By Nathan Ikon Crumpton
September 18, 2013
Without the athletes there’s no Olympic team, no $5 billion in IOC revenue, no multi-million dollar TV contracts, no Team USA, and no Games.
So let’s take a look at how American athletes fare from all this money that’s being generated from the sweat of their labors.
1) How much of USOC’s funds are allocated to directly supporting athletes?
Earlier this summer the United States Olympic Committee (the “USOC” for short – the only 501(c)3 non-profit sanctioned by Congress to represent the United States at the Olympic Games) released its IRS 990 tax return for 2012. This allows the public to view and analyze its financial information for the past 4 year “quadrennium Olympic cycle” (or “quad”).
So let’s start with the athletes: how much of the USOC’s expenses go to them?
All of the following services are included in the figures for direct athlete support:
- “Athlete performance pool – support training” (i.e. stipends)
- “Elite Athlete Health Insurance & Other Medical Benefits for Athletes”
- “Operation Gold – awarding top place finishes”
- “Tuition assistance to pursue a college degree”
- And “Special grants not already included above”
The 2009-2012 direct athlete support expense totaled: $81,622,014.
The 2009-2012 expense budget for the USOC totaled: $795,917,076.
That means that 10.3% of total expenses were in direct support of US Athletes.
(Click here to download complete spreadsheet analysis)
2) So where does the rest of the money go?
According to Charity Navigator, an independent non-profit organization that rates other charities’ effectiveness, the USOC still directs 76.2% of its expenses towards “Program Expenses,” from which the 10.3% for athletes is derived. (The USOC earned 3 out of 4 stars on Charity Navigator‘s rating system for finances, accountability, and transparency.)
Here’s a 2009-2011 USOC Athlete Advisory Council (AAC) chart showing the average annual breakdown of expenses:
3) So what is “USOC Member Support?”
Most of the money goes to “member support” which means the individual National Governing Bodies (NGBs) and other institutions that provide services to the USOC.
For example, the largest recipient of USOC funding in 2011 (a non-Olympic year where summer and winter sports have more balanced expenses), the largest recipient of USOC funds was the US Ski & Snowboard Association NGB, with $3.45 million in grants. Following them were USA Track & Field with $2.72 million, US Speedskating with $2.52 million, USA Swimming with $2.49 million, and US Shooting with $1.75 million.
In total, in 2011 17 NGBs received over $1 million in grant money from the USOC. And 37 NGBs or other organizations received between $100,000 and $1 million.
However, it is important to remember that each NGB is its own independent non-profit organization, and can receive funding from its own sponsors and fundraising efforts. For example, although the US Ski & Snowboard received $3.45 million from the USOC in 2011, their revenue for that fiscal year was over $24 million.
4) So at the NGB level, how much of their expenses go towards direct athlete support?
That depends on the individual NGB. According to a USOC AAC analysis of Summer Sport funding in 2011, the expenses earmarked for direct athlete support vs. the total USOC grant to the NGB are compared in the graph below:
(As a related side note, the AAC presented an independent finding on direct athlete support, and calculated that ~6% of the USOC’s expenses were for direct support of US athletes, although those calculations did not include the EAHI [health insurance] expenses.)
Most athlete stipends, which are reserved for only the top ranked athletes, are in the $400 to $2,000 per month range. Or $4,800 to $24,000 per year, which is below minimum wage for many considering how many hours go into training for the Olympics. And those are the fortunate ones to even receive stipends.
5) What about the Olympic Training Centers?
The Olympic Training Centers (OTCs) are an interesting case. Some would consider OTCs a form of direct support for US athletes. They are, after all, state of the art facilities where some US athletes live and train. With 3 OTCs nationwide (Lake Placid NY, Colorado Springs CO, and Chula Vista CA) they cost around $23 million per year – or roughly $100 million per quad – to operate.
However, according to the USOC AAC, only 13% of US Olympic Sports use the OTCs.
And of that 13%, only a small handful of those athletes get funded housing. Getting bed space at an OTC can prove an arduous task for an American athlete, especially since the USOC has made an effort to earn money from these world class training facilities by renting out beds and training time.
At an OTC, it’s common to see athletes from various other countries living and training there since they’re willing to pay, in some cases, over $100 per night per person. And the prospect of making money from an OTC is more attractive to bottom lines than funding a lower ranked US athlete.
Furthermore, with the recent effort to continue turning OTCs into revenue generating facilities, the USOC has started charging its lower ranked US athletes (i.e. – those who often need the most financial help) for access to the OTCs.
So for many American athletes, the OTCs are not a form of direct support. Instead they have become an additional form of out-of-pocket expense.
6) How about administrative expenses?
Administrative expenses cost about 12% of the total USOC expenses.
In other words, there were about a dozen USOC employees receiving over $1 million in compensation during the last quad alone, and that excludes any of the executive compensation within individual NGBs. (And remember that the USOC and the NGBs are considered charities.)
7) Are the USOC’s financial statements sound?
All indications are “Yes,” the USOC’s books are sound and clean. Deloitte audits the USOC’s financial statements, although there’s a clear moral hazard there since Deloitte is also a USOC sponsor. However, independent audits (by Grant Thornton) have also come to the conclusion that there are no irregularities in the USOC’s accounting practices.
The issue it seems is not that the USOC is cooking their books (a claim that might have been more difficult to make in prior quads); rather their operating practices still manage to keep athletes in severely disenfranchised states, often struggling to stay above the poverty line.
8) Don’t the medalists get huge bonuses if they win a medal?
The USOC grants bonuses of $25,000 for gold, $15,000 for silver, and $5,000 for bronze (The “Operation Gold” expenses in the direct athlete support calculations above). However, those bonuses are still taxed, and a gold medalist can expect to only net ~$16,000 from the years of effort that went into winning the medal.
Russia, another country that traditionally tallies a large number of medals at the Olympics, offered its athletes $100,000 for a gold medal during the Beijing Games, and other nations with smaller total medal counts have offered much larger bonuses for medal winners.
9) Well, the athlete would still have a gold medal, right?
Actually, the gold medals are over 90% silver, and are required to have only 6 grams of gold in them.
Even at over $1,100 an ounce for gold, the Vancouver Olympic Gold Medal (one of the largest and heaviest in history) would only be worth about $500 if smelted down. And an Olympic bronze medal might be worth a few Big Macs at McDonalds. (McDonalds, incidentally, is an Olympic “Top Sponsor” that spent an estimated $240,000,000 for sponsorship privilege in the past quad.)
Olympic medals are valued for their symbolism, and not their bullion price.
But since symbolism doesn’t pay the bills, some – like Mark Wells of 1980’s “Miracle On Ice” hockey team – have had to reluctantly part ways with their medals. Mark sold his gold medal to help pay for his medical bills.
10) Aren’t Olympians considered amateur athletes?
While once true, amateurism in the Olympics faded out in the 1970’s. The IOC eliminated amateurism in 1971, and the USOC phased it out in 1978.
The IOC and USOC recognized the fact that athletes were becoming increasingly competitive and needed to dedicate more time, money, and energy into their athletic endeavors. Removing the amateurism stipulations provided the opportunity for athletes to invest more into their training, and raised the level of competition for all.
In today’s highly competitive world, Olympic success is often a financial arms race to become the best you can be, and professionalism is a part of that. Just without the professional salary for most.
11) Well, aren’t Olympic athletes all millionaires from their sponsors?
A cute fantasy. Please read “The Intrinsic Value of Elite Athletes.”
Or the jobs that Olympians have held while competing, from nurse to janitor.
Or the actual costs of being an Olympic athlete; costs which are borne by the athletes and their families, and not the USOC.
12) Has the USOC always been so “Ebenezer Scrooge-ish” with its athletes?
10.3% direct athlete support, as small as it may seem, is actually a slight improvement from previous quads. Danika Holbrook (Princeton ’95, Olympian ’04) conducted research for USAT that showed that direct athlete support during the first quad after the turn of the century hovered between 6 and 9%.
The USOC has also become leaner, more transparent, and more efficient since those days as well. While it used to suffer from grossly excessive bureaucracy, a bloated board of directors, and a general lack of transparency, some progress has been made in recent years.
Many of those organizational problems still exist, which are likely a natural byproduct of being a monopolistic organization working in a competition-free environment. And there have also been a number of follies in recent years, including the embarrassing era in 2009-2010 when the USOC was paying 3 CEOs simultaneously (including Stephanie Streeter’s $1,006,336 compensation package for 10 months of work), and the revolt against USOC management led by a group of NGB executives.
Needless to say, improvements can still be made.
According to their Mission Statement, “The vision of the USOC is to enable America’s athletes to realize their Olympic and Paralympic dreams.”
It just seems ethically questionable that this charity’s mission allows for the exploitation of athletes’ labors to create such considerable wealth for so many executives and administrators while leaving such a difficult financial path for the athletes themselves.
Nathan Ikon Crumpton graduated cum laude from Princeton University, where he was a four-year Division I and All-Ivy track & field athlete. He is now an Olympic development athlete with the US Bobsled and Skeleton Federation. He also served in a volunteer capacity on the USOC-AAC’s Task Force on Governance and Resource Allocation. He can be contacted at email@example.com
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