hat does a book about baseball and business budgets have in common with Bill (James) an obscure modest man obsessed with baseball statistics? The evolution of statistics: since the beginning of time, assessing the odds of success has been part of the human experience. Once considered part guesswork, luck, shrewdness, intuition, and intervention of the gods, individuals who could predict the outcome of a particular venture early on gained great advantage

A statistic is a numerical value, such as standard deviation or mean that characterises the sample or population from which it was derived. Most people would struggle with that definition on its own, but statistics explained in terms of how life insurance premiums are priced, for instance, based upon the probability of numbers (and health of those) to insure each year, make rather morbid sense. Almost every industry, particularly the investment industry, relies on statistical data for productivity planning tools. Truly understanding what a group of patterns (statistics) translates into in terms of meaningful action, is an art in and of itself, and the basis for serious education for thousands of business professionals.

Until recently, though, statistics in game playing appeared to be nothing more (in many wives' opinions) than a collection of facts that all sports fanatics could spout off verbatim. Certainly, besides being like totally boring, they never seemed to be a contributing factor in say, wins per season. Baseball, with its old establishment architecture, was immune to any innovative management changes.

Bill James, however, knew differently, amassing a definable and workable quantity of data on player evaluation, player development and baseball strategy over 25 years. Little known outside his peer group of loyal readers, he self-published his Historical Baseball Abstract for many of those years. With such titles as , Aug 1986, and so on, it hardly seemed the kind of exciting information that would take to mainstream baseball thinking. But could it be real knowledge that a manager might, just might, use to tilt the statistical probability of winning ballgames into his club's favour?

Then the stars collided with the publication of a baseball bestseller, the success story of general manager Billy Beane and the Oakland Athletics; and a Harvard graduate number cruncher, Theo Epstein, hired to build statistical data models using Bill James methodology.

In his book, Michael Lewis writes, “My book began with an innocent question: how did one of the poorest teams in baseball, the Oakland Athletics, win so many games? How could a small group of undervalued professional baseball players and executives, many of whom had been rejected as unfit for the big leagues, have turned themselves into one of the most successful franchises in Major League Baseball?"

GM Beane, faced with the second lowest payroll budget in baseball, had to use innovation to find and field a team no one else wanted. And on the way discovered that not only were some traditional yardsticks flawed but that they could quantify with amazing accuracy, decisions such as:

Are hitters more predictable than pitchers?

What are the most important attributes to look for in projecting a player's future?

How much is a player worth? If you have to pay more than he is worth, how do you know when to stop?

How good is a player relative to his cost per play?

What is the chance that a player given his age, position, batting record, will continue to be a productive major league player in three years? Four? Five?

Knowing the probable answers to these questions was only part of the solution. The remaining challenge to create a cohesive winning team fell to the amazing intuition and personal convictions of GM Beane. His skill in interpreting these numbers from the real-live talents (or lack thereof) of often-considered-to-be second rate low-cost players meant that it no longer mattered that they did not have expensive starting line-up stars.

He and Epstein quantified their cumulative player data to define every player's ultimate value to the team. They discovered they had to assess offensive production differently than others, stressing on-base percentage and power, de-emphasising stolen bases and putting the ball in play. They developed an approach to acquiring talent based as much on statistical achievement as on traditional tools, piquing the interest of other franchises (the Blue Jays and Red Sox, particularly) while annoying the traditionalists sacred theories.

GM Beane also turned his baseball team into a business. At the end of each season when those supposed second rate players were looking more and more like first rate stars, he sold them off - at a considerable profit, much the way overvalued stocks are culled, sell at the high, buy at the low. He had to. It was survival using a statistically defined player shelf life and the only way to ensure operating capital for the next season. He also knew there was more second-tier low cost talent desperate for a major league slot.

After the first season with GM Beane that the Oakland A's came back from the doomed to end with a flourish, naysayers scoffed. A fluke. Then a second successful season, then a third. Could these large numbers mean something?

Fast forward a few years. Bill James is now a special consultant to the Boston Red Sox general nanager Theo Epstein, now aged all of 30 years old, who has made history.

We know the outcome, 86 years to a World Series title and a lunar eclipse. They know one true thing - the use of statistics, numbers and estimates of probability of achievement are changing the very nature of Professional Sports into opportunities for real investments, just the way it has always been in business.