The National Basketball Association (NBA) has refused Brooklyn Nets player Spencer Dinwiddie’s request of tokenizing his USD 34.4 million contract.
As reported by The New York Times, NBA argued that Dinwiddie’s request violates the collective bargaining agreement. They added,
“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 responded by insisting that he only wanted to illustrate better the investment scheme for league officials in a bid to change their minds. He commented on his proposition:
“What better way to be invested in a player as a fan than to have some level of skin in the game. […] With the way mine works, if I play well in that player option year and we split the profits up the first year of my new deal, it greatly appreciates the return on this investment vehicle.”
If the initiative were to be allowed, investors would have been able to bet and capitalize on Dinwiddie’s performance, which would lead to an even more lucrative contract after the second year. The initial plan was to allow investors to buy into the three-year USD 34 million playing contract.
The player wanted to conduct an IPO. of its Ethereum-based security token developed by his own company, Dream Fan Shares. He also offered guaranteed percentage points in interest to the investors over the duration of the contract while setting the minimum investment to USD 150,000.
Image Courtesy: pixabay.com