Brooklyn Nets guard Spencer Dinwiddie is said to finally be issuing shares tied to his contract beginning January 13 through his DREAM platform. Just to remind y’all, in September last year NBA blocked this idea. The organization then claimed that Dinwiddie’s plan to bond one part of his contract earnings for a security token offering is against the league’s collective bargaining agreement.
“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 got great public support back then. His plan was to tokenize part of his contract on the Ethereum blockchain, in order to raise $13.5 million from his three-year $35 million contract.
As part of the DREAM Fan Shares platform, Dinwiddie plotted a company where any entertainer could tokenize their contract, taking part of their salary in advance for further investing or immediate use. Token holders would receive Dinwiddie’s regular salary payments, as their investment compensation plus, they would receive earning interest.
Paxos Trust Company was then set for custody and escrow services provider for the project, paying investors out in the Paxos Standard stablecoin.
Love Lasts Three Years?
However, the specific point of this argument was the potential for Dinwiddie to execute an option on the third year of his contract. The third year of Dinwiddie’s Nets contract is a player option for approximately $12.3 million. Let’s not forget that his original tokenization plan called for the possibility of significant dividends for investors IF he elected to opt-out of the final year of his deal in 2021 and come to terms on a more profitable contract with Brooklyn or another team. And that is where the NBA had some real issues with, according to Dinwiddie.
“Pretty much what they said was that the player option was gambling,” he then said, “and that would’ve been cause for termination.”
He actually was promising “significant dividends for investors” because the plan is for him to sign a higher-paying contract. Dinwiddie then explained that perhaps removing this clause and offering a flat bond instead could enable the further processing of this plan to proceed. Accredited investors could purchase tokens for a minimum $150,000 buy-in, giving him his contract’s value upfront.
Be it as it may, months after the idea was primarily rejected, it seems Dinwiddie may finally get what he wanted in the first place.
Securitize CEO Carlos Domingo confirmed on Twitter Friday that his company would act as the transfer agent and technology partner for the project. Dinwiddie himself tweeted that “the Spencer Dinwiddie bond launches January 13th.”
Reviewing the Plan
The official NBA statement says the league was indeed reviewing the modified plan, indicating it may not have actually given Dinwiddie the sign-off to go live on Monday as he intends.
However, during the last 2 months, Dinwiddie said that together with his representatives, including a legal team and a Players Association official, he met with the league four times in person and spoke three times over the phone about the plan. The NBA allegedly took a law firm, Debevoise & Plimpton, to sit in on talks.
Dinwiddie claims he didn’t intend to make an enemy out of the league, and that he didn’t expect its full endorsement his plan.
“But what we did want was for them to be like ‘it’s not terrible’. I stand up for what I believe in and what I believe is right. And so I’m going for it, obviously, in the face of some adversity. But I also wasn’t going to sacrifice my basketball career for this,” said he.