At odds with NBA over his plan to sell shares
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.
Of course, investors also have the potential to lose money should Dinwiddie opt out of the $12.6 million player option into an ice-cold market unwilling to pay him the raise he’s expecting.
If that sounds like standard daytrading fare, that’s the reason the NBA has a problem with Dinwiddie’s plan, although, the league’s objections have changed many times since Dinwiddie began the negotiations.
First, the NBA felt he was violating the collective bargaining agreement by assigning a contract as a third-party transfer. Dinwiddie’s lawyers explained that wasn’t the case. Next, the league argued the player option on the third year of his contract is considered a token towards gambling.
Dinwiddie finds the gambling objection particularly ridiculous. After all, a player opting out of a guaranteed paycheck to enter the free agent market is always a gamble.
“That’s up for interpretation, right?” he said. “But if I opt out of my player option and get a max contract, am I gambling? Oh it’s a slippery slope,” he continues, before hitting his point: “It’s not the fan piece that makes it gambling, whether it’s a million people involved or one person involved. It’s the piece of it that’s either gambling or not gambling. So if it is [gambling], then guys, that’s a CBA issue. I didn’t make a player option to do this. I just said since I have a player option, let’s do this.
“I’m merely just saying since the CBA is the way it is, can I do this with my money?”
The NBA’s answer remains no.
According to a recent report by The Athletic, the NBA has taken additional steps to deter Dinwiddie from seeing this through. They have hired outside legal counsel — the Debevoise & Plimpton law firm — and informed Dinwiddie that his digital token cannot be approved.
Dinwiddie intends to move forward with his digital token anyway. If he does so without NBA approval, according to The Athletic, he could be subject to termination of his contract, fines and suspension without pay.
“They got mad and, once again, it’s like guys, I’m not doing anything wrong,” Dinwiddie said. “I mean, we kind of broke down the fact that the assignment was baseless, right? Their new thing was that a player option is gambling. And I was like, if it’s gambling because I’m involving the fans then it’s gambling if I’m not involving the fans, it would just be the option that’s gambling. But you guys put it in my contract, not me.”
The NBA and Dinwiddie are at a standstill, and Dinwiddie says he plans to appeal if the league chooses to take serious disciplinary action against him when he chooses to carry on with his plan.