By Niovie Constantinou, Associate Lawyer, Ioannides Demetriou LLC, Nicosia, Cyprus
Olympic athletes impress sports fans all over the world. But the reality is that many of them often find themselves struggling financially, as well as emotionally and physically, before, during and after their Olympic journey.
Many of the Olympic sports only come into the spotlight every four years and only a handful of the thousands of athletes competing in the Olympics will return home with medals. Even fewer will be financially rewarded for the tremendous investment they have had to make to reach the Olympics. Indeed, many Olympic athletes have used online crowdfunding in the run-up to the event in order to pay for expenses, such as new equipment, and so on. Some have even applied for food stamps!
As prestigious as it is winning a medal, it does not always come with a cash prize, or at least a generous one. The U.S. Olympic Committee awards $25,000 for gold medals; $15,000 for silver; and $10,000 for bronze. Medal winners should expect to lose as much as 39% of that in taxes and many of them may end up having financial difficulties after a while.
Ronda Rousey, for example, who, months after winning the bronze medal in judo in Beijing in 2008, was unable to afford to pay rent and was living in her car!
Of course, athletes, who compete in high-profile sports, have the opportunity to earn sponsorship revenue, if they perform well, and, even then, an injury or poor performance can dramatically affect their pay.
But this also comes with a caveat: under The International Olympic Committee (IOC) Rules, athletes, backed by non-official Olympic sponsors, may only be part of generic advertising that does not explicitly mention the games or use any of the event’s intellectual property. Terms such as “Olympics”, “games” and “gold” are off limits.
Seeing the many financial problems that Olympic athletes may face, it is imperative that they educate themselves – sooner rather than later – on how to make money smart decisions and handle their finances. In the Rio Olympics, the credit card company VISA, in partnership with the IOC, launched a global financial education program to help participants take control of their financial futures. The program included an introduction to:
- setting budgets;
- money management; and
- bank services.
Athletes should ensure that they not only become educated in financial matters, but also that they apply that knowledge to their own individual circumstances.
For example, snowboarder Jonathan Cheever supports his athletic career by working as a licensed plumber!
Olympic athletes may also face mental and physical struggles.
This is because they challenge themselves to perform to their maximum, which may lead to heightened levels of frustration, anxiety, and stress; or may even end in burnout if the expected level of athletic achievement is not reached. This impact on their mental health may be accompanied by a physical overload or overtraining. Athletes’ intense and almost exclusive focus on their sports career may also impact their social network, as the amount of interactions with their friends, families and significant others may decrease, leading to feelings of isolation.
The best thing an athlete can do is to acknowledge the many hurdles of competing in the Olympics and manage expectations before they compete, by:
- having a financial plan in place so that they can afford their participation in the Olympics, as well as any setbacks such as poor performance or injury;
- having a trade to fall back on by simultaneously pursuing alternative career routes;
- building a life outside their sport, actively working on other areas of their life: hobbies, friends, family and education; and
- ensuring that they have the psychological support that they need at all times.
The chase for Olympic glory comes with a price to pay and may end up with a prize.
But, while keeping their eyes on the prize, Olympic athletes should also consider what we have discussed above and have a plan in place to make the Olympic journey worthwhile and the transition to life after the Olympics a smooth one.
Help is at hand. The Money Smart Athlete Team at APC Sports Consulting can offer appropriate guidance and support to those in pursuit of the Olympic dream.
As mentioned, sporting glory always comes at a price!
Further information: www.apc-sport.com