Shams Charania reports that the NBA and its outside counsel informed Spencer Dinwiddie that his planned cyber investment vehicle is in violation of the Collective Bargaining Agreement but the Nets guard appears ready to press the issue.
If he does go ahead, Charania reports, the league could impose strict sanctions on Dinwiddie, specifically citing the possibility of fines, suspension or even termination of his contract.
The Athletic reporter also disclosed the specifics of the NBA’s complaint, as determined by the outside counsel, Debevoise & Plimpton. The league has said, among other things, that the plan might violated NBA gambling prohibitions.
“At the request of Spencer Dinwiddie and his advisors, we have reviewed a number of variations of their digital token idea,” Dan Rube, the NBA’s Executive Vice President and Deputy General Counsel, told The Athletic. “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.”
Kristian Winfield of the Daily News lays out how it would work...
In basic terms, Dinwiddie’s proposal is to sell shares of his salary as digital tokens. This would functionally turn the contract into a lump-sum, upfront payment rather than a traditional salary. The tokens would be backed by Dinwiddie’s actual paychecks, which are guaranteed, though we don’t know specifics like how much each would cost or how many would be available.
For Dinwiddie, the upside is he would get more of his money right away, as long as people buy the tokens. Token buyers would have the potential to earn a significant return on investment ahead of the 2021-22 season, when Dinwiddie has a player option he can turn down and enter unrestricted free agency, where thriving players generally see their first massive pay raise.
Charania did not report directly on whether the league has threatened Dinwiddie with sanctions but noted, “Should Dinwiddie go through with his plan without NBA approval, he could be subject to penalties such as termination of contract, suspensions without pay and fines.”
Dinwiddie has consulted closely with the NBPA, the players union, on his plan.
- Sources: Dinwiddie, NBA in standoff over contract conversion— Plans to move forward could result in discipline - Shams Charania - The Athletic NBA
- Spencer Dinwiddie remains defiant as NBA contract feud escalates - Mollie Walker - New York Post
- Spencer Dinwiddie on turning his contract into an investment: Free agency is always gambling - Kristian Winfield - New York Daily News