Spencer Dinwiddie took to Twitter saying he was disappointed by the NBA’s decision to block his proposed digital investment vehicle.
Dinwiddie was referring to the basketball league’s move to block his plan to tokenize and sell shares in his contract citing policy violation, as BeInCrypto has previously reported on. The Brooklyn Nets star contradicted NBA’s take on the issue hinting that there might have been a misunderstanding on the league officials’ part, adding he was open to mutually resolving the issue.
Dinwiddie’s Blockchain Initiative in Sports & Entertainment
Dinwiddie announced Thursday that he was planning on tokenizing a part of his contract with the Brooklyn Nets on the Ethereum blockchain. The objective behind the proposed venture was to raise an additional $13.5 million from his three-year contract.
Dinwiddie signed up with the Nets for a $35 million contract, of which $16 million will be released at the end of the first year.
The basketball star also announced the launch of a new blockchain platform called Dream Fan Shares, pitching it as an innovative investment tool. To summarize the new venture, it aims to enable sportspersons and entertainers to tokenize their professional contracts for raising capital.
Basically, a token holder would pay a sportsperson upfront and in return, recoup the investment with interest at the end of that player’s professional contract. Dream Fan Shares also takes into account that a consistently performing player stands the chance to win a bigger and more lucrative contract at the end of the current tenure, which will then give the token holders further profits to share in.
Of course, like any other token offering, Dinwiddie’s new venture can be considered an investment risk, albeit with the potential to ensure sizeable ROIs.
NBA’s Take on Tokenization of Contracts
The NBA clarified its stand on the matter in a communique to the New York Times. Apparently, the league considers that Dinwiddie’s plan to trade shares of his contracts in exchange for capital is a violation of their collective bargaining agreement (CBA).
Per the CBA, players are explicitly forbidden to reassign or transfer the earnings from their respective teams to third-parties.
The NBA tells @NYTSports that “the described arrangement is prohibited” by league rules because “no player shall assign or otherwise transfer to any third party his right to receive compensation from the team under his uniform player contract.” More: https://t.co/8P3Qyb5imp
— Marc Stein (@TheSteinLine) September 27, 2019
Worth noting here is that Dinwiddie also needs to secure the approval of the National Basketball Players Association (NBPA) to move ahead with his tokenization plans.
Reacting to the NBA’s reluctance to give him the go-ahead, Dinwiddie posted a series of tweets earlier today implying that the league had got it all wrong despite his best efforts.
“[….] I’m not assigning my contract and have been explicit in that when I’ve spoken to them,” he noted.
Saying that the league’s stance on the issue essentially invokes FUD in his plans to launch “a previously unrealized asset class,” Dinwiddie claimed that he had made it explicitly clear to NBA officials that Dream Fan Shares was in line with the guidelines under the CBA.
I look forward to an understanding because as I stated in the previous articles it was made with the @NBA in mind. Hopefully being able to bring added fan engagement to the different players/teams and liquidity for team owners.
— Spencer Dinwiddie (@SDinwiddie_25) September 27, 2019
On a related note, the Nets star had also announced a new partnership with the Tron Foundation earlier on Friday. Under this new partnership, which the Tron CEO Justin Sun was seen promoting on Twitter, Dinwiddie would sell his game-worn shoes and use the profit to donate 8.2 BTC to charitable causes.
Dinwiddie assured fans that he remains committed to the cause irrespective of the outcome of the current dispute with the NBA.
Do you think NBA officials are being hasty with their decision to oppose Spencer Dinwiddie’s planned blockchain initiative? Share your thoughts in the comments below.
Images are courtesy of Twitter, Shutterstock.