Contended to be a terrible dive (4)
I believe the answer is:
vied
'contended' is the definition.
('vie' can be a synonym of 'contend')
'a terrible dive' is the wordplay.
'a terrible' indicates anagramming the letters.
'dive' is an anagram of 'VIED'.
'to be' is the link.
(Other definitions for vied that I've seen before include "'Competed, contended (4)'" , "Contested in dive" , "Competed in dive" .)