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In this paper I show that the 1995 and 1999 collective bargaining agreements in the National Basketball Association (NBA) instituted a system of below market price maximum salaries for first round draft picks in their first four seasons in the league (rookie scale contracts). These rookie scale contracts have reduced the compensation of non-veteran first round picks by half relative to veteran first round picks, resulting in a annual transfer of $200 million from non-veteran to veteran first round picks. The players paying these transfers were not yet part of the NBA at the time of the 1995 and 1999 agreements and thus played no role in the collective bargaining process. I relate this finding to more general collective bargaining outcomes.