It appears that Spencer Dinwiddie, who plays guard for the National Basketball Association’s Brooklyn Nets, may get the chance to be the first professional athlete to “tokenize” his contract after all.
To do what? Basketball and other sports stars are typically given multi-year contracts that work out to a certain dollar amount per year. Dinwiddie hopes that by tokenizing his three-year, $34.36 million contract, he will be able to collect its value up front, instead of having to wait.
Dinwiddie plans to sell 90 tokens for $150,000 each to accredited investors. After a year, they will be tradeable. The digital security will pay out 4.95% interest on a monthly basis, and fully pay out when it matures in 2023, according to Forbes. Dinwiddie says the structure he and his legal team have created can be used by other players too.
Delay of game: After months of negotiations with the NBA, Dinwiddie tweeted on Friday that the digital investment vehicle will launch on January 13. He had originally announced the plan in September but met resistance from the NBA, which said issuing the blockchain-based “tokenized security” backed by his contract was prohibited by the league’s collective bargaining agreement.
Gambling? Dinwiddie told Forbes that the league’s biggest objection related to the third year of his contract, which gives him leeway to opt out and pursue a more lucrative one. He had promised investors “significant dividends” in the case he did land a richer deal in the third year. Apparently the NBA opposed that aspect, calling it gambling. Dinwiddie has removed this element from the plan and is convinced that the NBA will now let it move forward.
Stay tuned: Meanwhile, the NBA hasn’t exactly confirmed that Dinwiddie has the all-clear. A league spokesperson issued the following statement yesterday: “Spencer Dinwiddie’s advisors provided us today with new information regarding a modified version of their digital token idea, which we are reviewing to determine whether the updated idea is permissible under league rules.”
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