Phillies Take Legal Action Against Zelus Analytics
CLEARWATER, Fla. — During the summer of 2021, the Philadelphia Phillies underwent a reorganization of their baseball operations under the direction of Dave Dombrowski. Around this time, Andy Galdi, who played a key role in establishing the team’s first analytics department, departed for a role at Zelus Analytics, a company known for forging connections with professional sports teams.
As a result, the Phillies began utilizing Zelus, paying $600,000 in 2022 and an additional $1.275 million for their services in both 2023 and 2024. Their contracts with Zelus included “division-exclusive” licenses, ensuring that the company could not share data with other teams in the National League East. Additionally, Zelus was restricted from licensing its platform to more than six Major League Baseball teams, allowing only one team per division. The Phillies appeared satisfied with the services, indicating plans to extend their agreement into 2025.
Legal Dispute Arises
Recently, the Phillies filed a lawsuit against Zelus, alleging that the company attempted to sell its platform to rival teams. They are requesting a temporary restraining order to prevent Zelus from licensing, selling, or distributing its “Titan Intelligence Platform” to additional MLB teams. The club also seeks compensatory damages for what they consider a breach of contract, highlighting that the damages they incurred cannot solely be remedied by financial compensation.
Reported by the Philadelphia Business Journal, the lawsuit was filed in U.S. District Court in Philadelphia. The Phillies have chosen not to comment on the ongoing case. However, a spokesperson for Teamworks, the parent company of Zelus, expressed confidence that they are adhering to the contract and look forward to resolving the matter while continuing to provide its analytics solutions to organizations.
Implications of the Dispute
The situation sheds light on a common practice in MLB, where teams pay for specific datasets or platforms while often outsourcing high-level analytics to companies like Zelus. The lawsuit claims that Zelus’s attempts to sell parts of the platform outside the agreed terms may create an unfair competitive edge regarding player evaluation and strategic decisions for other MLB teams, potentially undermining the Phillies’ operational effectiveness.
In a communication from Zelus CEO Doug Fearing to the Phillies’ assistant general manager, he proposed unbundling the Titan platform into separate products for teams not currently using Zelus services. Despite being offered discounted rates for relinquishing their exclusivity, the Phillies opted to exercise their exclusive rights for the Titan platform for the upcoming 2025 season.
Continued Investment in Analytics
As this dispute unfolds, the Phillies have shown a strong commitment to building their analytics department, now one of the largest in MLB. With a significant increase in staffing, they listed 41 employees across various analytics sectors this year. This follows the influence of Galdi, who had pushed the organization into the modern analytics era before leaving for Zelus, where he has since recruited former Phillies staff.
The ongoing legal battle questions whether the Phillies have indeed lost a competitive advantage as they claim. With the integration of multiple analytics products offered by Zelus in the market, the impact of this dispute may have far-reaching effects on how MLB teams approach outsourcing and their reliance on external analytics resources.
