How college sports juiced Olympic development

0:01NPR

0:11This is The Indicator from Planet Money. I'm Waylon Wong, and guess who's back? Adrienne Ma. Welcome back, Adrienne. What's up? Good to be here. It's so nice to see you again. And you know what? You are back right in time for the Olympic Winter Games, which officially kick off tomorrow in Italy. That means it's once again time to get obsessed with niche sports like luge and biathlon and to be chatting casually about triple sow cows and twizzles and figure skating. I know what all of those things are. Yeah, you do. And of course, this is a time of comparing how many medals the U.S. gets versus other countries.

0:49After all, athletic prowess has long been a measure of soft power in geopolitics. For the U.S., this desire to prove American superiority was really strong during the Cold War. The Soviet Union sponsored their Olympic athletes. Americans wanted to build a system for producing Olympic champions that was based on free enterprise. And this Cold War search for a winning business model ended up in a very American place, although not the one that policymakers were expecting. College football has been paying for Olympic development, Olympians' hopes and dreams for the past half century. Today on the show, we explain how college football is the engine that actually powers Olympic development in the U.S.

1:30and why the system might be in jeopardy.

1:43Ty Danko first got into luge as a college student in the 1970s. This is a sport where you lie down on a sled that travels over 90 miles per hour on an icy track. If you do it right, you should be able to put the sled within an inch of where you want at any time. But obviously, when you begin, that's not what happens. But Ty stuck with it. He figured it out, and he actually made it to the U.S. Olympic team for the 1980 Winter Games. Now, at the time, Soviet-controlled East Germany dominated in luge. The Americans were the underdogs. And Ty says even their gear wasn't as nice. He remembers bartering with the Europeans at competitions, and Americans trading stuff like blue jeans, electronics, and even Playboy magazines in return for things like helmet visors and footwear.

2:31I spoke a little German, and therefore I was the intermediary in a lot of these swaps. So I got a bit of a reputation early on as a guy to see if you wanted to sell something. And I got the nickname Banco Danko, you know, the Danko Bank. That is American free enterprise at work right there. I know. And you could argue it was this spirit that the U.S. government wanted to power the whole Olympic athlete pipeline. A few years before Thai competed, 1975, President Gerald Ford had set up a presidential commission. Its purpose was to study how to better field amateur athletes for the Olympics and financially support them.

3:12And remember, this was during the Cold War. So it was important to the U.S. that financial support did not come from the government. That would be like the Soviets. And President Ford said in a 1976 speech that Americans had a different approach to developing Olympic athletes. Our belief in the independence of the athlete and the importance of the amateur tradition has held us back from all-out government support. The commission's work resulted in a 1978 act that put the U.S. Olympic Committee in charge of all Olympic-related activity in the country. The legislation also helped create national governing bodies for individual sports.

3:50Victoria Jackson is a sports historian at Arizona State University. She says the committee had the government's blessing, but it did not have federal funding. And the U.S. never created a minister of sport position like a lot of other countries had. It lent itself really well to kind of doubling down on a free market, free enterprise, private funding-only approach to Olympic development in the United States. The 1978 legislation gave the U.S. Olympic Committee exclusive rights to words like Olympic, as well as symbols like the Olympic rings. This meant that the organization could make money by licensing that intellectual property to corporate sponsors like Coca-Cola, Nike.

4:31Gerald Ford's commission had also envisioned that American companies would step up in other ways, like they could fund training programs or they could hire athletes and give them paid time off the train. Victoria says that vision did not turn into reality. And this is where college football comes in. This sport was getting huge in the U.S. Today, Division I football programs bring in hundreds of millions of dollars in annual revenue. The money comes from broadcast rights, corporate sponsorship, donations, and ticket sales. Those dollars pay for football coaches and recruitment efforts, but they also subsidize other college sports that aren't moneymakers.

5:07Victoria says the funding has turned American colleges into epicenters of recruitment and development for all kinds of top athletes. We have elite sport development within our schools. And that's paid for by a sport that's really only played in the United States, which is football. Today, around two-thirds of American Olympians are NCAA athletes. American colleges also produce a huge number of international Olympic athletes that train in the U.S. and then compete for their home countries. However, this business model is coming under strain. For most of its history, the NCAA college athletes were not allowed to be paid directly.

5:43Then, a few years ago, the NCAA allowed athletes to make money by licensing their name, image, and likeness. Then, last year, a landmark legal settlement made it possible for schools and the NCAA's top division to directly pay athletes. Victoria says these big shifts are a worry for the national governing bodies for Olympic sports. There's, believe me, extreme anxiety among the people at the top of those organizations because all that college football money that used to go to pay for all the other sports, more of it is staying with college football players now. Now, in 2020, Congress set up a new commission to study the state of U.S.

6:21Olympics and Paralympics. Dionne Kohler co-chaired this commission. She's a law professor at the University of Baltimore. And one thing this commission did was it surveyed Americans on how they felt about the Olympics. We set up this system where, you know, government involvement was considered absolutely terrible because we wanted to contrast with the Soviets. But that time has passed. And we now know with the development of sport that there can be some really smart ways that government can be involved. And in fact, shouldn't government be involved? Because the truth is, our survey showed on the commission, Americans are not opposed to some taxpayer dollars being used to support Olympic and Paralympic athletes because we in the United States like winners.

7:08We should know governments in other Western countries from Australia to the UK to Canada do provide financial support to their Olympians. The American model is fairly unique and has led to some difficult financial circumstances for a lot of athletes. About a quarter of Olympians and Paralympians earn less than$15 ,000 a year. And only around 12 % of Olympic athletes have any kind of sponsorship deal. Dionne says a lot of athletes have to rely on family support. And that means athletes with fewer resources can get excluded all the way down to the youth level. Youth sports is now getting so expensive that it's really going to exacerbate issues with our Olympic pipeline.

7:47We don't want our Olympic and Paralympic movement to be sort of only for the upper middle class, the wealthy. We want it to be that truly the best kids can grow into those athletes. Now, both Dion and sports historian Victoria Jackson say there are different ways the government could support Olympic athletes. For example, it could offer a kind of Medicare program so athletes could get better access to health insurance. Or the government could set aside some revenue from federal taxes on sports betting. Victoria says this money could fund athletic facilities at American colleges with the condition that they be opened up for community access.

8:25That way, people who aren't students can still use those facilities to train. So I could, like, go to my local luge facility? Oh, yeah. Luge facilities for everyone.