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The Olympics and Money: Winners and Losers

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I have to start this article with a few disclaimers.

1. I haven't watched much of the Olympics this year... probably about 3-4 hours total. I know there are people who watch more than that each day. They can tell you all the details about each Olympian's life to a degree that I can not.

2. There are some obvious winners when it comes to the Olympics (See: Bolt, Phelps, etc.).

3. Every country is likely to have a different economic system for coaches, athletes, etc. The examples I found are mostly about the United States, but I wanted to make this article a little broader.

Behind the obvious winners it seems to me that there's a lot of losers when it comes to the Olympics.

Losers: The Athletes

There's no shortage of stories about Olympic athletes having financial difficulty. Here's what Money Magazine wrote about cyclist Bobby Lea:

"Actually, for Lea, cycling has been less like a pot of gold than a money pit. The most he’s ever earned in a year is $32,500. He has $10,000 in the bank, zero retirement savings, and $19,400 in credit card debt. His parents have spent tens of thousands of dollars supporting his efforts..."

If that isn't bad enough, Lea's only experience in the workplace is making subs when he was 17. There's potential for endorsements, but they aren't a strong possibility for his type of cycling. Coaching is always an option too.

Need another example? The Wired writes: It’s Really Hard to Make Money as an Olympian.

Finally, this Washington Post article gives a more aggregate view:

"There is no comprehensive data on U.S. Olympic athlete pay, but information collected by a nonprofit last year from 150 track and field athletes ranked in the top 10 in the country in their events found an average income of $16,553."

And let's not getting into the topic of taxing gold medals.

Losers: The Athletes' Parents

It's one thing for the athletes to not get paid an income, but we should consider the parents as well. The Bobby Lea story above explained that his parents have spent tens of thousands to support him, but they aren't alone.

Back in 2012, one of my favorite writers, Kimberly Palmer wrote Why Olympic Athletes’ Parents Go Broke"... Gymnast Gabby Douglas’s mother, Natalie Hawkins, who filed for bankruptcy, and Ryan Lochte’s parents, who are facing foreclosure"

Obviously, these Olympians have been successful enough to more than cover the financial problems of their parents. However, there's just a handful of these famous names who make the big money. As the article explains further, the costs of training can be as high as $100,000 a year. (Though the Wired article shows it can be a more "reasonable" $20,000 range number for runners and swimmers.)

Losers: The Host City

I remember Boston was bidding for the Olympics and the locals were praying that they didn't get it. It became a big political fight. Why?

As Five Thirty Eight writes, Hosting The Olympics Is A Terrible Investment. From the article:

"The 2014 Winter Games in Sochi blew their budget by 289 percent. The 1980 Winter Games in Lake Placid overtopped projections by 324 percent. And the 1976 Games in Montreal ran a staggering 720 percent over projections; the city spent three decades paying down the bill."

and as one expert, David Goldblatt notes:

"There’s this kind of relentless underestimation of costs, because if anyone knew the real bill at the beginning they would never sign up... people have been getting away with a sort of statistical and accounting murder."

If there's a silver-lining to any of this, I'm adding "statistical and accounting murder" to my lexicon. Unfortunately, I'll be needing to make a lot of use of it.

Winners: The International Olympic Committee and Other Executives

The aforementioned Washington Post article seems to show that the Olympic Executives seem to be making the real money:

"At the very top of 'the Movement' sits the International Olympic Committee, a nonprofit run by a 'volunteer' president who gets an annual 'allowance' of $251,000 and lives rent-free in a five-star hotel and spa in Switzerland."

Is it just me, or can you hear John Oliver's voice in your head mimicking the volunteer saying, "No, I need MORE than a quarter million dollars. It must be MORE"?

The article covers a lot more like the USA Swimming Executive Director who makes $854,000 a year. The article focuses largely on groups in the United States that obviously wouldn't apply to some smaller countries.

A Final Olympic Thought

I'm probably not going to write about the Olympics again this games, so I wanted to get one last thing in. I was searching through my archives and found that 8 years ago, I wrote about the the injustice done to Alicia Sacramone in the 2008 games. At the time, I wrote, "I have to wonder what might become of Alicia Sacramone."

It seems like she's done well enough. She is considered one of the most decorated gymnasts in history. She married NFL quarterback, Brady Quinn. Earlier this month, they welcomed their first baby into the world. Let's end this on a happy note and put her in the Olympic "Win" column as well.

Posted on August 17, 2016.

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2 Responses to “The Olympics and Money: Winners and Losers”

  1. Kosmo says:

    This is spot on.

    Even the high profile athletes who win can’t necessarily cash in. Katie Ledecky plans to swim collegiately at Stanford and won’t be able to accept any endorsements without forfeiting her NCAA eligibility.

    This year’s US Olympic team has 554 members. How many can you name off the top of your head? 25? 50?

    There are 41 members of the rowing team, 6 members of the table tennis team, and 14 members of the fencing team. Even the best athletes in those sports are unlikely to make any endorsement money outside of perhaps endorsing niche products for their sport.

    Also, most of the athletes aren’t going to win gold, or even bronze. There are 47 members of the swimming team. Many of them have trained for years at great cost to became insanely fast swimmers – but a few seconds slower than the stars of the sport. Those swimmers might train just as hard as Michael Phelps, but they’re not going to pop up on a Wheaties box.

  2. Geoff says:

    Hey LM,

    This is a great article showing the trials and tribulations of being an “unsuccessful” professional athlete. I don’t follow many sports and I’m well aware of the FIFA corruption thanks to John Oliver, therefore I’m less than shocked about the horrible finances of many athletes.

    Adding onto this subject with the Olympics in particular, many of the athletes have little to no marketable personality. It’s incredible how few videos I see of Olympians on my news feed for FB, considering the games are currently happening. Also, it comes down to success+ which basically means you have to have more than medals to be successful. Having medals is nice, but you need to be good in front of the camera, have decent looks, have a family people can care about, and preferably an emotional story of hardship. I can’t think of any current athletes I regularly see on TV with sponsorship’s that are not good looking, and that goes for the former Olympians who are announcers.

    The final reason for why many athletes are losers in my opinion is the sport they choose. America is particularly polarized when it comes to sports, and either likes it or does not ever care (unless an American is involved)…and even then there is little to no coverage. To be fair, I don’t watch the Olympics to see the equestrian sports, field hockey, handball, or many of the track and field events, and the money follows the sports which draw in the most ratings. If you are the best at water polo, you probably shouldn’t expect to make as much as someone who is the best at the 100m sprint…not all sports are equals. Especially, the equestrian sports like dressage…wow that one is stupid. Those horses aren’t cheap, the money probably isn’t very good, and there aren’t many sponsors looking to put that on an advertisement campaign. These athletes and parents need to realize the hardships they are signing up for in advance, and pick sports that people actually care about.

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