The world of sports and cryptocurrency have found themselves colliding a lot in recent times as cryptocurrency is focused on mainstream adoption and exposure. This has manifested in various crypto and blockchain firms sponsor sports events such as Litecoin sponsoring a UFC match and as well as another crypto firm sponsoring the Houston Rockets basketball team in the United States. Blockchain has also been applied by various sports teams for the tracking and authentication of their merchandise in order to combat fraud in the market and give a better experience to the users.
Unfortunately, the tokenizing of contracts is not likely to be the next from a blockchain application within sports as it was reported on September 27, 2019 at the National Nasketball Association has informed Brooklyn Nets player Spencer Dinwiddle that he cannot tokenize his $34 million contract.
Contracts and Crypto
According to the NBA, the reason that Dinwiddle cannot tokenizes his contact is because it goes against the collective bargaining agreement and this was explained in a statement from the NBA themselves.
“According to recent reports, Spencer Dinwiddie intends to sell investors a ‘tokenized security’ that will be backed by his player contract. 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,” the statement says.
Despite this, Dinwiddle is not backing down and has stated to the press that he will attempt to better illustrate this deal to NBA officials and hopefully change their mind on the subject. Should their mind be changed, we could see many more basketball players in the league choose to tokenize their contracts and this could lead to even more attention towards cryptocurrency and blockchain.
“What better way to be invested in a player as a fan than to have some level of skin in the game. […] With the way mine works, if I play well in that player option year and we split the profits up the first year of my new deal, it greatly appreciates the return on this investment vehicle,” he said.
Dinwiddle’s plan was to allow investors buy into his $34 million contract and bet on the fact that he could play well enough to any more lucrative one in his second year and this was to be issued out on the Ethereum blockchain by his own company.