WSJ Your Money Briefing - Going for Gold: The Financial Hurdles Facing Olympic Athletes

Episode Date: August 11, 2024

Winning an Olympic medal doesn’t necessarily translate to financial success for many athletes. Host J.R. Whalen speaks with WSJ personal finance reporter Joe Pinsker as well as Olympians Dan Walsh and Lauryn Williams, who discuss the financial challenges they faced and overcame in the years following competition. Sign up for the WSJ's free Markets A.M. newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Shop Best Buy's Ultimate Smartphone Sale today! Get a Best Buy gift card of up to $200 on select phone activations with major carriers. Visit your nearest Best Buy store today. Terms and conditions apply. For the past two weeks, teams across the globe have been breaking records, all with the hopes of grabbing a spot on that podium and winning a medal for their country. But for most athletes, the road to the Olympics isn't cheap. A recent report on elite American athletes found that they were, on average, poorer for having competed, paying a net cost of about $12,000 per year

after all the expenses and fees involved with their sport. So how do they make ends meet? Here's a special episode of Your Money Briefing for Sunday, August 11th. I'm J.R. Whelan for The Wall Street Journal. Today we're taking a look at the cost of training and competing at the Olympics. It's not all fame and glory. We'll hear from two medal holders about their financial journeys. Ahead of that, let's check in with my colleague Joe Pinsker. He recently wrote a piece about the hefty price that comes with an athlete's Olympic journey. So Joe, you and your colleague Callum Borsher spoke to a handful of athletes for this story. Between training, traveling, and competing, what are some of the big expenses for

Olympic athletes? They need to get to a competition. They need to have lodging when they're there. They need to buy food. Sometimes these are covered by their teams, but sometimes they're putting up the expenses themselves. A little bit less intuitive or obvious is the cluster of other expenses that fall somewhere between athletic and everyday. People are buying groceries, just like the rest of us, but in some cases they need to eat 10,000 calories a day, and that's how many groceries they need to buy. Your reporting is interesting because people probably assume

that many of these athletes are doing really well financially. But is that not really the case? Yeah, there are some big name athletes who have a lot of money in the Olympics. But in fact, those high profile athletes are kind of the outliers here. And there's a whole group of people who going to the Olympics can be some sort of financial sacrifice, whether that means going into debt as they're trying to get there or putting their career on hold. There are all sorts of ways that it can be tough for the rest of the athletes that you'd see competing. Where do some athletes get the financial support for all these expenses? you'd see competing. Where do some athletes get the financial support for all these expenses? So many of them get a monthly stipend from the U.S. Olympic and Paralympic Committee or the group that governs their individual sport. That's typically not enough to live off of,

but many athletes also get sponsorships and can get a good amount of money from that. If those things don't come together, though, athletes who are in the Olympics or even especially those who are trying to get there, they have to look for other ways. Most often they are cobbling together a living in the time that they have around their training schedule. There are ways that people have to get creative with their money and time to make it happen if they don't have a big endorsement deal. And if they're talented and lucky enough to win a medal, the medals themselves can come with cash prizes, right? It varies from country to country.

The U.S. Olympic and Paralympic Committee pays $37,500 for gold medals and $22,500 for silver medals and $15,000 for bronze medals. So it's not insignificant. It's maybe not going to completely undo all the other financial strains, but it certainly is a big help to a lot of people. So how do these athletes make it work? We'll hear from them after the break. Summer is like a cocktail. It has to be mixed just right. Start with a handful of great friends. Now add your favorite music.

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Copyright 2024. Bacardi, its trade dress and the bat device are trademarks of Bacardi and Company Limited. Rum 40% alcohol by volume. Dan Walsh started rowing when he was about 10 years old. He said it completely changed his life and led him to a full ride in college and an Olympic bronze medal on the U.S. rowing team. It also put him in a tough financial situation for decades. And he joins me now. Dan, thank you for being here.

Thank you, JR. How did you finance this career? Did not finance, scraped. Everything from working in a restaurant as a busboy leading my way up to cook, managing a deli, an ice cream shop, being a mover. And the hard part, especially when I went into 2012, which was my third Olympics, was everyone makes this assumption that, oh, you're now a two-time Olympian. You now have an Olympic medal. You must be all set. And that's actually when it was the worst financially. The 2008 recession had hit. We had moved the training center out to San Diego, California,

which was expensive. I started doing private security at a hotel. So I was a bouncer. And that was when it got really rough because I would go from training three times a day, teaching a class at the gym, and then sitting there breaking up fights till 4 a.m. Talk to us about your personal financial situation. And when you were trying to sustain this athletic career, did you go into debt? Absolutely. Every cycle I went into debt, we were responsible for all of our own food when training at the training center. And rowers, we eat a lot.

We're all big. It's a very high caloric demand. Anywhere from, depending on what your own metabolic rate is, you could be eating 6,000 to 10,000 calories a day. And if you're trying to win the Olympics, you don't want to just necessarily do it with Doritos and slushies. You want to eat healthy food.

So all cash had to go to the things that needed cash. And all luxury, i.e. food, had to go on credit card. This sounds like a lot of debt that many Americans experience. But this kind of debt riding on an athletic career, how did you get out of it? With that credit card debt, I try to balance it. You get a chunk of money for the better you perform at your world championships. And I was like, okay, I can let this debt creep up to that amount and that amount only. And then it stops. And so luckily, we got the medal, we got the money, and I was able to then stop paying

the minimum on that credit card and pay that credit card off. And then it was really about managing the budget and trying to save. So instead of having my own room, I lived with one of my roommates, buying a used car. And if it breaks down, we luckily rowers are generally a smart group. So a lot of guys have engineering degrees, we would fix all of our own cars. So anytime something catastrophic happened, it was going on debt. I got cut in 2012 because I got so sick that I finally, my body couldn't do it anymore, which is fine. Luckily, I wound up getting a coaching job at Northeastern University, and I had to consolidate

about $55,000 of debt into a credit union. Truthfully, with the ups and downs of life since that moment, and debt can be so overpowering, I technically just paid off my truck last month, and that's the first time I've been more or less other than our home debt-free since 2010. While some athletes have worked their way out of debt bit by bit, others, like Lauren Williams, turned to financial guidance when managing their career. Lauren sprinted her way to a gold medal in the women's 4x100 meter relay at the London 2012 Games, and won silver at the two-women bobsled event in the 2014 Winter Games in Sochi, Russia, making her one of the few athletes to have appeared on the podium at both events.

She joins me now. Lauren, thank you for being with us. Thanks so much for having me on the show today. In addition to the medals you won, you also picked up several commercial endorsements. How did they help you? The endorsement opportunities were, I'd say, pretty good. That was sponsored by Johnson & Johnson and Bank of America. In the 2004 season, there were some other small sponsors that came along the way. But the main way that we made money as track and field athletes was from a shoe sponsor. So from 2004 to 2009, my sponsor was Nike. And then from 2009 to 2013, I was sponsored by Saucony. Can you tell us the kind of money that

was involved in both of those endorsements? Yeah. So in Nike, it was around $200,000 a year to start. And then with track and field contracts, the way that it works is that there's various bonuses and incentives built into your contract. So, for example, if you earn a medal, you could get an increase in your annual salary for the remainder of your contract, but you could also get a bonus for that medal. When you signed the deal with Nike, what was your initial reaction to that amount of money? I was through the moon. I was super excited. Like I said, a junior in college was like, I am filthy rich. You feel like the sky's the limit. And I come from a family that didn't have high earnings. So there just wasn't a lot of money to go around within the family. So I felt like I'd really made it. Little did I know, though, that your agent takes 20% of your earnings. And then above and beyond that, there is taxes, good old-fashioned taxes. It was a crash course in life where mistakes were made. Lots of mistakes were made along the way. I had very little personal finance knowledge at that time.

Tell us about your career since you competed in the Olympics. Upon retiring from the Olympics, I decided to go into the field of finance. So I'm a certified financial planner, and I run my own company called Worth Winning, helping people organize their finances. And a big part of that, as I got started initially, was helping athletes organize their finances. Generally, people that are in Olympic sports are not going to earn enough to be able to just retire, kick their feet up, and never work again. That's going to be the 1% of the people competing are in Olympic sports are not going to earn enough to be able to just retire, kick their feet up and never work again. That's going to be the 1% of the people competing in the Olympic Games.

You don't get to say, OK, I won a gold medal and I never have to do anything again. I think people will be surprised to know that there are a lot of Olympic gold medalists in America that still have regular jobs or go back to their regular jobs after the games are over. What other kinds of challenges do athletes face? You know, you mentioned taxes, lack of financial literacy, and prize money is not going to last forever. What else do you run into with athletes? What is everyone's American dream still to this day? They want to buy a home. Well, what do you need for a home? You need a down payment. We got really high interest rates right now. And so they take a big lump sum of money, they put it toward a down payment on a home, and now they got to figure out how to cover that mortgage for the next 30 years. But they don't have a athletic career that's set out for 30 years. So if you're going to compete for maybe

five or seven years, even if you're fortunate enough that your earnings never change, you can cover that mortgage for five to seven years. But now you've missed out on five to seven years of work experience. So you go and you get a job after sport and it's not earning as much as you were. And now you're having a hard time covering the mortgage for the house that you thought you could pay for because you weren't thinking 30 years down the road. So some athletes could be lucky enough to have an income generated from their performance over the course of a couple of years. But how do you help them to manage the expenses of being an athlete? couple of years. But how do you help them to manage the expenses of being an athlete? I train my athletes to treat themselves like a business. So they're going to have a business account. The money is going to come in separately to that business account. And the business expenses are going to come out of that business account as well. And then you're going to pay yourself a salary. In order to manage the expenses, we also have to kind of plan ahead for the things

that you wouldn't see coming. And athletes have a hard time doing that. Like I said, in the moment when they're doing really great and their income is really high and they're reaching out to a financial advisor, it's because they feel invincible. But I'm like, hey, what happens if we're injured? What happens if you don't ever get to compete again? And so what does that look like? What does it look like to have enough set aside to be able to cover those expenses? Those are the things I'm talking to athletes about. That was Olympic athletes Lauren Williams and Dan Walsh. And that's it for your Money Briefing. This episode was produced by Ariana Osborne with supervising producer Melanie Roy and deputy editor Chris Zinsley.

Additional support from Zoe Culkin. Mixing by Jessica Fenton. I'm J.R. Whelan for The Wall Street Journal. Thanks for listening.