Brooklyn Nets guard Spencer Dinwiddie agreed to a three-year, $34 million contract extension back in December. However, Dinwiddie is doing something a little bit different with the future money that is coming his way. According to Shams Charania of The Athletic, Dinwiddie is turning his new deal into a digital investment and will receive an upfront lump payment.
Charania also reports that Dinwiddie is starting his own company to “securitize his NBA contract in the form of a digital token.” It’s not currently known how much of his contract extension will be given upfront, but Charania notes that it will “likely be less” than the total amount of the deal.
In terms of his new investment, Dinwiddie will give up future income in exchange for a smaller lump. However, with the securitization, Dinwiddie will have more funds to invest.
A digital token is a form of digital currency in which the buyer buys a token rather than purchasing the bond from a broker.
According to sources, this Dinwiddie bond would pay investors principal back and interest, which would be covered by what the Nets owe him.
Dinwiddie has a player option worth $12.3 million in 2021, and if he opts out and earns more on his next contract, it is unclear how that would impact investors.
The National Basketball Players Association was informed of Dinwiddie’s decision this week, sources said.
The 2019-20 season will be the first year of his new contract with the Nets. The Brooklyn guard is coming off a campaign in which he averaged 16.8 points and 4.6 assists while shooting 33.5 percent from beyond the arc.
The Nets are expected to be one of the NBA’s top teams for the next few seasons, as they signed Kyrie Irving and Kevin Durant in free agency. However, Durant is likely to miss the duration of the upcoming season after suffering a torn Achilles while playing for the Golden State Warriors in the 2019 NBA Finals.