolades are factored in to adjust the list.

Once the list is finalized, it's then divided into different levels, where the top 5 percent net a third-round compensatory pick, the next 5 percent a fourth-round pick, and so forth. And then teams that have more losses than gains among those CFAs get compensatory draft picks, up to a maximum of four in any draft.

There's no definitive date for when the NFL will announce the 2025 compensatory picks, but as a point of reference that news was released last year on March 11. GM Chris Grier said at the end-of-season press conference with him and head coach Mike McDaniel that the Dophins would be getting three compensatory picks, confirming the projection from Korte.

The key terms that apply here in the formula are Average Yearly Compensation (AYC) and Compensatory Free Agents (CFA), and CFAs are those players who sign during the unrestricted free agency period and rank in the top 35 percent in AYC, which includes signing bonus, option bonus, salary, roster bonus and reporting bonus.

The qualifying players then are ranked by AYC with the lowest player getting one point, the second-lowest two, and so forth.

Then come additional points awarded based on honors or participation: first-team All-NFL by the PFWA or AP is worth 20 points; All-Conference (if not All-Pro) is worth 5 points: one point for each percent of the total offensive/defensive plays in which the player participated on offense or defense.

All the points then are tallied for a final Financial Numerical Value (FNV), and it's that FNV that comes into play when a team loses more CFAs than it signs during an offseason, which is what happened with the Dolphins in 2024.

Because of the size of the contracts they signed, Wilkins and Hunt initially both were expected to land the Dolphins a compensatory third-round pick. But while Hunt played a full season with Carolina, Wilkins was limited to five games with the Las Vegas Raiders and therefore couldn't add any points to his final FNV.

The Dolphins last got compensatory draft picks in 2020 when they got one in the fourth round and one in the seventh, though they ended up trading both of them.

The Dolphins did get a third-round compensatory pick in 2017 for the loss of defensive end Olivier Vernon, who signed with the New York Giants after the Dolphins placed the franchise tag on him and then rescinded it.