Manchester City, the English Premier League soccer club, is well-known for striking splashy deals to acquire the world’s top soccer talent.

During this season’s trading window, the club’s most significant addition wasn’t a young striker or a talented midfielder. It was a 39-year-old astrophysicist turned hedge fund analyst.

Laurie Shaw has joined Manchester City to lead “artificial intelligence insights.”

Moneyball Madness
An unlikely soccer club executive, Shaw studied astrophysics at Cambridge and Yale and worked at algorithmic hedge fund Winton Capital Management. For the last five years he worked as a statistician at the U.K. Treasury.

Now Shaw is playing a role in what has been described as an “arms race for Ph.D statistics and physics talent” to help use big data to better compete on the pitch. Shaw will use his big brain to:

• Work on player identification, recruitment and individual development, pre and post-match analysis, and recruitment of coaches.
• Build machine-based models to better manage player fatigue, injury and illness.

Liverpool, last year’s Premier League champion, has reportedly pushed heavily into data science. Experts say the move contributed to its first league title in 30 years.

Billy Beane SPAC Fail
Last year Billy Beane, the baseball executive who was depicted in the film Moneyball, launched a SPAC to bring the same big-data tactics to Wall Street.

His SPAC, called RedBall Acquisition, was in talks to acquire a minority stake in the parent company of the Boston Red Sox and Liverpool FC. Last week the deal reportedly fell apart as RedBall couldn’t secure enough outside capital at the proposed price.

The Takeaway: Red Sox fans won't be able to buy stock in the team any time soon.

The Boston Red Sox missed the playoffs this year, but champagne showers may still be in the cards.

John Henry, the owner of the Red Sox and European football club Liverpool FC, is in talks to bring his sports teams to the public markets in yet another 2020 SPAC merger.

According to the WSJ, Henry's Fenway Sports Group is contemplating a merger with a special purpose acquisition company called RedBall Acquisition Corp.

The Players
RedBall, the brainchild of former Goldman Sachs partner Gerry Cardinale and MLB legend Billy Beane, raised $575 million in August to acquire and optimize sports teams through an analytics-heavy approach.

John Henry bought the Red Sox in 2002 and Liverpool FC in 2010. And he's had a nice run:

• After an 86 year drought, the Red Sox have won the World Series four times since 2004 and, pre-COVID, regularly packed the stands with a devoted fan base.
• Liverpool won its first English league title in 30 years this summer and last year won the prestigious UEFA Champions League to become champions of Europe.

Deal Details: RedBall will raise another $1 billion to purchase a 25% stake in Fenway Sports Group, which is being valued at roughly $8 billion.

Why It Matters

While many top-tier European football clubs are publicly listed (including England's Manchester United and Italy's Juventus), publicly traded sports teams are a relatively untested concept in the U.S. The few exceptions include:

• Liberty Media owns the Atlanta Braves, but the baseball team is a subsidiary of a much larger company.
• The NFL’s Green Bay Packers are owned by shareholders who mostly consist of fans.

A deal for Fenway Sports would be a significant endorsement for the MLB, which has been the hardest hit of the professional sports leagues because of its heavy reliance on ticket revenue.

The Takeaway: RBIs, home runs, strikes, outs, and… return on invested capital. Add financial returns to the list of stats to track.

Shortly after he was hired by the Red Sox, in July 2003, James was the subject of a New Yorker article titled, “The Professor of Baseball,” that included a passage of particular interest all these years later.

“Joking, (then-assistant general manager Theo) Epstein suggested that they hire Bill James himself. Although James had seemed to position himself deliberately on the margins of the profession, (Red Sox owner John) Henry sent him an inquiring e-mail, just in case. James had, as it happened, worked in the past as a consultant for three major-league teams, but was forbidden to acknowledge his employment.”

Secret consultants are not at all an unheard-of thing in baseball, where the statistical community on Twitter often will bid farewell to someone who has accepted a role with a team they cannot name.

Fast forward 15 years from that New Yorker passage to a statement issued Thursday by the Red Sox.

“Bill James is a consultant to the Red Sox. He is not an employee, nor does he speak for the club. His comments on Twitter were inappropriate and do not reflect the opinions of the Red Sox front office or its ownership group. Our Championships would not have been possible without our incredibly talented players – they are the backbone of our franchise and our industry. To insinuate otherwise is absurd.”

It’s weird how James’ previous consulting work had to be kept secret, yet he’s been with the Red Sox as a senior adviser, quite publicly, since the middle of George W. Bush’s first term. James is listed on the team website as part of the baseball operations department, and that list includes a link to his bio – something that is not the case for Hall of Famers Tony La Russa, Pedro Martinez, and Jim Rice.

The Red Sox may have moved to “distance themselves” from James after his Twitter comments, since deleted, but they didn’t announce that they’re cutting ties with him for bashing “the backbone of our franchise and our industry.”

What James said that necessitated the quasi-apology was, “If the players all retired tomorrow, we would replace them, the game would go on; in three years it would make no difference whatsoever. The players are NOT the game, any more than the beer vendors are.”

As obviously untrue as that is, and as deserving of a rebuke from union leader Tony Clark as it was, it’s also indisputable that the philosophy of all labor being replaceable is nothing new in management circles, even going back to what’s often retold as a cute anecdote about Branch Rickey, when he told Ralph Kiner, “We finished last with you, we can finish last without you.” There’s a difference there, but it’s also worth thinking about in the context of Rickey bringing Jackie Robinson to the Dodgers not only as a move against racism, but because Rickey knew that his team being first to integrate would mean a competitive advantage on the field by greatly widening the available talent pool.

It’s evident what the problem is now, and it’s classic 2018: James said the quiet part out loud. Of course the Red Sox would put out a statement that they’ve barely even heard of James and that they love their players more than life itself, but it hardly changes the fact that we’re only a generation out from Major League Baseball actually using replacement players through spring training in 1995, right up until the strike that canceled the previous year’s World Series was resolved.

Henry bought a 1% stake in the Yankees in 1991, and had to sell his shares as part of his purchase of the Florida Marlins in 1999. In other words, Henry was part of ownership at a time when “the backbone … of our industry” was indeed the subject of an attempt to be replaced as a union-busting tactic that wound up failing. To insinuate that James’ tweets don’t reflect “the opinions of the Red Sox … ownership group” is absurd.