Tokenization of NBA Star Spencer Dinwiddie’s Contract is Back On
Brooklyn Nets basketball player Spencer Dinwiddie previously planned to tokenize his NBA contract worth more than $30 million— until the NBA blocked the deal, citing a Collecting Bargaining Agreement (CBA) violation. Dinwiddie says the deal makes no such violation, and will continue to move forward, with or without the NBA’s blessing.
NBA Player Spencer Dinwiddie’s Contract Tokenization Explained
In early September 2019, Spencer Dinwiddie announced plans to tokenize his 3-year, $34 million contract.
A few weeks later, it was revealed that the NBA rejected Dinwiddie’s plans, claiming the deal violated the league’s Collective Bargaining Agreement (CBA).
The CBA is a contract between the NBA— meaning the commissioner and the 30 team owners— and the National Basketball Players Association. The contract dictates certain stipulations regarding player contracts, trades, revenue distribution, the NBA draft, and the salary cap.
Now however, Dinwiddie isn’t giving up without a fight. He says the deal does not violate the CBA, and anything that suggests it does, is simply misleading.
While remaining friendly and hopeful that the NBA will come to its senses, Dinwiddie tweeted,
“Regardless of the @NBA’s position, we will move forward.”
Carlos Domingo, CEO of tokenization platform Securitize— one of the companies behind the deal— tweeted,
“For all the ones that said this was not happening. It is. Innovation requires courage.”
Even if the NBA opts to not be a part of the deal, Dinwiddie says it can— and will— continue without them.
“Even with our desire to partner with the @NBA, it is not necessary. And I want to be clear, this is not and never was an ‘assignment’ nor am I in violation of the CBA. By definition an ‘assignment’ would give fans rights towards the Nets/NBA. [On the contrary] this is a third party business transaction between the fans and I beyond the jurisdictions of those entities. Much like the way no one can tell me which home or car I can buy, I am free to use my money the way I see fit.”
The deal is set to launch in the coming days, on October 21st. It will constitute a regulatory compliant Security Token Offering (STO) as Dinwiddie says he and his team have worked with the SEC for more than a year to ensure compliance.
Ultimately, Dinwiddie’s stance is clear: a free market should determine the success of this deal, and any organization which disrupts its development is a violation of one’s own liberties.
“Quite simply the market will determine the demand for this previously untapped asset class… As we have witnessed, any great business that is built upon its consumers knows how to listen to the demands of that base and adjust as necessary. Although we are individual assets in this instance we are a part of a collective family in the sports/entertainment world as a whole and those same fans should be involved and empowered to determine what their appetite entails. Lastly, as we speak about freedoms domestically and urge athletes to offer comments on situations they maybe weren’t prepared for, it would be a shame if we try to abuse our power to limit similar liberties that can be beneficial to all parties involved due to misunderstanding.”
What do you think of Dinwiddie moving forward with the tokenization of his contract? Let us know what you think in the comments section below.
Image courtesy of NetsDaily.