Team Philippines Hidilyn Diaz competes in Weightlifting – Women 55kg Group A on day three of the 2020 Olympic Games at Tokyo International Forum on July 26, 2021 in Tokyo, Japan.
Chris Graythen | Getty Images
Why some athletes earn more
More than 600 US athletes compete in the Tokyo Olympics, and the United States has so far won 11 gold, 11 silver and 9 bronze.
The U.S. Olympic and Paralympic Committee rewards athletes with $ 37,500 for each gold medal won, $ 22,500 for silver, and $ 15,000 for bronze. Most of this prize pool is non-taxable unless the athletes report gross income greater than $ 1 million.
U.S. athletes also receive other forms of assistance, including health insurance, access to world-class medical facilities, and assistance with tuition fees.
By comparison, Singapore rewards its gold medalists almost 20 times more than the US players who take their first custom gold medal for the city-state booth and receive Singapore dollars 1 million ($ 737,000). The prize money is taxable and winners must return a portion of it to their national sports federations for future training and development.
The country only sent 23 athletes to Tokyo.
The US sports economy enables athletes to better monetize their talents as most of it is driven by the private sector, according to Unmish Parthasarathi, founder and chief executive of consulting firm Picture Board Partners.
In places like Singapore, India, and elsewhere, many of the national sports initiatives are driven by governments who sometimes use higher monetary rewards to promote a growing sports culture, he told CNBC.
Malaysia also has juicy rewards for its Olympic champions.
Athletes who win gold will receive 1 million ringgit ($ 236,149), while silver winners will receive 300,000 ringgit, and athletes who win bronze will receive 100,000 ringgit. Expressed in dollars, a Malaysian Olympic bronze winner will receive a higher performance award than a gold winner from Australia or Canada.
How athletes make money
In addition to receiving monetary and non-monetary rewards from their countries for winning medals, the Olympians rely on other sources of income for their athletic endeavors.
Athletes from larger, more competitive countries receive scholarships or training grants from their national sports federations. Top performers collect prize money by winning national and international tournaments. Others earn a steady salary by doing a variety of jobs.
Some, like U.S. badminton player Zhang Beiwen, have reportedly relied on crowdsourcing to fund their trip to Tokyo. Most Team USA athletes are not represented by sports agents and some have no sponsors or referrals at all, according to a Forbes report.
Naomi Osaka of Team Japan serves during her third round match in women’s singles against Marketa Vondrousova of Team Czech Republic on day four of the Tokyo 2020 Olympic Games at Ariake Tennis Park on July 27, 2021 in Tokyo, Japan.
David Ramos | Getty Images
A handful of athletes can get multi-million dollar advertising contracts or sponsorship deals before they compete in the Olympics or after they succeed in the Games. For example, tennis star Naomi Osaka is said to have made $ 55 million from commercials in 12 months and has reportedly been named the highest paid female athlete of all time.
But getting lucrative deals is rare and hardly the norm.
Parthasarathi pointed out that for some it is a profitable career move Athletes should get into coaching after retirement, as people are willing to pay a premium for former Olympians.
Disclosure: CNBC parent NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics holds the U.S. broadcast rights to all Summer and Winter Games through 2032.