AFL’s controversial compensation pick system is back in the spotlight

The AFL’s most controversial system could be set to ignite fierce backlash once again as the future of one star remains up in the air.

The AFL’s controversial compensation pick system has been thrust back into the spotlight thanks to the West Coast Eagles.

The Eagles remain glued to the bottom of the ladder having not registered a win through their opening nine games of the 2025 season.

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Despite coming close to knocking off Richmond in Round 9 and Essendon in Round 6, the club has looked like a bona fide wooden spoon winner.

But now conversations have turned to the club letting skipper Oscar Allen walk out in order to secure a top-band compensation pick.

If the ladder were to remain as it currently sits and Allen departed, the Eagles would hold the top two picks in the upcoming draft.

Veteran AFL journalist Damian Barrett, who has long been a sceptic of the system, voiced his concerns once again on Monday night.

Damian Barrett isn't a fan of the compensation system.

“No, it’s not right. I’ve never been clear on (the compensation system), and I’ve had briefings on it and I’ve been given documentation on it, it changes every year,” Barrett said on Nine’s Footy Classified.

“Look at Joe Daniher. When he left Essendon to go to Brisbane he signed a three-year deal. Within 12 months of that deal being signed, the Lions added two years to it.

“The compensation pick was handed out on the initial contract which was clearly front-ended enough to make it appealing to have Daniher as a pick for Essendon in the top 10.

“They don’t like us talking about it, but that’s a reminder of how recent it was. They have supposedly cracked down on the loophole.”

Oscar Allen’s future at the West Coast Eagles remains up in the air.

Sam Mitchell met with Allen in March. (Photo by Morgan Hancock/Getty Images)

The compensation system has previously sparked fierce backlash among footy fans over the years with teams happily letting players walk out the door for a juicy return.

In 2023 North Melbourne received pick three for Ben McKay’s departure, while in 2014 Melbourne received the third pick when James Frawley left.

So how does the AFL’s compensation system actually work?

According to the official AFL website the formula behind it all produces a points rating for players based on the following: the new contract of the free agent and the age of the free agent.

Eagles skipper Oscar Allen is only 26 and could fetch a seven-figure contract from either the Brisbane Lions or Hawthorn if he elects to depart.

Those two factors would then net the Eagles a compensation pick immediately after their first round pick. So again right now, that would see them hold picks 1 and 2.

If Allen leaves the Eagles could hold picks 1 and 2. (Photo by Paul Kane/Getty Images)

Essendon great Matthew Lloyd however believes Allen isn’t worth a monster contract given his struggles throughout 2025 and his injury history.

“I would have said at the start of the year, I was so positive about him saying I’d write him the cheque, but right now I wouldn’t,” Lloyd told Nine’s Footy Classified.

“It’ll be really interesting to see what sort of footy he can play because he’s not worth $1m right now. He’s worth probably $650,000.”

While speculation will continue to mount surrounding Allen’s future, the talk around the AFL’s divisive compensation system will be lurking just behind.