Olympic Athlete Finances: From Poverty to the Penthouse
I must confess to being completely consumed by the Olympics.
Where else can you watch a 16-year old Asian-American high-schooler beat down a 49 year-old Asian-Dutch woman while taunting her with ping pong slang in Chinese and the next moment watch the most decorated bong-smoking Olympian in history beat down a bling-laced-mouthgarded d-bag in a Speedo?
As I watch every moment of this tantalizing nonsense, I have grown an incredible admiration for the athletes who train, at times, 10 hours or more every single day for the last four years (and most of their lives leading up to that), just to have a miniscule shot at being anointed the very best in the world at their sport.
That takes passion. It takes dedication.
And it takes cash. Lots of cash.
So it got me curious… just how much does it cost to rear an Olympic athlete?
And what are the potential windfalls that come with victory?
Lets find out…
Training Costs of Olympic Athletes
If your parents start your training at a young age, they will be in for an expensive ride. Factor in the cost of training facilities, coaching, uniforms, equipment, travel for competitions, physical therapy, and even sports psychology.
Elite gymnast training facilities can run around $1,000 a month for coaching and travel expenses. Leotards and warm-up suits alone can run $300 to $500 for a complete set. Is it merely coincidence that the mother of American gold medal winning gymnast, Gabby Douglas, filed for bankruptcy earlier this year?
Forbes estimates the following ANNUAL cost and years of training to raise a summer Olympian:
- Archery $25,000+ (4+ years)
- Table Tennis $20,000+ (8-12 years) – seems high
- Fencing $20,000 (10-15 years)
- Gymnastics $15,000 (5-8 years)
- Weightlifting $5,000 (10 years)
- Cycling $3,000 (3-10 years) – seems low
US Olympic Team training and travel cost are covered for the athletes and coaches. The athlete’s family, however, must foot the bill to travel to the Olympic games to watch their loved ones pursuit of gold. To that end, Jordan Wieber held a fundraiser at her church to raise cash to send her family to London.
China has, not the only, but definitely the most publicized state-sponsored Olympic sports program. Children are accepted into the program at a young age and trained to become Olympic athletes for years, sometimes decades.
This is all paid for by the Chinese government, but it comes at a steep cost. The program has a very strict regimen and the children grow up with little family interaction. There was backlash when news broke that Chinese gold medal diver Wu Minxia was not told about her grandparents dying a year ago and her mother fighting cancer for 8 years.
Wu, age 26, has been competing training daily since age 6, didn’t attend school, and didn’t see her family. Wu’s parents watched her perform in London from the stands, but didn’t meet her in person before the event. Her father says, “We’ve known for years that our daughter doesn’t belong to us anymore”.
China – you know what??? You’re still going to lose in the medal count to the U.S., despite your inhumane, regimented sports program and having ONE BILLION more people to draw from!
The Scholarship Blessing
College students training on scholarships are often in much better financial shape than those who are self-supported. They are getting an education, access to top notch training facilities, and elite coaching for free.
There is one big drawback to a scholarship, however. Amateur athletes cannot accept sponsorships if they would like to retain high school or NCAA eligibility.
Olympic swimmer, Missy Franklin, a 17 year-old, high school senior, had recently turned down $130,000 in sponsorships BEFORE winning gold, because she desires to have a normal “down to earth” college-student athlete experience. Post gold, Forbes estimates that “normal college experience” could cost her as much as $2 million a year in endorsements. I applaud her ethics, but…… DAMN!!! College isn’t that great, Missy!!!
Olympic Medal Payouts
Missy Franklin’s story is well publicized, but she is a bit of a media darling – 17, humble, a great smile… and a world record holder. But what about other medal winning athletes?
- gold medals: $25,000
- silver medals: $15,000
- bronze medals: $10,000
That would bring Michael Phelps total cash winnings on his 22 medals to $500K.
It’s not all fun, cash, and games though. Cash prizes from the U.S. Olympic Committee are considered taxable income. The income taxes on a gold medal can run up to $9,000 for each medal. There is legislation to make that income tax exempt.
Some countries dish out even larger rewards for gold medals, such as $182,000 in Italy, $135,000 in Russia, and $100,000 in the Ukraine.
Others, like Great Britain, do not offer a cash prize for medal achievement.
Is a Gold Medal Really Gold?
Outside of cash prizes, just how much is that giant chunk of gold worth?
Believe it or not, the gold medal is not real gold. It is 93% silver and 6% copper, and worth about $650 as scrap metal, depending on current market values. The silver medals are worth about $330, and the lowly bronze are only worth $4. However, the medals could be auctioned off at a price much higher. A gold medal worn by Mark Wells, a member of the 1980 “Miracle on Ice” U.S. men’s hockey team, garnered $310,700 at an auction.
The most significant earnings from winning a medal come from the subsequent endorsements. If the sport you are in is popular, you have a likable personality, and you are considered attractive, then you are in for a grand prize.
Gabby’s mother is likely to get some emergency relief, as her daughter stands to make between $1 million and $3 million a year in endorsements. Michael Phelps, prior to the 2008 Summer Olympics, was reportedly earning an estimated $5 million annually from sponsorship deals from companies like Speedo, AT&T, and Visa. After 2008, his salary increased to at least $6 million a year. Those earning are expected to rise with his 2012 achievement of breaking the world record for most decorated Olympian.
Then there’s the road-shows. Each of the “Fab” five American gymnasts will make $100,000 for participating in the 40-city Kellogg’s Tour of Gymnastics Champions that begins Sept. 8 in San Jose, California, and ends Nov. 18 in Brooklyn, New York.
Others, who don’t get gold, or who don’t meet society’s interpretation of good-looking (see American Weightlifter Sarah Robles story for a tearjerker) will likely be forced by poverty in to abandoning their sport.
Unless, of course, you’re Middle Eastern royalty or Mitt Romney’s horse. See you at the glue factory, Rafalca.
Olympic Athlete Finances Discussion:
- If you had extreme athletic capabilities or passion would it be worth risking a career and financial goals for a chance at Olympic glory?
- Could you turn down millions to retain amateur status, like Missy Franklin?
- Who is your favorite Olympian, and why?