CLUBS that bring in free agents should be forced to provide compensation to the club who loses the player, according to former St Kilda head of football Chris Pelchen. 

The present free agency system sees the AFL allocate draft picks based on a secret formula determined by the new contract of the free agent and the age of the player switching clubs.

Compensation picks have come under sharp focus in recent days as Carlton ruckman Matthew Kreuzer considers his future. 

It is possible that should Kreuzer take up a lucrative rival offer, the Blues would gain a first-round compensation pick for his departure which would come after their No.1 pick.

Clubs believe Collingwood is leading the race for Kreuzer, with a four-year deal worth more than $2 million possibly activating a first-round compensation selection to the rebuilding Carlton, leaving it with the first two picks in the draft.

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It would give the Blues first access to top talents Jacob Weitering and Josh Schache and push the Brisbane Lions to pick three.

Pelchen said this type of scenario would hurt not just the Lions but also the other 15 clubs not involved in the transaction.  

"My view is that there should be compensation to the team that's losing a player to free agency but at the same time I think that compensation should be provided by the side that's acquiring the player, more so than the competition as a whole," Pelchen told AFL.com.au.

"At the moment it's unfair for 16 teams to be paying some form of compensation in the draft when they have no control or influence on the player's movement. That's where I think the type of compensation being offered needs to be improved."

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The Saints gained a first-round compensation pick for Brendon Goddard in 2012 and a second-round selection for losing Nick Dal Santo the following season. 

Pelchen said there should be no compensation picks given inside the first round so as not to distort the top of the draft order, and that clubs should contribute to the compensation provided by the AFL if a high-profile player switches clubs.  

He is also an advocate for more transparency in the AFL's process of allocating picks.

"It does need to be reviewed, I know that's being undertaken at the moment, but I'd be a strong supporter of it being more consistent and applying the compensation at the end of the first round [instead of inside the first round]," Pelchen said.

"I don't think it's as big an issue when it comes to the second round, and picks could still be within those later rounds. But when it's within the first round I think the compensation is too significant. 

"The second part is the whole competition shouldn't be made to pay. Some thought should be given to the club that's acquiring the player having to provide some compensation.

"They might have to forgo a pick in a round and/or the industry provides a pick at the end of the first round." 

The AFL has introduced its new points-based bidding system for father-son and academy players in this year's draft, and Pelchen thinks it would be a perfect stage to reassess the compensation structure to work in line with that.

"There's a significant change coming into the draft process this year and I think it's the ideal time to look at how compensation is being provided through free agency," he said. 

"There is a strong advantage for clubs losing players that achieve compensation picks inside the first round."