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The NBA is a new, bolder place. We know that because of how involved players are in their own branding, and how in control of their future they are.
But Spencer Dinwiddie wants to take it to the next level.
According to a new report from The Athletic, the Brooklyn Nets star will arrange his newest contract in a manner that allows him to take a big lump sum up front.
At the core of what Dinwiddie is doing is the idea of securitization. Save any fancy financial definitions, this basically means that Dinwiddie is going to seek investors who will give him a lump sum up front for his $34.36 million extension.
The goal for Dinwiddie is to then take that lump sum and invest it. Once he does that — and hopefully after he makes some money off those investments — Dinwiddie will pay back the original sum to his investors.
Via The Athletic:
Dinwiddie, according to multiple sources, is starting his own company to securitize his NBA contract in the form of a digital token as he begins a three-year, $34.36 million extension with the Nets. It’s unclear how much of the contract amount he wants to raise upfront, but it would likely be less than the total amount, according to sources.
What’s interesting about this approach is that Dinwiddie wants to use a digital token. Dinwiddie would be giving investors a digital key to their investment, which they could then use to cash out once the terms of the deal say they are owed their money back.
NBA contracts are guaranteed, but they can be voided for conduct or reduced due to buyouts. That’s unlikely to happen to Dinwiddie, but anyone investing would have to know those risks.
This seems like a pretty aggressive move. Anyone who understands the time value of money knows that cash in your pocket now is more valuable than cash in your pocket later, largely because of your ability to invest and earn interest over a longer period.
That appears to be what Dinwiddie wants to do, and if he pulls it off it could set a new precedent for NBA contracts.