Monday, April 6, 2009

Negative VORP

Last night, the 2009 MLB baseball season began. No other industry has monetized statistics quite like baseball has, with agents turning homeruns and RBI into dollar bills. Lots of them. So it would only logically follow that new, less traditional statistics have been invented to attempt to track less tangible, but meaningful attributes of a player's performance. One such metric that has increased in popularity amongst baseball nerd circles is VORP, which is an acronym for Value Over Replacement Player. It is defined as the number of runs contributed beyond what a replacement-level player at the same position would contribute if given the same percentage of team plate appearances.

For example, if Jimmy Rollins, shortstop for the Philadelphia Phillies, were replaced by backup utility infielder Eric Bruntlett, what would the drop-off in statistical offensive production look like? Essentially, whatever this figure, would be factored towards creating Jimmy Rollins' VORP.

Soon after VORP was created, people started to think about less productive players. Could there be such a thing as negative VORP, whereby a player's performance is worse than a replacement player, and thus is actually detrimental to the team?

The answer, of course, was yes. For example, Andruw Jones, the five time All-Star and ten time Gold Glove Award Winner, had a VORP of -17.3 last year, as he could barely hit a baseball.

What does this have to do with real estate and finance, you ask? Absolutely nothing. But, it did get us thinking about the fun, somewhat practical nature of applying negative VORP to the world outside baseball.

What people outside baseball that have in some way affected the commercial real estate and finance community might have negative VORP?

Let's take a look at various peoples' VORP's to find out.

George Bush (-21) - VORP: Value Over Replacement President

Tim Geithner (+1) - VORP: Value Over Replacing Paulson

Donald Trump (-7) VORP: Value Over RealityTV Personality

Harry Macklowe (-12) VORP: Value Over Realty Partner

Sam Zell (+34) VORP: Value Over REIT Profits

Bernie Madoff (-64 B) VORP: Value Over Real Ponzi

Please submit your own Negative VORP candidates by leaving a comment on this post....

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