Where all that Olympic money goes

Its members call it, with an almost religious conviction, “the Olympic Movement,” or “the Movement” for short, always capitalized.

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.

At the very bottom of “the Movement” — beneath the IOC members who travel first-class and get paid thousands of dollars just to attend the Olympics, beneath the executives who make hundreds of thousands to organize the Games, beneath the international sports federations, the national sport federations and the national Olympic committees and all of their employees — are the actual athletes whose moments of triumph and pain will flicker on television screens around the globe starting Friday.

When hundreds of millions of people gather around televisions Friday to watch the Opening Ceremonies of the Summer Games in Rio de Janeiro, they will be taking part in the economic engine that powers the Olympic Movement. Broadcast and sponsorship deals for the Summer and Winter Games deliver billions to the IOC and its affiliates every year.

But by the time that flood of cash flows through the Movement and reaches the athletes, barely a trickle remains, often a few thousand dollars at most. For members of Team USA — many of whom live meagerly off the largesse of friends and family, charity, and public assistance — the biggest tangible reward they’ll receive for making it to Rio will be two suitcases full of free Nike and Ralph Lauren clothing they are required to wear at all team events.

In the words of its charter, the Olympic Movement is devoted “to place sport at the service of the harmonious development of humankind, with a view to promoting a peaceful society.” To an increasingly vocal and active group of current and former Olympic athletes in the United States, however, the Movement is a vast, global bureaucracy that treats athletes like replaceable cogs, restricting their income without fear of reprisal from a workforce unable, or unwilling, to unionize.

“The athletes are the very bottom of a trickle-down system, and there’s just not much left for us,” said Cyrus Hostetler, 29, a Team USA javelin thrower and two-time Olympian who said the most he’s ever made in one year in his career, after expenses, is about $3,000. “They take care of themselves first, and us last.”

Ronda Rousey won a bronze medal in judo at the 2008 Olympics — and was living out of her car two years later. (Mike Hewitt/Getty Images)

Speedskater Emily Scott needed food stamps to get by as she trained for the 2014 Winter Games. (Bernat Armangue/AP)

This story is based on interviews with dozens of people familiar with the Olympic Movement — current and former athletes, executives and lawyers who have represented athletes — and a review of hundreds of pages of financial documents from organizations including the IOC, the U.S. Olympic Committee and several U.S. sport federations.

The picture that emerges is a multibillion-dollar entertainment industry whose entertainers are, in this country, often expected to raise their own income or live in poverty. 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. Even USOC officials concede that, with the exceptions of the handful of megastars such as Michael Phelps and Ryan Lochte who rake in big endorsement money and those who play sports with lucrative professional leagues, most U.S. Olympic athletes cannot earn enough from their sports to make a living.

(The IOC permitted professional athletes to compete in the Olympics starting in 1986.)

The stories of U.S. Olympians persisting despite paltry pay are common. Before finding fame and fortune as a UFC fighter, Ronda Rousey won a bronze medal in judo in 2008 — and said she was living out of her car a few months later. Speedskater Emily Scott said she needed food stamps to get by as she trained for the 2014 Winter Games in Sochi, Russia. Hostetler, who has been one of the best American javelin throwers for the past eight years, said he’s relied on both food stamps and unemployment benefits.

While many athletes struggle to pay their rent or buy groceries, the billions the Rio Games will generate will flow into the paychecks and extravagant perks enjoyed by IOC members, USOC staffers, and employees and volunteers with the hundreds of sports organizations that comprise “the Movement.”

From left, USA Swimming team director Frank Busch; USOC CEO Scott Blackmun; USA Swimming Exectuive Director Chuck Wielgus; IOC President Thomas Bach (Associated Press and European Pressphoto Agency photos)

USA Swimming Executive Director Chuck Wielgus makes $854,000, and national swim team director Frank Busch makes $346,000; their swimmers competing in Rio next month can make monthly stipends that cap at $42,000 per year. USA Triathlon CEO Rob Urbach makes $362,000 while Team USA triathletes compete for stipends that range from about $20,000 to $40,000 a year. The coach of the USA Rowing women’s team makes $237,000 while his rowers vie for stipends that max out at about $20,000 per year. (U.S. Olympic athletes are given an additional stipend if they win a gold, silver or bronze medal.)

“I’ve never thought it was fair,” said rower Caroline Lind, a two-time gold medalist who recently retired after a back injury. “We’re all replaceable. . . . There’s not really a concern for the individual athletes.”

The IOC declined to make anyone available for an interview for this story. USOC CEO Scott Blackmun, in a phone interview, defended how his organization has governed the Olympic system in the United States. Unlike national Olympic committees in many other countries, Blackmun noted, the USOC receives no government support to help it pay athletes.

“You have to look back at where the Olympic Movement came from. It was an amateur-based movement. Nobody got compensated,” said Blackmun, who made about $1 million in 2014, tax records show.

“It’s not a for-profit movement. Nobody in suits is getting paid for this beyond what you have to pay people to raise all the money we have to raise. . . . We are in good faith trying to maximize the level of support we can provide to our athletes. I wish we had the resources to support more athletes.”

Athletes arguing for change acknowledge that, even though billions flow into the Movement, there’s not enough money generated by the Olympics for everyone to get rich. Team USA’s 555 athletes will be among more than 10,200 competing in Rio.

“There are limited resources for sure. You don’t want to take so much money away from the USOC . . . that they can’t do their jobs,” said Eli Bremer, a former Olympic modern pentathlete who competed in the 2008 Summer Games. “But you don’t want them getting fat and happy while the athletes live in poverty. I believe there is a better balance.”

Also known as “the Olympic Capital,” Lausanne, Switzerland, offers beautiful vistas — and financial privacy. (Robert Schlesinger/AP Images)
They adorn themselves

The IOC and dozens of international sports federations are headquartered in Lausanne, Switzerland — also known as “the Olympic capital” — a city that offers beautiful mountain vistas in a country that has legally enshrined financial privacy protections.

Unlike in the States, nonprofits in Switzerland are not legally required to publicly disclose information about how they spend their money. At the bottom of most IOC news releases, a note explains that the organization sends more than 90 percent of its income down into the Movement, an average of $3.25 million, every day, “to help athletes and sports organizations at all levels around the world.”

An uncertain percentage of that money stays in Lausanne, though, or flows to organizations in other countries where nonprofits enjoy legally protected financial secrecy.

Neither FINA (swimming) nor FIG (gymnastics) — two of the largest international federations, both based in Lausanne — publicly release financial information. The IAAF (track and field), headquartered in Monaco, also does not disclose financial details.

“Whenever athletes complain . . . the IOC is famous for saying we give out 90 percent of our yearly revenues to support the athletes,” said Adam Nelson, an Olympic shot put thrower and gold medalist who has tried to unionize U.S. track and field athletes.

“While that may be true, they just pass a lot of it out to the federations. And there’s not a lot of transparency or accountability about how that money gets spent, used, and what makes it down to the athletes,” Nelson said.

Despite enjoying the same legal entitlement to secrecy, the IOC does publish occasional financial reports that include some details, such as expected annual revenue ($1.375 billion) and payroll ($62 million). Last year, as part of a move toward more transparency, the IOC published details about the perks packages it provides President Thomas Bach and the 115 elected IOC members, all of whom are considered “volunteers.”

For Bach, a former lawyer and Olympic fencer from Germany, the IOC provides an annual “allowance” of about 225,000 Euros ($251,000) and pays for his suite at the Lausanne Palace & Spa, “an exceptional place of refinement” that offers “a superb view across Lake Geneva to the Alps,” according to its website. It’s unclear which type of suite Bach stays in, or whether the IOC gets a discount, but the Palace recently priced its cheapest suite at $1,068 per night, or just shy of $390,000 for an entire year.

IOC members — a distinguished group that includes royalty (Prince Albert II of Monaco, Henri the Grand Duke of Luxembourg and Crown Prince Frederik of Denmark) and successful business executives (former Electronic Arts CEO Larry Probst) — also enjoy generous perks. When on IOC business, members fly first-class, stay in luxury hotels, and also get cash per diems: $450 per day for regular IOC members, $900 per day for the IOC’s executive committee.

These rates also apply to the Games themselves, which means in Rio, some IOC members will get paid more to watch the Olympics ($7,650, depending on travel schedules) than many Team USA athletes will get paid to compete in the Olympics. (USA Track and Field provides athletes $10,000 bonuses and USA Gymnastics awards $5,000 bonuses for making Team USA, but most other sport federations don’t. Athlete travel, lodging and food is covered by the USOC.)

Bob Balk is a former Paralympic canoe athlete who attended the 2012 London Games as an IOC volunteer and also received per diem money. In a recent phone interview, he recalled his amazement when he learned how much money he and other volunteers were getting to attend the Olympics.

Every morning, Balk recalled, a crowd of IOC members and volunteers gathered in a hotel room in London to collect their daily spending money.

IOC President Thomas Bach is considered a ‘volunteer’ but receives an annual ‘allowance’ of about $251,000. (Ivan Alvarado/Getty Images)

“They had a $100-bill-counting machine, and people were standing in line to get their stacks of hundred-dollar bills,” Balk said. “It was crazy.”

Balk, like other IOC members and volunteers, had his flight and hotel bills covered, a car service to get around London, and a bevy of free meals. When Balk got home, he still had $10,000 in per diem cash, he said, which he just deposited in the bank.

Andrew Zimbalist, an economics professor at Smith College who has researched the IOC, gave the nonprofit credit for not lavishing its top executives with massive salaries like the global soccer organization FIFA, but said that where the IOC spends excessively is on the perks.

IOC members, Zimbalist said, “adorn themselves by putting themselves in suites at the best hotels whenever they travel, always traveling first class wherever they go, and basically always having meetings, and always traveling first class as they criss-cross the world going to these meetings.”

According to the IOC, after taking its 10-percent cut for overhead, it divides the remaining 90 percent evenly among three major groups: the organizing committees for each Games, international sport federations, and then Olympic committees in each country.

Among all those organizations, only one gets a contractually locked-in percentage of the IOC’s broadcasting deal with NBC and its lucrative “The Olympic Partner,” or TOP, sponsorship program: the USOC.

Jesse Rodriguez, Shakur Stevenson and Charles Conwell work out at the U.S. Olympic Training Center in Colorado Springs. (Katherine Frey/The Washington Post)
‘We train here’

In late May, the USOC held a media event at its Olympic Training Center in Colorado Springs to show off how it helps U.S. Olympians prepare for the Rio Games. American flags hung from the rafters over an expansive weight room, and large signs in red, white and blue lined the indoor track, bearing the same message: “WE TRAIN HERE.”

With 140,000 square feet of training space spread across 35 acres, the Colorado Springs facility is the flagship training center for Team USA. The center boasts six full-time sport psychologists, five full-time dietitians, and sport-specific facilities for shooting, gymnastics, weightlifting, cycling and swimming, among others.

The media tour of the campus — led by Michael Cain, the center’s director of business development — emphasized how much the USOC provides to Olympic athletes, free of charge.

“It’s important to note: No member of Team USA pays his or her own way,” Cain said.

The center has dormitory-style housing for about 525, Cain said, and it costs the USOC about $42,000 per year for an athlete to stay there. For the USOC, its three training centers — including others in suburban San Diego and Lake Placid, N.Y. — are among its biggest annual expenses, costing about $28 million.

There is one noteworthy fact that neither Cain nor any of the other staffers leading tours mentioned that day: Not many members of Team USA actually train there. In 2012, a study by the Athletes’ Advisory Council — a group of current and former athletes — found that just 13 percent of Olympic Training Center usage went to U.S. Olympians. The training centers’ biggest clients were aspiring Olympians and foreign athletes, many of whom pay their own way.

USOC CEO Blackmun said the figure sounded accurate, and the USOC is reviewing how much it spends on its training centers.

“If you look at our athletes who win medals, and their lead-in to the Games, and where they train . . . there’s not as direct a relationship between our medals and maintenance of our training centers as you’d expect,” Blackmun said.

In major American sports leagues — such as the NFL, Major League Baseball and the NBA — management typically shares about 50 percent of the revenue with the athletes. In promotional materials, the USOC advertises that more than 90 percent of its spending goes to “areas that support U.S. Olympic and Paralympic athletes.” That same 2012 study by former athletes found that just 6 percent of USOC spending actually goes to athletes as cash payments.

“I was pretty shocked and disappointed, but I knew how the system worked,” said Ben Barger, an Olympic sailor who led the study. “The money goes to executives first, then administrators, then coaches, and then athletes.”

The reason there’s a large disparity between what the USOC says it spends on “areas that support athletes” and what the USOC actually pays athletes, Blackmun explained, is because the USOC includes the salaries of many of its employees who work with athletes or raise money for the organization in the larger figure.

Since 2009, tax records show, the USOC’s payroll has expanded from $39 milllion to $49 million, and the number of USOC employees making $100,000 or more has nearly doubled, rising from 66 to 121. The USOC’s total headcount has remained mostly stable over the time period, records show. Blackmun is just paying his employees more.

That increase in payroll, Blackmun said, is largely because of new business development and fundraising staffers who more than pay for their salaries with the money they raise. Since 2009, according to USOC analysis, its fundraising has gone up nearly 200 percent, compared with a 40 percent payroll increase.

The USA Cycling women's team pursuit training at the 7-Eleven Velodrome in Colorado Springs. (Casey B. Gibson/Sipa USA)

“An investment in your development program or in your sponsorship programs is an investment in athletes, because that’s what provides the resources for them,” Blackmun said. “I need the best sponsorship people and the best philanthropic people, and that’s why some of our people are getting paid at levels that I think some of our athletes are not comfortable with.”

Nick Symmonds, a two-time Olympic middle distance runner and an outspoken critic of the USOC and USA Track and Field, strongly disagrees with that reasoning. “It’s absolutely offensive that they think we’re stupid enough to consider that athlete support,” Symmonds said. “True athlete support is money going into athletes’ pockets.”

While USOC employees’ paychecks have grown over the years, the bonuses the USOC pays to Olympic medalists through a program called “Operation Gold” have remained stagnant since 2002: $25,000 for gold, $15,000 for silver, and $10,000 for bronze.

In an interview, USOC chief of sport performance Alan Ashley, who makes about $460,000, said he believes bonuses for medalists is “paying for past performance,” and not likely to result in Team USA winning more medals. The over-riding mission of the USOC is winning the most medals possible; when Blackmun discussed how his organization decides which sports and athletes deserve money, he used the phrase “podium potential.”

Unlikely resistance

To athletes good enough to be the best in the United States at sports dominated by other countries, though, the focus on podium potential can make them feel undesired in a community they’ve effectively taken a vow of poverty to join.

Javelin thrower Cyrus Hostetler competed in London and is headed to Rio, but says, ‘If I could do it all over again, I probably wouldn’t do this.’ (Matt Slocum/AP)

Cyrus Hostetler made Team USA as a javelin thrower for the 2012 London Games, and placed 32nd. As a returning Olympian, he expected the USOC or USA Track and Field would make more resources available to help him improve for Rio. He experienced something different.

In late 2015, USA Track and Field Director of Sport Performance Peter “Duffy” Mahoney told Hostetler in an email that, after consulting with USOC staff, he had decided “you do not exhibit sufficient finalist or medalist potential.” Hostetler, 29, was living in a dormitory-style room at the USOC training center in California at the time, training every day with other javelin throwers. (There is no Team USA or USA Track and Field javelin coach; the throwers basically train themselves.)

Mahoney — who makes $152,000 — informed Hostetler that USA Track and Field was cancelling funding for his bed, food and treatment at the center. If Hostetler wanted to stay, he’d have to pay: $200 a month to train, $10 per meal, $43 per hour for massage therapy, and $100 per hour for medical treatment.

“He basically was telling me, ‘I don’t believe in you, I don’t think you’re worth my money, so I want you to pay me instead.’ It felt like he was milking me for all I was worth,” Hostetler said in a phone interview.

Angry but undeterred, Hostetler moved into cheap housing nearby provided by a former Norwegian competitor and kept showing up at the center every day to train. He stopped eating there, or getting medical or therapeutic treatment.

A few months later, Hostetler got a call from a training center employee, who told him he owed several hundred dollars for training fees. Hostetler ignored it.

“I said I’m just going to wait until someone forces me to pay . . . I would have loved to have seen USA Track and Field send me to collections,” Hostetler said.

At this month’s Olympic trials, Hostetler rebounded from a slow start to hurl a javelin 273 feet 1 inch, winning the national title and a spot on Team USA.

The experience with USA Track and Field has left Hostetler bitter about how his Olympic career will end. He’s a long shot to medal, but he knows even if he does, the moment will be tainted.

Mahoney will “have paid me nothing, and I’ll have just won a medal he can take credit for,” Hostetler said.

After the Games, Hostetler plans to take some time off, during which he’ll try to figure out what do with the rest of his life.

“I could go work for USA Track and Field and do less than I do now and make more money. I could flip burgers and make more money than I do now,” Hostetler said. “If I could do it all over again, I probably wouldn’t do this.”

In an email, spokeswoman Jill Geer said USA Track and Field dropped Hostetler from its training program because he did not meet competitive standards last year. “Cyrus had a great performance at the Olympic Trials and we are pleased to have him on the team in Rio,” Geer wrote.

The big event down south

The last level of the Movement that separates athletes competing in the Olympics from the money companies pay to be associated with the event are the national governing bodies, or NGBs, for each Olympic sport in the United States — 47 organizations that compete for USOC money while also trying to raise money on their own.

These NGBs range from large organizations with sizeable sponsorship deals and well-paid executives (USA Track and Field made $22 million in 2014 and paid CEO Max Siegel $1.1 million) to small organizations in niche sports (US Rowing earned $7.5 million in 2014; CEO Glenn Merry made $168,000).

USA Track and Field has been among the most aggressive NGBs in recent years at increasing the amount of money it pays athletes. A new system enacted last year ensures baseline pay of about $45,000 for an athlete who wins a national title and competes on Team USA, and other performance bonuses can drive pay past $100,000.

That increase in paying athletes has come at the same time USA Track and Field has significantly increased how much it spends on its own employees. From 2008 to 2014, records show, USA Track and Field’s payroll has more than doubled, from $2.9 million to $5.9 million, as the organization’s workforce has grown from 47 to 70.

For CEO Siegel, 2014 was particularly lucrative — thanks to a $500,000 bonus, his income jumped about 60 percent.

In a phone interview, Steve Miller, board chairman of USA Track and Field, said Siegel more than earned his pay by expanding the organization’s revenue, most prominently through a new sponsorship deal with Nike worth a reported $500 million that starts next year and runs through 2040.

“What he has accomplished has been nothing short of incredible,” Miller said. “He could do a lot better on the open market.”

While Miller is ecstatic about that new Nike deal — “I think it’s spectacular,” he said — some runners are concerned it will make it even more difficult for track athletes to land individual endorsement deals.

In 2014, a running website published an April Fool’s spoof announcing that USA Track and Field had become a division of Nike. There’s an element of truth underlining the joke. USA Track and Field draws roughly half its overall revenue every year from its current deal with Nike (worth a reported $10 million anually), and the company’s stake in USA Track and Field will only increase next year when the new deal (worth a reported $20 million annually) starts.

Nike also sponsors the USOC, which means the corporate behemoth has a stranglehold on the two most-watched events in track and field: the U.S. Olympic trials and the Olympics. Nike’s competitors must accept the fact that, if they endorse runners, they’ll be spending money on athletes who, at the U.S. Olympic trials, will be televised running around a stadium lined with Swooshes, and then at the Olympics will wear Nike jerseys as they run and, if they win medals, Nike sweatsuits on the podium.

Some runners have expressed concern that Nike’s dominance is scaring away competition.

“Other brands aren’t going to have exposure on the biggest stages, so why would they invest?” said Lauren Fleshman, a former Nike runner. “Even Nike athletes are going to be affected, because the marketplace is less competitive, so Nike won’t have to pay as much.”

At last month’s track and field trials in Eugene, Ore., a situation involving Fleshman’s new sponsor — Oiselle, a women’s athletic apparel company — demonstrated these concerns.

Oiselle CEO Sally Bergesen, left, said the USOC and USATF ‘say that they give athletes the opportunity to make a living through endorsements, but they also structure that opportunity in such a way that it severely devalues them.’ (Brian Ach/Getty Images for Nolcha Fashion Week)

Oiselle CEO Sally Bergesen attended the trials to root on 14 of her athletes, including middle-distance runner Kate Grace. When Grace pulled off a surprise win in the women’s 800-meter final, Oiselle posted celebratory notes on Twitter, Facebook and Instagram.

The next day, Oiselle got an email from a USOC lawyer, demanding the company delete the social-media posts. If Oiselle wanted to celebrate Grace’s achievement, the USOC said, the company needed to avoid a long list of trademarked words and phrases, including “Olympic,” “Team USA” and “Road to Rio.” Any pictures of Grace running at the trials or celebrating would have to be censored, because the Oiselle racing top she wore at the trials also had a USOC “Road to Rio” logo with the Olympic rings.

Oiselle deleted the posts and replaced them with notes that referred, vaguely, to Grace’s upcoming appearance in “the Big Event in the Southern Hemisphere.” Photos of Grace’s winning run were re-posted with black boxes censoring trademarked images on Grace or in the background.

In an interview, Bergesen estimated that Oiselle had spent about $300,000 endorsing Grace over the past four years, a figure that included salary, travel, and gear. In that same time period, the USOC and USA Track and Field had spent about $10,000 on Grace, Bergesen estimated. Nike hasn’t paid Grace anything. (Grace declined an interview request but confirmed the estimates.)

The USOC and USA Track and Field “say that they give athletes the opportunity to make a living through endorsements, but they also structure that opportunity in such a way that it severely devalues them,” Bergesen said. “They’re basically saying, knock ’em dead, go get sponsors, and then they say, simultaneously, once you get to the Olympic trials and the Olympics, those sponsors you’ve gotten no longer have any visibility.”

Exclusive sponsorship deals with companies such as Nike, Blackmun said, are vital to funding the USOC.

“What our sponsors are most interested in is exclusivity. . . . We generate about $100 million a year in sponsorship revenue. We wouldn’t be able to get that revenue unless we could make a promise of exclusivity,” Blackmun said. “If someone can make a credible case that our athletes who are medal-capable will receive more support under a different model . . . we would be very willing to look at that.”

Bergesen has suggested allowing Olympic athletes the right to put their individual sponsors on their race uniforms, along with the Swoosh. USA Track and Field board chairman Steve Miller believes the exclusive Nike deal will guarantee a better base salary for more track and field athletes than any alternative.

“If Nike got out of track and field, I don’t know who or what would replace them and their money,” Miller said.

At smaller U.S. sport federations, athletes are less concerned with the sway held by sponsors, and more bothered by the power held by coaches and executives.

At US Rowing, based in Princeton, N.J., women’s head coach Tom Terhaar has major input on who makes the Olympic team and how much they get paid. Terhaar is US Rowing’s highest-paid employee, at $237,000. Men’s coach Luke McGee makes $197,000. Their rowers compete for stipends that range from $500 to $1,700 per month.

Caroline Lind won two gold medals for Terhaar, at the 2008 and 2012 Games. Her average annual income, Lind said, has been about $12,000, so she’s relied on her parents for financial support. In 2015, Lind had surgery on a herniated disc she developed after years of intense training. She asked Terhaar for a reduced schedule while she recovered. Terhaar refused, and when Lind started to feel twinges in her back as she returned to rowing, she decided to retire.

In an email, Terhaar said this was not true. He said he had approved a reduced training schedule, but wouldn’t allow Lind an easier path to making Team USA. Lind was “not competitive or not healthy at the time of trials,” Terhaar wrote.

After years of babysitting and doing other odd jobs so she could train, Lind — a 33-year-old Princeton graduate — is looking for a full-time job for the first time in years. Other rowers are upset over the massive pay gap between coaches and athletes, Lind said, but “the national team isn’t really a place where athletes can have a voice.”

“If Tom is making the ultimate decision on who’s [on Team USA] . . . you’re not going to go up and complain about his salary and your salary,” Lind said. “People are afraid.”

Merry, the US Rowing CEO, said concerns about athlete pay “keep him up at night,” but he defended the disparity between what he pays his coaches and his rowers as the best use of limited resources to try to win the most medals possible.

“Athlete support is super-important, but the quality of coaches, without that, there are no medals,” Merry said. “What a coach does is not the same as an athlete. It’s not apples to apples. An athlete is pursuing a dream.”