Explaining Type A, B free agents 

November, 28, 2006
Some top free agents bring a small amount of compensation back to their former clubs when they sign with new teams in the form of extra picks in the subsequent Rule 4 draft. Although this rule was ostensibly designed to give clubs some kind of compensation for losing good players, especially lower-payroll clubs who couldn't or wouldn't retain those top free agents, it was also put in place to produce a slight drag on free-agent salaries. Not only has it clearly failed on both of those goals, but it has slightly distorted the market for free agents, making certain players more or less appealing than they otherwise would be.

The compensation rules were simplified in the most recent collective bargaining agreement, so that now there are only three types of players:

• Type A players, ranked in the top 30 percent of players at their positions. A team that signs a Type A player gives its top draft pick to the club that the player is leaving. The "losing" club also receives a supplemental pick in the "sandwich" round between the first and second rounds.