🥇 The Broken Business Model of the Olympics Part 2

Welcome to Part 2 of the two-week newsletter series on the broken business model of the Olympics.

If you are new here, welcome to community. Last week we started this journey with a detailed article on why host nations are deciding to avoid bidding to stage the games.

This week, we focus on the athletes themselves.

11,215 athletes will head to Paris for the Olympic Games starting this Friday. How much do they get paid for their efforts?

Today we explore.

To start we have to understand how much the International Olympic Committee (IOC) makes in revenue.

The IOC views their revenue in four year chunks called Olympiads. These are the 4 years between each edition of the Games’. This graph shows the revenues across the last 5 cycles.

So how much do the athletes get?

A report by Global Athlete in partnership with Ryerson University and the Ted Rogers School of Management found that athletes only receive 4.1% funding directly from the Olympic Movement revenues through scholarships, grants, and awards for successful competition, numbers which athletes cannot negotiate.

Of the 4.1% the IOC only provides 0.5% directly to athletes.

How crazy is that?

Historically you do not get paid by the IOC if you win a gold medal at the Olympics.

Any prize money is distributed by the nation you perform for. For example U.S. gold medalists each received $37,500 from the U.S. Olympic and Paralympic Committee (USOPC) at the Tokyo Olympics. Athletes earned $22,500 for silver medals and $15,000 for bronze. Athletes then had to pay tax on this income before the USOPC removed that ruling in the most recent Games.

By contrast:

• 🇨🇦 Canadian Gold Medallists receive: $16,000

• 🇯🇵 Japanese Gold Medallists receive: $45,000

• 🇮🇹 Italian Gold Medallists receive: $232,000

• 🇸🇬 Singaporean Gold Medallists receive: $734,890 ($1 million Singapore Dollars)

Simone Biles, Usain Bolt, Michael Phelps. For all their achievements the large majority of the money they generated came from sponsors.

But thats at the top end. Many Olympians are struggling and the following statistics are both alarming and somewhat scary:

• More than 90 percent of all Olympians reported spending as much as $21,700 in competition fees and membership dues in the lead-up to the games.

• More than a quarter of all US Olympians report making less than $15,000 annually in total income

• Olympian athletes reported spending as much as $9,200 for out-of-pocket expenses amid injuries. As little as 16 percent were reimbursed

If there is anything more telling about the lack of resources for Olympic athletes is the record number of Olympians starting their own GoFundMe pages to crowdfund their efforts this summer.

Take Kanak Jha here, the #1 Ping Pong player in the States. His GoFundMe page reads the following:

The biggest hurdle I face is related to expenses since it‘s an enormous financial burden for me to maintain a sustainable professional career that adequately covers cost for training, living abroad, international competitions, travel, accommodation and most importantly having a private coach in daily training and in the various WTT events which could make a significant difference in the outcomes for matches at the highest level.

I still urgently need additional support as it is impossible for me in my current situation to achieve my goals and to chase my dream of success in Paris. 

This is the best table-tennis player in the US and he is begging strangers on the internet to help his case for gold this year.

It’s sad and particularly alarming when you can see how much money the IOC generate from the Games every four years.

Usain Bolt carried so much appeal, so much fanfare and so much broadcast interest in the three Olympic cycles where he was on top. Unless he was paid under the table he did not get a single penny from the IOC.

Simone Biles is the exact same. The most decorated gymnast of all time but paid by her sponsors, not the IOC.

Many have proposed the IOC taking some of the billions they receive in revenue to create a stipend pool for athletes. If they gave $10,000 to every Olympian athlete it would “only” cost the, $112m. On revenues of several billions that doesn’t seem that much.

I love the Olympics, I will watch most events this summer. But they have a delivery problem. and if they dont innovate it will hurt them.

World Athletics have now said that they will pay $50k for all gold medalists at Paris.

If you’d like to support Kanak you can here.

If you’d like to see this in video form, please do so here:

See you next week.