He rose to national prominence after being recruited by Indiana coach Bob Knight as an 8th grader, an unusual move at the time.

At the time, Knight and his 1985–86 team were being covered by author John Feinstein for his book A Season on the Brink, which would later go on to be a national best-seller.

Later that year, as Bailey was entering Bedford North Lawrence High School (BNL) and Feinstein's book was being published, the acclaimed basketball movie Hoosiers was released.

"[4] In November 1986, as his freshman year of high school was beginning, Sports Illustrated tabbed him the country's best ninth-grade hoopster.

Bailey scored 20 points in that game and BNL trailed 47–46 after three quarters, but he fouled out with 2:06 to go and the opposing team – led by Lyndon Jones and Jay Edwards – prevailed 70–61 en route to their third straight state title.

The next season, with Bailey as a sophomore, BNL again qualified for the final four, this time facing Muncie Central.

Their opponent, Concord High School, was undefeated and led by future University of Nebraska standout Jamar Johnson.

Bailey was named Indiana Mr. Basketball, earned McDonald's All-American honors, and was tabbed the 1990 consensus National Player of the Year.

With such talented teammates around him, Bailey largely served as a role player, averaging 11.3 points per game his first three years.

Nevertheless, Indiana's athletic offices got more requests for paraphernalia and autographs for Bailey than any of the team's other stars, including Cheaney.

[6] Bailey's performance in the upset earned him a spot on the cover of Sports Illustrated, which has since become an iconic image among Indiana fans.

He was later employed as the boys' basketball coach for his alma mater, Bedford North Lawrence High School.

The Times-Mail in Bedford, Indiana reported on March 1, 2007, that Bailey had resigned as coach of BNL after two seasons, he finished with a 23–19 overall record.