For most of the 554 U.S. athletes who competed in Rio de Janeiro, Sunday's Closing Ceremonies marked the beginning of a rough transition back to life outside the warmth of the Olympic spotlight.
The massive disparity between how well U.S. Olympic executives pay themselves and how little they pay their athletes likely won’t change soon, at least in part because the organization entrusted by federal law to fight for Olympic athletes’ rights has no interest in doing anything about it.
There is no union for Olympic athletes, but there is an organization that is supposed to protect their rights: the Athletes’ Advisory Council, or AAC, a volunteer group comprising 61 active and retired athletes, representing all Olympic sports.
Created in the 1970s, the AAC works “to communicate the interests and protect the rights of athletes,” according to its mission. But when it comes to the most important issue for many elite athletes — pay — the AAC is fundamentally unable to aggressively advocate for more money for athletes , according to interviews with more than a dozen current and former AAC members and other athletes and lawyers who’ve worked with the organization.
The AAC is often filled with athletes uninterested — or unwilling — to engage in the confrontational tactics that are routine for regular union representatives, former members said. The volunteer organization is also rife with conflicts of interest, as it draws its travel funding from the U.S. Olympic Committee, and is often filled with athletes looking for employment or just a continued association with the Olympic movement.
“It’s largely populated or staffed by really great individuals who most likely were great athletes, but most of those people use that position as a stepping stone to get into the Olympic movement,” said Adam Nelson, a retired Olympic shot put athlete who has tried to start a track and field union. “An internal athletes’ advisory council can’t negotiate with something it’s a part of . . . It’s set up for failure.”
Ben Barger, a retired Olympic sailor and former AAC member, said he understands why many athletes are unwilling to challenge Olympic executives.
“They’re afraid of the coaches and the people who get and dole out the money. . . . The person you’d be criticizing is the person who feeds you,” Barger said. “The money trickles to them first, and the athletes come last. . . . It should be the other way around.”
Current AAC leadership disputed the criticism offered by former members and said the disparity between Olympic executive pay and athlete pay isn’t a major concern for most athletes.
“Our job at the AAC is to represent all athletes. There are some very squeaky wheels who, whatever their issue is, won’t shut up about” executive pay and athlete pay, said Sarah Konrad, AAC chair and Olympic biathlete who pointed out that she and many of her colleagues have full-time jobs outside the movement and pursue their sports in their spare time.
“I didn’t get a ton of funding,” Konrad said. “We all have to make sacrifices. . . . You have to claw and scratch for funding, and it makes you a better athlete in the end.”
Konrad acknowledged she had not commissioned any survey or poll of her athlete constituency. Her belief that athlete pay doesn’t matter to most Olympic athletes is based on what she has heard from athletes she talks to and from other AAC members.
Lauren Fleshman, a retired elite runner who has been a strong advocate of increased athlete pay, expressed disbelief at Konrad’s statement.
“If you don’t ask the people you represent what’s important to them, how are you supposed you know?” Fleshman said.
Amateur roots shed
When the AAC was created, the Olympics hadn’t yet become a cash-generating machine.
In the 1970s — when Olympic TV rights contracts and sponsorship deals were minimal — the USOC was basically a glorified travel agency, taking in about $1 million annually and arranging logistics for Americans competing in the Games.
In 1978, the law now known as the Ted Stevens Olympic and Amateur Sports Act gave the USOC the monopoly on domestic commercial rights to the Olympics and created national governing bodies, or NGBs, to oversee individual Olympic sports. The Act — revised in 1998 — also required the USOC to “establish and maintain” an organization charged with protecting athletes’ rights: the AAC.
In the 1980s and 1990s, the Olympics evolved into a multi-billion-dollar global sports industry, thanks to soaring television and sponsorship deals. Once subsisting on $1 million annually, the USOC now brings in roughly $230 million every year, while national governing bodies’ income varies widely depending on sport popularity. (USA Swimming earned $32 million in 2014, for example, while USA Badminton made only $454,000.)
While the officials who run the Olympics have shed their amateur roots and ideals and professionalized, the AAC is still largely the same organization it was in the late 1970s, filled with volunteer athletes with minimal experience in the world of sports business.
“They neither have the time to dedicate to sport governance on a daily basis nor the experience or expertise to do so,” said Steven Sexton, a former member of USA Triathlon’s national team and assistant professor of public policy and economics at Duke University.
Across the table from the AAC members are executives with the USOC and the various sport federations, many of whom have worked in business for years.
“They’ve got MBAs; they’ve got law degrees; they’ve got a lot of experience in the business of sport; and they’re doing this every day,” Sexton said. “The AAC just ends up being outmatched.”
A rare push for change
In late 2010, at an AAC meeting in Las Vegas, Eli Bremer — an entrepreneur with an MBA and an Olympic modern pentathlete — gave a presentation in which he explained that the USOC was an “unregulated monopoly.” Business history predicted three inevitable failings would develop, Bremer told his fellow athletes: bloated bureaucracy, rising executive paychecks and a decline in service to the customers — in this case, Olympic athletes.
Bremer proposed creating an AAC task force to study the structure of the Olympic movement in the United States and recommend solutions.
“It struck a chord with me,” said Richard Maskel, a retired Team USA curler. “For the first time in two years, someone was actually suggesting something we could do.”
At a subsequent meeting with USOC officials, Bremer, Maskel and others pushed for leadership to benchmark their pay with similar-sized nonprofits. USOC CEO Scott Blackmun was not interested in that suggestion.
The USOC and all the individual sport federations are 501(c)3s — they pay minimal taxes and solicit tax-deductible donations — and in the nonprofit world, the salaries of Blackmun and his peers set them apart.
In 2015, according to a nationwide survey conducted by the NonProfit Times, the average total compensation for the CEO of a nonprofit with a budget of $50 million or more (the highest category) was $413,000. That same year, the USOC had seven executives make that much or more, from Blackmun (just shy of $1 million) to Chief External Affairs Officer Patrick Sandusky ($413,000).
At some individual sport NGBs, which oversee smaller budgets than the USOC’s, executive pay even further outpaces nonprofit peers. In 2014, USA Track and Field CEO Max Siegel made $1.1 million. According to that same NonProfit Times survey, the average CEO of a similarly sized nonprofit to USA Track and Field made $191,000.
Blackmun was in Rio de Janeiro and unavailable for an interview this past week, but Sandusky released a statement pointing out that the USOC competes with professional sports leagues and major college athletic conferences for talent and thus needs to pay its top employees more than executives at similarly sized nonprofits.
An unpopular message
In early 2012, Barger — now a nutritional company executive — asked the USOC for several years of internal financial data so he could figure out where all the money went. To Barger’s surprise, Blackmun agreed, handing over several binders of documents.
Barger wanted to find out how much of the money that flows out of the USOC actually ends up in a cash payment to an athlete. In major American professional sports with unions, this figure is usually around 50 percent.
In September 2012, at a meeting in a Hyatt hotel in Colorado Springs — where the USOC and many NGBs are headquartered — Barger presented the figure he’d come up with after poring through the USOC’s financials: 6 percent.
In a recent phone interview, Barger acknowledged there isn’t enough money flowing through the USOC for all Olympic hopefuls to get paychecks as they train, but he still feels Blackmun and his colleagues should take paycuts and give more money to athletes.
“My challenge to them was why weren’t we spending more money on the shareholders — the athletes — and building a lighter infrastructure,” Barger said. “I just felt like they could do a lot better.”
As Barger went through his presentation, he said, he received the pushback he expected from USOC officials in the room, but he also dealt with repeated interruptions and an effort to cut his presentation short from a surprising source: AAC chair Matt Van Houten, a team handball athlete.
In a phone interview, Van Houten denied trying to cut the presentation short but acknowledged he strongly disagreed with Barger.
“It would take me a while to tell you how naïve and superficial that presentation to the USOC was,” Van Houten said in a recent interview. “It wasn’t the way you work when you’re dealing with people like [former EA CEO and USOC board chairman] Larry Probst. It was confrontational and obstructionist; he was demanding all kinds of information.”
A few weeks after the presentation, Van Houten announced he had been hired as CEO of Team USA Handball, with an expected salary of about $120,000.
“It struck us as a massive conflict of interest,” said Bremer, one of the other athletes involved with the presentation.
Van Houten’s job at Team Handball didn’t work out quite as expected, he said. Money promised by the USOC didn’t come through, and he only made about $70,000 — not $120,000 — in his first year. He soon left, returning to practice law in New York.
Despite the way his career ended, Van Houten said he doesn’t harbor any ill will toward the USOC.
“I wasn’t in it for the money,” Van Houten said. “I was in it for the love of the sport.”
