The Phillies paid an analytics company millions. Now they're suing it over ‘loss of competitive advantage'

New York Times

20-03-2025

CLEARWATER, Fla. — In the summer of 2021, as the Phillies began reorganizing their baseball operations under Dave Dombrowski, the architect of their first full-fledged analytics department left the organization. Andy Galdi took a position with Zelus Analytics, an upstart company that built relationships with professional teams in numerous sports.
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The Phillies soon became one of them, paying Zelus $600,000 in 2022. They paid another $1.275 million to use the company's services in 2023 and 2024. Those contracts included 'division-exclusive' licenses; Zelus could not share data with any other National League East club. It could not license its platform to more than six Major League Baseball teams — one per division. The Phillies were apparently pleased with the product; they planned to renew the contract for 2025.
Now, the two sides are heading to court.
The Phillies last week sued Zelus for what they said was an attempt to sell its platform to more rival teams. They are asking a judge to issue a temporary restraining order that prevents Zelus from licensing, selling or distributing its 'Titan Intelligence Platform' to more MLB teams.
The club is seeking 'compensatory damages in an amount to be determined at trial' for the breach of contract. The lawsuit added: 'The harm suffered by the Phillies cannot be adequately remedied by monetary damages alone.'
The lawsuit, first reported by the Philadelphia Business Journal, was filed at U.S. District Court in Philadelphia.
The Phillies declined to comment Wednesday. A spokesperson for Teamworks, Zelus' parent company, issued this statement in response to requests for comment:
'Teamworks Intelligence, formerly Zelus Analytics, is proud to offer analytics capabilities so differentiated, impactful, and innovative that the Phillies have attempted to block its rivals from gaining access. While we cannot comment on the specifics of the litigation, we are confident that Teamworks is acting in compliance with the agreement. We look forward to resolving this matter, and in the meantime, we will continue delivering world-class solutions that equip organizations to make decisions that help them excel on and off the field.'
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The dispute provides a rare peek into a common practice across MLB; teams often pay for access to certain datasets or platforms while sometimes outsourcing high-level analytics work to private companies like Zelus. The lines are sometimes blurred; Zelus has hired research and development staff members from the Phillies during their partnership.
But the Phillies, according to the lawsuit, argued that Zelus selling components of the platform beyond the original terms created 'an unquantifiable competitive disadvantage in player evaluation, acquisition, and strategic decision-making across MLB' and is 'undermining the Phillies' ability to make baseball operations decisions based on proprietary analytics that were intended to be available to a strictly limited number of teams.'
Doug Fearing, the CEO and co-founder of Zelus, emailed Phillies assistant general manager Anirudh Kilambi in November with Zelus' plans to unbundle the Titan platform into separate products that would be marketed to teams that weren't Zelus clients.
'Our hope is that each of our current partners will transition to non-exclusive terms,' Fearing wrote. He then offered discounted pricing in exchange for the Phillies surrendering their exclusivity. But, in February, the Phillies exercised their option to exclusively use the Titan platform for the 2025 season at a $725,000 cost.
Teamworks acquired Zelus in 2024, which in Zelus' perspective, has opened the door to more clients. Teamworks is used by every MLB team. Six teams — one in each division — currently use Titan. Now, Zelus staffers have argued they should be able to sell their platform to more than one team in any division.
This dispute comes as the Phillies have continued to invest significant resources in their analytics staffing. They have one of the larger departments in MLB. John Middleton, the franchise's CEO and managing partner, has championed the increased use of data-driven decisions. And although Dombrowski is an executive steeped in decades of experience, he has included his analysts in some transactions. The Phillies have bolstered their biomechanics program, even building a lab in Florida.
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In last year's media guide, the Phillies listed 31 members in their R&D department — not including Kilambi. This year, they reorganized the analytics arms to reflect a growing presence. They list 41 employees over three departments — foundational research and applied biomechanics, predictive modeling, and software engineering. Employees from other departments could fall under the R&D umbrella as well.
Galdi, who came to the Phillies from Google in 2016, helped usher the Phillies into modern times. He departed midway through the 2021 season; his influence had waned as Dombrowski, the club's president of baseball operations, implemented changes. Zelus hired Galdi as a vice president of the company's baseball and basketball products. He has since recruited Phillies R&D staffers to join him at Zelus. Natan Weinberger, who was the first software engineer in the Phillies' R&D department, is now a Zelus engineering manager. Hannah Gaudet oversaw the Phillies' machine-learning engineering and is now an engineering manager at Zelus.
The Phillies, in the lawsuit, stated they use Zelus' platform to 'inform critical baseball operations decisions, including player evaluation, prospect assessment, trade analysis, roster construction, asset valuation, and on-field strategy.' This legal challenge might change the common practice of teams outsourcing some sensitive R&D, even when knowing the risk involved.
Teams have cited a variety of reasons for these types of agreements; one said they needed it to jumpstart their department that was behind the times. Another team said it was good to use outside platforms as a benchmark against their proprietary metrics and processes.
At the Winter Meetings in December, Zelus offered MLB teams new standalone components with annual costs ranging from $70,000 to $350,000. The most expensive offering — called 'Roster Intelligence: Complete' — promises evaluation tools and 'core metrics' focused on U.S. amateur players and international pro players.
A product called 'Game Intelligence' is available for $220,000. That includes tools that assist with on-field strategy, including 'batter-pitcher matchup projections, fielder positioning recommendations, pitch outcome visualizations, and pitch type projections.'
Zelus offered the Phillies a $280,000 discount for 2025 on the entire package. The Phillies weren't interested. They wanted to maintain the exclusive division rights they believed were contractually obligated.
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Now, the legal fight over whether the Phillies have suffered a 'loss of competitive advantage,' as they argue in the lawsuit, is just beginning.
— The Athletic's Eno Sarris contributed to this report.
DOCUMENT: The Phillies' lawsuit against Zelus Analytics and Teamworks
(Photo of Phillies coaches and staff watching Koyo Aoyagi throw this spring: Nathan Ray Seebeck / Imagn Images)