Starting in 2012, the familiar Type A and Type B free agents, based on the Elias ranking system, will be eliminated. Now the only free agents subject to compensation will be those who are offered contracts equal to the average salary of the 125 highest-paid players in the game as they enter the free-agent process. Players also have to be with a team for an entire season to be subject to compensation, so pending free agents who are traded at midseason will not generate extra picks for the teams that acquire them.
A team that signs one of those free agents will give up its first-round pick. Unlike before, when the top 15 overall picks were protected, now only the top 10 are protected. In those cases, the team will lose its second-highest selection (not necessarily its second-round pick, as before).