The Art Of The Pick-Swap Trade & Compensatory Pick Process

For the better part of the last two decades, the entire NFL has been trying to catch up to the New England Patriots. Having arguably the greatest Head Coach and Quarterback in NFL history certainly helps but a major reason why the Patriots remain at the top is that they're always looking to innovate and find market inefficiencies on and off the field.

They're not romantic about how the job gets done - that job is to build a Super Bowl champion. At times that can be painful and bring scrutiny as fan favorites such as Ty Law, Lawyer Milloy, Logan Mankins, Randy Moss and Richard Seymour etc all had abrupt departures. Or it can be thrilling and terrific game planning. In the AFC Championship game, the Patriots ran the ball 48 times which allowed them to control the clock and limit the number of possessions for the NFL MVP, Patrick Mahomes, and the highest-scoring offense in the NFL. At the end of the day, the Patriots came out victorious in overtime as they doubled up the Chiefs in total plays (94 to 47) and time of possession (43:59 to 20:53).

In January, Optimum Scouting's Justis Mosqueda discussed the Patriots strategy of building the backbone of their roster through veterans on modest contracts. Another part of the Patriots formula for success in recent years has been pick-swap trades. The latest occurred last Friday when the Patriots acquired DL Michael Bennett and a 2020 7th RD pick from the Philadelphia Eagles in exchange for a 2020 5th RD pick. 

The Eagles were likely going to release Bennett, so instead of getting nothing, they were able to fetch a draft pick. However, from the Patriots side, this simple trade actually accomplishes a number of things from a transactional and philosophical point of view.

1. They acquired a productive pass rusher who has experience along the defensive line. Bennett had 15 Tackles For Loss and 9.0 Sacks in 2018.

2. Bennett has 2-years and $15.2M left on his current deal. By acquiring Bennett via trade, New England no longer has to compete with 30 other teams for his services on the open market.

3. They also are able to replace Trey Flowers without signing an unrestricted free agent. Flowers is set to sign a 5-year deal in the range of $90M with the Detroit Lions once free agency starts on March 13th.

The last piece may seem like the least important of the three but it directly ties into the market inefficiency that the Patriots and other forward-thinking front offices like the Eagles are exploiting. The benefit of finding a replacement for Trey Flowers through trade rather than spending big on an unrestricted free agent like Preston Smith or Ezekiel Ansah is that it allows the Patriots to not lose any ground in the compensatory pick process where they are set to win big again next year.

For those unfamiliar with the compensatory pick process, the SparkNotes version is that each year the NFL awards 32 additional draft picks to teams that lost more free agents than they signed from the previous offseason. The picks dished out can range from the 3rd through 7th round. The formula for how they are handed out isn't public, we know a few factors, but the biggest indicator is based upon how large of a contract the player leaving signs.

Based on the size of contracts that Flowers ($90M) and Trent Brown ($66M) are set to sign, New England is already in line to receive two third-round compensatory picks in 2020. If the Patriots were to spend big in free agency that could cancel out a valuable compensatory pick.

This is the same game that New England played last year where they came away with 4 compensatory picks, which is the max one team can receive in a single year. 

Below is a graphic from OverTheCap laying out how the Patriots offseason moves in free agency netted them 4 additional draft picks.

The Patriots let Nate Solder and Malcolm Butler walk and filled their shoes through pick-swaps. They acquired Trent Brown for a 3rd round pick and Jason McCourty for a 6th round pick. Literal pennies for starters at prime positions.

We've seen the benefits these pick-swap trades can provide transactionally but it is also a perfect team building philosophy for an organization like New England, who is perennially in a "Super Bowl window." New England wants to win now. So for the price of dropping 30-50 slots on Day 3 of the draft, the Patriots have been seeking out proven veterans who can contribute immediately who might be on the outs with their current organization. Again, this strategy allows them to sidestep the compensatory pick process so they can reap the rewards of that system all the while still collecting a draft pick in return.

Another wrinkle to all of these pick-swap trades that the Patriots have done is that they're targeting players at the end of their contracts. This is important because players in their contract year have more incentive to play their best and what organization puts players in a better chance to succeed than the Patriots? This leaves the Patriots with the option to re-sign that player, like Kyle Van Noy, or let them hit the market like Trent Brown. At the end of the day, the Patriots traded a 2018 3rd round pick for 1-year of Trent Brown, a 2018 5th round pick and eventually a 2020 3rd round compensatory pick.

This isn't the first time the Patriots have pulled off this type of heist too. In 2012, the Patriots acquired Aqib Talib midseason. They sent Tampa Bay a 2013 4th round pick for 1.5 years of Talib, a 2013 7th round pick and were rewarded a 2015 3rd round compensatory pick after he left.

These trades don't always net compensatory picks and I know I've beaten this point into the ground but they're moves that fill immediate needs, needs that aren't always easy to address because New England is rarely picking early in the draft, while also providing the possibility of giving the Patriots another bite of the apple in the draft down the road. Even if that's return is a measly 6th round pick we've seen those acquire starting caliber players.

Spanning the past few years the Patriots have done 6 pick-swap trades, including Michael Bennett. The Josh Gordon trade falls just short since he was active for more than 10 games (he played in 11). Because of this New England does not receive a 2019 7th RD pick from Cleveland.

As we head into free agency, there are 75+ players who have reached agreements with teams during the legal tampering period. The Patriots are responsible for 0 of them.

Their plan is clear. With ~$16M in salary cap space at the moment, they will wait in the wings, assess the market on their own free agents like Chris Hogan, Stephen Gostkowski, Malcom Brown, Danny Shelton and Cordarrelle Patterson to see what they might receive and go bargain shopping later.

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Another way for savvy front offices to circumvent the compensatory pick process is to sign players who were previously cut because they do not count against you in the compensatory pick formula. 

Take the Rams for example. Despite their wild offseason last year where they acquired multiple Pro Bowlers through trades and free agency they still found a way to receive 4 compensatory picks. Their signing of Ndamukong Suh didn't count against them because he was cut by the Dolphins.

The Rams are putting that same practice to work in 2019. With Lamarcus Joyner, Rodger Safford & Ndamukong Suh hitting the market the Rams are in line to receive valuable compensatory picks again in 2020. In order to maximize the return, their first signing this offseason was S Eric Weddle, who was cut a few days earlier by the Ravens. Weddle again fills a major need in the secondary.

Howie Roseman and the Eagles also work the system about as well as anyone.

As I mentioned earlier, Philadelphia has used pick-swap trades to their advantage in recent years.. Timmy Jernigan, Michael Bennett, and Desean Jackson were all acquired that way.

Like the Rams and Patriots, the Eagles also are in line to receive at least a 3rd RD compensatory pick due to their free agent class of Nick Foles, Ronald Darby, Jordan Hicks, and Jay Ajayi among others. The Eagles, first signing this offseason was Malik Jackson, who was cut by Jaguars.

There is a reason why good teams stay good and bad teams stay bad. On and off the field it's often the little things that you can control that make the difference.