What is Draft Choice Compensation?

Draft Choice Compensation refers to the mechanism that allows a team to receive additional draft picks if a player they had previously drafted is signed away by another team in free agency. This system is designed to encourage teams to develop talent through their own drafting efforts and provides a form of compensation for losing such talent. By receiving draft picks in return, teams can continue to build their rosters, promoting a competitive balance in the league.

The other choices do not accurately capture the essence of Draft Choice Compensation. Selecting additional draft picks is not the focus of this term, and a penalty for exceeding the salary cap is a distinct concept related to financial regulations rather than player compensation. Lastly, while a bonus for drafting successful players sounds positive, it does not align with the idea of compensation for losing a player to free agency.