The NBA has informed Brooklyn Nets guard Spencer Dinwiddie that he cannot turn his new contract into a digital investment vehicle, according to Marc Stein of The New York Times. The NBA issued a statement to the Times on Friday regarding Dinwiddie's contract:
"According to recent reports, Spencer Dinwiddie intends to sell investors a 'tokenized security' that will be backed by his player contract. The described arrangement is prohibited by the C.B.A., which provides that 'no player shall assign or otherwise transfer to any third party his right to receive compensation from the team under his uniform player contract.' "
Dinwiddie agreed to a three-year, $34 million contract extension back in December, and planned to do something a little bit different with the future money that is coming his way. According to Shams Charania of The Athletic, Dinwiddie wanted to turn his new deal into a digital investment and receive an upfront lump payment.
Stein reports that Dinwiddie plans to meet with league officials to further explain why his concept, in his opinion, does not violate the CBA rules.
Said Dinwiddie: “When I was on the phone with the league, I told them it wasn’t an assignment. And they invited me to sit down with them and explain the offering, which is what I’m going to do.”— Marc Stein (@TheSteinLine) September 27, 2019
A digital token is a form of digital currency in which the buyer buys a token rather than purchasing the bond from a broker. Via The Athletic:
According to sources, this Dinwiddie bond would pay investors principal back and interest, which would be covered by what the Nets owe him.
Dinwiddie has a player option worth $12.3 million in 2021, and if he opts out and earns more on his next contract, it is unclear how that would impact investors.
The National Basketball Players Association was informed of Dinwiddie's decision this week, sources said.
The 2019-20 season will be the first year of his new contract with the Nets. The Brooklyn guard is coming off a campaign in which he averaged 16.8 points and 4.6 assists while shooting 33.5 percent from beyond the arc.
The Nets are expected to be one of the NBA's top teams for the next few seasons, as they signed Kyrie Irving and Kevin Durant in free agency. However, Durant is likely to miss the duration of the upcoming season after suffering a torn Achilles while playing for the Golden State Warriors in the 2019 NBA Finals.