Spencer Dinwiddie, who is the eighth-most valuable point guard, recently announced that he would soon release a tokenized investment vehicle for his $34 million NBA contract on January 13. He said that he would go ahead with the tokenization of his contract whether the NBA approved of it or not.
According to news reports, Spencer Dinwiddie will launch a digital investment vehicle similar to an ICO. To do that, the point guard will take a portion of the funds from his three-year contract with the Brooklyn Nets, which is worth around $34 million and tokenize them through the DREAM Fan Shares Company that he owns. However, this news has not gone down well with the NBA, which has threatened to cancel his contract.
In essence, Dinwiddie will be able to earn some of the money from his contract upfront instead of waiting for three years to unlock all the cash in his contract. Those who invest in the project will get SD$8 tokens, which will grant them a stake in the future of Dinwiddie’s earnings. According to him, this will allow his fans to invest and earn money from his success as a player.
Potential Problems with the NBA
While Dinwiddie insists he will go ahead with the plan, the NBA has not permitted him to do that. They have been engaged in talks with the player for months but thus far, it would appear no progress has been made. The point guard now says he is prepared for any disciplinary action taken against him if he goes ahead with the launch.
Originally, Dinwiddie was going to launch the tokenized contract in October last year but interference from the league caused delays. According to the NBA, this would be a violation of the terms of his contract.
The NBA cited a clause in the contract that states, “No player shall assign or otherwise transfer to any third party his right to receive compensation from the team under his uniform player contract.”
According to Dinwiddie, he has drafted a new plan that does not violate the agreement he has with the league. For instance, he notes that his new plan does not tie the investment directly to his NBA contract. He also added that the tokenization plan would be good for the NBA since it would ensure higher levels of engagement among stakeholders.
According to an NBA official, the latest plan from Dinwiddie is being reviewed. The head of communication at the league confirmed that Dinwiddie’s advisors had furnished them with new information regarding the digital investment vehicle and they were reviewing it to see if it violated their contract terms with the point guard.
No matter the outcome, Dinwiddie has said he will go ahead with the launch and he is prepared for the fallout. If things do not work out, he could lose his current contract with the NBA. However, that is unlikely to happen since he is currently at the top of his game and quite valuable to the league.