Originally published on Forbes.com on Oct 31st, 2012.
The Ryan Bailey story is a really great one. It has the makings of a real feel-good sports movie. I’m thinking the title might be something like “Run For Your Life “. I have a rather peculiar way that I see the story being framed, because of the peculiar way I learned about the story, but I will give you some of the highlights before I get into that. Ryan Bailey took home a Silver Medal from the London 2012 Olympics as part of the USA 4×100 relay team. The USA team tied the previous world record of 37.04, but the Jamaican team set a new world record of 36.84. Darn Jamaicans, can’t they be satisfied with bob-sledding
At any rate here are some of the bits and pieces that make for a real feel good sports movie. From a story by Doug Binder written in 2007
Debra Galban always held firm to her belief that Ryan, her son, would become a star, although in her mind she saw him carrying a football. She simply had no doubt. She envisioned someday doing Campbell’s Chunky Soup commercials with him some day, like NFL stars Terrell Davis and Donovan McNabb did with their moms. “I knew it by the time he was in kindergarten,” Galban said. “I knew he’d go to college on a full-ride scholarship. He was like a streak of lightning.” The chances of Bailey ever getting to college, however, seemed remote until the last six months. One setback after another kept him from realizing his athletic potential at McKay and his star-crossed athletic career seemed in jeopardy once again early this spring, when a hamstring injury delayed the start of his final high school track season. In Bailey’s corner was Parks, a 45-year-old teacher and coach from Alabama who had faced his own setbacks. Parks was fired as McKay’s track and cross country coach for fudging some entry list marks at an invitational meet in 2006. Parks’ credibility was damaged and his reputation was sullied by the firing, but it also opened up an opportunity. He wanted to try and nurture an athlete he knew could be very special. “I kept seeing the good parts of Ryan,” Parks said. “He needed a lot of molding and to gain a lot of maturity.”
And this from the Bleacher Report
Bailey’s formative years are marked with the life of a vagabond, moving from town to town across the Oregon countryside, often sleeping on the floor, or living in a car.
His single and disabled mom did what she could to provide, but with no father figure and a stepfather behind bars, Bailey lacked guidance and stability.
Gangs, truancy and trouble filled the void.
After eventually landing at McKay High School in Salem, social studies teacher and track coach John Parks accidentally overheard Bailey’s private but verbal challenge to the existing school sprint records. Parks invited Bailey to prove it—on the track.
But Bailey was into football and considered track a bit nerdy.
In time though, Bailey did venture to the track. Parks, stopwatch in hand, recognized his potential and a bond gradually formed between the two. Over months, it finally gelled into a true father-son relationship.
Now, armed with Parks’ positive influence, it was about this time that Bailey realized the futility of gang activity and he broke from many of his old negative patterns.
The way I want to frame the story is similar to the way The Blind Side was done. Sorry, I can’t find the right clip. In that movie, football player Michael Oher has to stand up to an NCAA investigation. The concern is that the family that helped him was acting as boosters for Old Miss. I knew somebody who told me about working full time for a college managing eligibility issues. I understand that NCAA compliance can get as complicated as tax law. The Ryan Bailey story could be framed as a tax story and it would be, as they say in those movies, based on a true story.
Framing The Tax Story
I learned about Ryan Bailey from a Tax Court decision. His coach, John Parks, was audited for the years 2006, 2007, and 2008. The total tax involved was just over ten grand. The sole issue was whether his independent track activities were being run as a business which would make his losses deductible. He had lost over $150,000 over a decade, most of it in the three years that were audited. I did a post on the case indicating that I thought the Service’s case seemed very weak. I heard from one of my most constant commenters, Robert Baty who had a totally different take. I should mention that Bob is a retired IRS appeals officer. He was focused on the $150,000 in losses and the fact that even by 2011, Mr. Parks was barely breaking even. The part that caught my attention was:
In the summer of 2008 a gifted athlete named Ryan Bailey, whom petitioner had begun coaching in 2006 became a qualifier for the Olympic trials in Eugene, Oregon. Bailey ran the sixth-fastest time for an American runner in the 100 meters, and his race times indicated that he was one of the world’s fastest runners in the 100- and 200-meter distances. In 2009 petitioner became Bailey’s professional coach and manager and entered into a contract with Bailey which entitled petitioner to $5,000 for 2009 and $10,000 in subsequent years, plus a percentage of any bonus that Nike agreed to pay Bailey. As a result, petitioner’s reputation and the quality of athletes he coached improved and continued to improve through the time of trial. As of the time of trial, petitioner had acquired a contract with Nike which will enhance his reputation and success as a track coach even further.
In the movie version, they will use both me and Robert Baty as technical consultants. I was thinking the accountant/tax attorney (the roles have to be conflated it being a movie) would be played by Robert Redford. I’m thinking Sam Elliot for the crusty, cynical IRS agent that Bob Baty will be coaching. Here is the ironic part. The feel-good narrative casts Mr. Parks as the concerned teacher who notices a mixed-up kid with great potential and helps him overcome the obstacles that keep him from succeeding. That is the narrative that the crusty IRS agent will want to push. The advocate for Mr. Parks in Tax Court had to emphasize what was in it for him. The fact that you love what you are doing for its own sake makes for a better feel-good story and is more inspiring. In a Section 183 (hobby loss) case, it is a factor that counts against you. It is not fatal, but it is a negative factor. If you want to deduct your losses, you need to show that you had a plan that had a plausible chance of making money for you.
I have tried to learn more about the economics of coaching world-class runners, which would have enhanced this post, but have not had a lot of luck yet. I noticed that my previous post on this subject was picked up by some track sites, so maybe someone will be able to shed some light.
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