There are many different formulas utilized when drawing a conclusion about possible compensatory selections in the NFL Draft. Teams are awarded picks if the amount of free agents they lost exceed the amount of external free agents they signed during the previous offseason.
Here are some standards that the National Football League use.
* A team can receive up to four (4) compensatory selections in a given season.
* Highest round a compensatory pick can be awarded is the third.
* The NFL Management Council decides the rules and hands out the compensatory picks.
* A total of 32 compensatory picks are handed out, no more and no less. If 32 teams do not qualify for compensation, the NFL uses the "who would be drafting first in the eighth round" model to dole out the remainder of the picks.
* While rules are not well known, the NFL does utilize a system based on net free agents added compared to net free agents lost, the value of the incoming and outgoing free agents, playing time, postseason awards and financial terms of the signed contracts from the previous offseason.
* Compensatory picks are handed out at the end of each round and cannot be traded.