Spencer Dinwiddie has plans to convert his three-year, $34.4MM contract into a digital investment vehicle that would allow investors to buy a digital token backed by his contract, something that would allow the guard to secure a large upfront payment. The league, which sought outside legal counsel on the matter, is not approving Dinwiddie’s venture for a variety of reasons, as Shams Charania of The Athletic learns.
“At the request of Spencer Dinwiddie and his advisors, we have reviewed a number of variations of their digital token idea,” said Dan Rube, the NBA’s Executive Vice President and Deputy General Counsel. “All of the ideas presented would violate collectively bargained league rules, including rules prohibiting transferring a player’s right to receive NBA salary, gambling on NBA-related matters, and creating financial incentives to miss games.”
The NBA wants to work with Dinwiddie to find common ground, Charania writes. Dinwiddie has met with the league twice over the past month in an attempt to find a resolution that allows him to move forward with his venture. The guard has made several changes to the structure of his investment vehicles that would appease the league and attempted to alleviate concerns about “third-party assignment” or the transferring of his contract, which would violate the Collective Bargaining Agreement.
The latest hangup is over Dinwiddie’s 2020/21 player option, which is worth $12.3MM. Token holders would be invested in his decision on that option, though the Nets’ guard recently altered the payout mechanism for investors, reducing the risk to zero should he opt in and giving them potential upside should he opt out. Because of his option, the league views selling the digital token as gambling, since his investors would be potentially wagering millions of dollars on whether he becomes a free agent as well as his availability to play games in the league.
Dinwiddie still plans on moving forward with his venture, as he believes the NBA’s lack of approval is without cause. Dinwiddie carrying out his plan could bring penalties such as a suspension, a fine, or even the termination of his contract, though that would be an extreme measure.
Charania hears from a source that Dinwiddie’s goal is to design a method that can further improve a player’s economic options while adhering to the league’s concerns. The National Basketball Players Association recently release a statement supporting Dinwiddie.
“The NBPA’s mission is to support its members and we are currently assisting Spencer and his business associates in seeking to address the League’s concerns,” the NBPA said in a statement. “Our hope is that a resolution satisfactory to all parties can be achieved.”
For now, the two sides are in a standstill over the combo guard’s plan. Dinwiddie has played in 13 games for Brooklyn, starting two in place of Kyrie Irving. He’s averaging 18.5 points and 4.8 assists per game and the Nets are 5-8 on the season.
A bizarre yet fascinating story. For everyone’s sake, I hope Dinwiddie can find a way forward that doesn’t risk cancellation. That would be a pretty severe penalty for a guy that’s just trying to come up with a new way to make money…
This makes no sense to me, feels like some business associate will get rich and we will see a 30 for 30 about Spencer dinwiddie being broke in 5 years
Dinwiddie got in to Harvard or Princeton I think, he is not some sap being hoodwinked.
He is trying to be an innovator and sees the contacts and reputation he is gaining through all this as the big gain.
In terms of actual money and wanting a lot of money upfront… that part is kind of nonsense. If he has a $13m salary, he’s getting hundreds of thousands of dollars every two weeks… that’s already a big payout. What could he do with a $10m check? Though maybe you’re right maybe he wants it to buy a timeshare on Mars or something.
You can get into any Ivy League school with just okay grades if you’re a plus athlete. As long as you’re not Cs, Ds, Fs.
Digital investment vehicle has scam written all over it. Stay away man.
#FreeDinwiddie
It’s not that risky for anyone, even if the contract is terminated, since he’s worth more than 3/$34. I mean, 19-2-5, and A/T 4.8/2.5 is decent. IMO Dins is kind of gunning so his %s are down but ppg is up. Some of his shots seem more in-rythm than likely, like Nick VanExel.
The NBA has a point; he can adjust his salary after his next 1.9 years to give his investors a bonus, setting up his next venture. This messes with the CBA system even though it is his money.
It’s more of a bond based on the third year than a stock based on all three years, and it’s made with several investor protections.
Dins gets a so-called “maverick” reputation on Wall Street. But, courts like the CBA.
I don’t get what people would be investing in? How is this different than a payday loan? Scaaaaaaaaam
The worst that can (likely) happen is he opts in his 3rd year. That still makes a profit for the investor, just not a big one.
Oh, because 34.4 million dollars isn’t enough…..
Ya. What kind of a person wants more money? Outrageous!
Man & people complains about the amount of stories about Melo?!?!? Why so many stories about this guy who is an average player at best unlike Melof a future HoFer & all of it is just about greediness, wanting even more money, if he wants more he should work in becoming a better player, then he will be paid more, right?
This we do not allow CHINA has left the Chat Room y’all
Something to keep an eye in is how long the nbapa supports spencer. Its a good sign they are rn but if he goes through with this and fights the nba on it the courts will side with the nba due to the cba. Legally the only chance he wins if he leaves the nbapa making the cba mute which could really hurt the power of what has arguably become the most powerful sports labor union in the country