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2024 compensatory draft picks may dictate the Chiefs’ offseason

Kansas City may have a strong incentive to be careful with salary cap space.

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Many pundits expect the Kansas City Chiefs to be aggressive at the start of free agency next week after Monday’s surprising decision not to place a second franchise tag on left tackle Orlando Brown Jr.

With almost $18 million in cap space now available after Tuesday’s release of defensive end Frank Clark, Chiefs general manager Brett Veach likely has the means to pursue any free agent he chooses. However, the league’s formula to compensate teams with future draft picks for free agency losses may deter him from being too aggressive.

Though the league has not confirmed compensatory selections for this year’s draft, Over the Cap projects that the Chiefs will receive three additional selections. The site projects the Chiefs will receive sixth-round picks for losing wide receiver Byron Pringle and defensive tackle Jarran Reed as free agents last season. The Chiefs are also projected to gain a seventh-round selection for losing cornerback Mike Hughes — with the caveat that the analysts are less confident Hughes’ contract with the Detroit Lions will qualify for compensation.

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The Chiefs would have been projected to receive a fourth-round selection in this year’s draft for losing cornerback Charvarius Ward — who signed a contract with the San Francisco 49ers worth $13.5 million per season. However, the Chiefs’ signing of safety Justin Reid from the Houston Texans likely negates compensation for losing Ward.

Because free agency signings cancel potential draft selections for losing players, the Chiefs may need to be careful with the contracts they hand out this spring.

By not receiving the franchise tag, Brown will qualify for the league’s compensation formula. Five other potential Chiefs’ free agents are realistic candidates to sign contracts with other teams resulting in compensation:

  • Offensive lineman Andrew Wylie
  • Wide receiver JuJu Smith-Schuster
  • Wide receiver Mecole Hardman
  • Defensive tackle Khalen Saunders
  • Safety Juan Thornhill

Because he was released from his existing contract, the Chiefs will not qualify for a draft pick if Clark signs elsewhere.

Unless Brown has badly misjudged his market, he should sign for among the highest average-per-year (APY) in free agency this offseason. Assuming that does not happen in Kansas City, the Chiefs may gain a third-round selection in 2024. The top compensatory pick will be 96th overall (the Miami Dolphins have forfeited their 2023 first and 2024 third-round selections as punishment for tampering last offseason).

If, as expected, another team inks Brown to a large contract early in free agency, expect Kansas City to avoid a major free agent signing that might cancel a third-round compensatory pick. Should the Chiefs sign a qualifying free agent, they will want to be sure the contract value pairs it with a lower-cost free agency loss for cancelation purposes.

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On Sunday, ESPN’s Jeremy Fowler revealed that the Chiefs are likely to lose Hardman and Thornhill in free agency. The market will determine what level of compensation may result from their potential departures.

Fowler also claimed that the Chiefs hope to re-sign Smith-Schuster, which NFL Network’s James Palmer corroborated on Tuesday.

While signs may be pointing up for the wide receiver’s return to Kansas City, things can change quickly as the league year begins. Virtually all analysts also expected the Chiefs to tag Brown until Monday afternoon.

Wylie and Saunders have difficult markets to predict.

After taking a pay cut to remain with the team in 2021 and returning on a four-year qualifying contract in 2022, Wylie would be justified in taking his highest offer coming off a strong postseason performance. With the likelihood that Brown may move on, however, the Chiefs may circle back to their right tackle to maintain continuity next season.

A range of possibilities is possible for the talented but inconsistent and oft-injured Saunders. Because Kansas City can offer him a four-year qualifying contract to pay him an extra base salary on a one-year deal, a potential outside offer would likely have an APY that qualifies for compensation.

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Teams can receive a maximum of four compensatory selections in any draft. Should the Chiefs lose five or more qualifying players, they could still receive four compensatory picks even after signing a premium free agent.

It is possible to remain active in free agency while protecting potential compensatory selections. Just as Kansas City cannot receive a pick for losing Clark, they would not be penalized for signing players released from other teams. This could help the Chiefs if they identify former Tampa Bay Buccaneers left tackle Donovan Smith, who was released on Tuesday, as a placeholder to replace Brown while a rookie develops.

Players signed to minimum salaries, including the veteran salary benefit, also do not factor into compensation. Restricted free agents and other players with fewer than four accrued seasons also do not jeopardize potentially-awarded draft picks under the formula.

Finally, players signed after the draft who might otherwise qualify — such as the contract former Chiefs safety Tyrann Mathieu signed with the New Orleans Saints in May — do not affect the compensatory selection process.

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