Mama, don’t let your babies grow up to be Olympians.
It may not have the ring of the original Willie Nelson/Waylon Jennings song title, but it certainly applies – considering some of the financial back-stories at the London Olympics. Think about U.S. swimmer Ryan Lochte, whose divorced parents are facing the foreclosure of their Florida home. Or U.S. gymnast Gabby Douglas, whose mother filed for bankruptcy earlier this year. One of four children, Douglas all but acknowledged earlier this week how her budding Olympic career took an economic toll. “It was definitely hard on my mom, taking care of me and my siblings,” she told the New York Post.
Indeed, experts say raising an Olympian — or seeking Olympic glory on one’s own — is an extremely pricey proposition, especially when measured over the period of years it takes to get to and then compete at the games. At best, say athletes and others connected to the Olympics, it’s easily a six-figure “investment” – with no guarantee of a “return” (meaning a medal or an endorsement deal) – when factoring in the costs of equipment, coaching and travel.
Making the situation all the more difficult for U.S. athletes: there’s no direct federal support, as is the case in most other nations. Instead, top-tier competitors can only hope to receive small stipends – often as little as $400 a month — to cover expenses, with the money generally coming from the privately funded governing boards of their sports or through sponsorships. And those who are just starting their Olympic careers can’t even be guaranteed that level of assistance, so they often take on whatever low-wage jobs they can find or rely upon the Bank of Mom and Dad.
“Thank God my parents really liked me,” says former U.S. speed skater Eric Flaim, a two-time Olympic silver medalist who’s now a financial adviser with Ameriprise in Portsmouth, N.H. Flaim’s estimate of what his Olympic run cost over a decade-plus of training and active competing? At least $250,000.
Like many Olympians, Flaim describes plenty of tough times, when he and his parents faced having to pay for big-ticket items (say, a pair of custom-molded boots for $1,500) or ongoing expenses (private coaching could run up to five grand annually). To make ends meet, Flaim often worked in gyms, cleaning lockers after patrons departed. Even with a medal around his neck – he won his first at the 1988 winter games in Calgary — life didn’t become particularly easy. Flaim says in his best years as an athlete, he might have earned $75,000 from prizes, honorarium and sponsorships. “It was not million-dollar money,” he adds.
But at least he made money. Athletes who aren’t seen as strong medal contenders are less likely to receive significant support from their sponsors, let alone their sport’s governing board. And if they’re competing in a less-heralded sport, the problems are compounded. For Rick Hawn, a U.S. judo competitor at the 2004 Olympics in Athens who also tried out for the 2008 games, it all added up to a significant tab during his Olympic career. “My parents nearly went bankrupt. They put whatever they could into me and I’m the oldest of six kids,” says Hawn, who now competes on the Bellator mixed martial arts tournament circuit.
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Given those horror stories, it’s perhaps no surprise that lawmakers have recently started to talk about tax relief for Olympic athletes – or at least for those athletes who are fortunate enough to win medals. (The honors come with cash prizes awarded by the United States Olympic Committee: $25,000 for gold, $15,000 for silver and $10,000 for bronze.)
But this is hardly enough to make a real difference when it comes to the personal finances of Olympic athletes, most competitors and Olympic observers say. And it certainly doesn’t compensate for what some see as the biggest hidden cost of all faced by members of Team USA: the years spent not earning a true wage. Typically, Olympians don’t get a start on a real professional career until their late 20s or early 30s, says Scott Minto, director of the sports business MBA program at San Diego State University. “It’s a lost opportunity for a talented person,” he says.