The Decline of City Tattersalls Club - who is to blame ?

There is no question that City Tattersalls Club has gone downhill dramatically since Tony Guilfoyle started in the top job. But he is only an employee, answerable to the Committee. It is the Committee who are supposed to be in charge, in this or any other members club. So who is to blame ?

The rot started with John Healy - the Chairman in 2006
If you want to understand why City Tatts is the way it is today, you have to go back to 2006. In 2006 it was already obvious that Tony Guilfoyle was a disaster for the Club. In an attempt to get the Committee to take action before it was too late, members called a Special General Meeting to pass the following four motions:

1. That the International Buffet be reopened
2. That major building works be approved by members
3. That remuneration of the highest paid employees be reduced in line with industry averages
4. That the Committee stop the reduction in facilities and amenities in the Club

Not only were these problems obvious at the time but everything that has happened since then proves just how right members were in seeking action.

John Healy's reaction to the four motions
If Healy had any brains he would have prosposed these ideas himself long before the members did. And if he had an ounce of integrity he would have supported the members after they proposed them. Instead he embarked on an insane, spiteful crusade to crush the proposals:

• First, he got legal advice to deny members the right to vote on the motions at the meeting !
• Next, as Chairman of the meeting, his spiteful performance set a new low in dealing with members of City Tattersalls Club
• Following the meeting, he then took the astonishing step of removing the right of members to put forward a motion at any meeting (and got this approved with the aid of postal voters)
• And finally, he did absolutely nothing about the problems that caused the motions !

It is worth noting that Patrick Campion was on the Committee at the time and fully supported everything that Healy did.

John Healy has a lot to answer for
Apart from the damage he did while he was there, he set new low standards for running City Tattersalls Club that are still there today. He was the first Chairman to spend insane amounts of members' money on legal advice to use against members - something that continues to this day. In fact, since that 2006 meeting the Club has spent over $500,000 on legal fees, mainly to silence members. He was also the first to put more effort into attacking members who noticed problems in the Club than he did in fixing those problems - again something that still happens today. The one good outcome of the 2006 meeting was that within a year he decide not to run again for Chairman.

But make no mistake - in the decline of City Tattersalls Club the rot started with John Healy.

The Current State of City Tattersalls Club - Part 2

Here are some more observations on the current state of City Tattersalls Club compared to what it was in 2004, when Tony Guilfoyle started as Secretary/Manager.

Removal of Members' Rights
The decline of City Tattersalls Club is clearly evident in the systematic removal of member's rights. An obvious example is the incredible decision move by Guilfoyle and the Committee in 2007 to remove the right of members to propose and pass a motion at a General Meeting. Another was the change to make it more difficult for members to call a General Meeting. These, and other measures, were done for one purpose only - to silence the concerned members who by then knew how badly the Club was being run.

Propaganda instead of information for members
Since 2004, City Tattersalls Club members have been subjected to propaganda, hype and management jargon like never before. It truly has been a sight to behold. Every failure, no matter how bad, is explained away by excuses, hype, corporate jargon and all-out propaganda. Restaurants that have cost millions to fit-out are always "well received by members" - even if they are empty. Continual declines in membership are "in line with our Strategic Plan". Any drop in revenue or profit is not a problem because it is "ahead of the budget". Even the Club's city centre location, probably it's most precious asset, is not spared the propaganda onslaught - Guilfoyle has repeatedly tried to push the idea that the location is a disadvantage, in order to excuse his failures.

This kind of propaganda has no place in a club like City Tatts which is owned by members and whose only function is to provide amenities to members.

The "Strategic Plan"
The most hilarious aspect of the new "management jargon" approach is the "Strategic Plan". It deserves a special mention because so many recent failures are linked to it. The first thing you need to know about the Strategic Plan is that members are not allowed to see it !. You may find that hard to believe in a members club like City Tatts but it's true. This is why Guilfoyle (and the Committee) love the idea of a Strategic Plan - because they can use it to explain any failure and no one can contradict them because no one else knows what's in it !. So, for instance, continual declines in membership are "in line with our Strategic Plan" ! (Yes, they actually said that). But the real issue with the Strategic Plan comes from observing the track record of the past 8 years. When you consider the long list of projects that flopped, were cancelled or were simply abandoned (like the Coffee Cart) you have to wonder if there is any Strategic Plan !

Building Works at City Tattersalls Club
The mismanagement of building works is one of the greatest areas of waste during Guilfoyle's time in the Club. It seems that when it comes to building works, he is always happy to spend the Club's money. (You can contrast that with the incredible penny-pinching in other areas of the Club.) But the members are rarely happy with the results. How many times has the Club spent millions on a renovation or refurbishment only to rip it all out a few years later ? For instance, how many botched attempts have there been to get a proper entrance on Pitt Street ? Actually the latest attempt is probably the worst of the lot. And it was supposedly managed by the Club's own building supervisor, Mark Lonngren. Well, anyone who watched it in progress last year said it was like an episode of the Three Stooges. First, they tried the cheapest possible floor covering, concrete - painted black "to look like marble". (This, in what was being called a "Grand Entrance" and costing over $1 million !) Then, after about 10 people had fallen over in the first week due to the shiny floor, they decided to carpet it. But then the carpet made the rise in the middle of the lobby harder to see, so older members still stumbled on it. Next, it was clear that they had never considered where the doorman's podium was going to be. So that became another comedy episode as they tried one position after another - and noticed, apparently for the first time, that there are pillars in the entrance lobby.

Still, while City Tattersalls Club may suffer from waste on building works, it has been a highly beneficial relationship for the lucky builder who seems to get most of the Club's business.

Save City Tatts Committee

The Current State of City Tattersalls Club

It is interesting to compare the current state of City Tattersalls Club to how it was in 2004, when Tony Guilfoyle started as Secretary/Manager.

Membership has dropped from 29000 to 17000
If you had only one indicator to tell you how City Tatts has gone in recent years just look to the number of members. Membership has fallen steadily from 29000 in 2004 to 17000 today. This one statistic tells you everythimg you need to know. And it has happened at a time when the population living in the vicinity of the Club has increased. Other clubs, like the Bowlers Clun, have increased membership during the same period.

Loss of Member Amenities
It is no surprise that membership is falling. Every you look in the Club, the very things that brought members to the Club are being taken away, run badly or allowed to decline. City Tatts was known for having entertainment 3 or 4 nights a week - now there is none. It was known for having a variety of restaurants that members wanted - now it has overpriced restaurants that are usually empty. It used to have bars with style like the Cocktail Lounge or the Members Bar - instead management spent a fortune on the Omega Lounge which was a flop from day one.

City Tatts now owes $18 million to National Australia Bank
City Tatts owes $18 million to National Australia Bank. This is now a major constraint on everything the Club does - because the bank will not lend any more money. Even a relatively small project like the front entrance alteration was delayed because the Club didn't have the money, and couldn't borrow more. And, of course, work on 194 Pitt Street has come to a halt for the same reasons. But the biggest question of all is how can a club that makes a profit of $20 million on poker machines every year be in the position of owing $18 million to the bank.

Waste and Mismanagement are taking City Tattersalls Club down
Part of the explanation for the dire financial straits of the Club is the amount of money being squandered every year. While the Club is suffering, and members are ignored, some are doing very well out of City Tatts. This is just a small sample:

• A few favoured employees are paid staggering salaries, regardless of performance. The Secretary/Manager is paid almost $600,000. And his secretary, Jan Elks, is paid $125,000.
• Fees and payments to various consultamts amounted to $796,000 in 2010. The Club's solicitor alone received $185,000 !
• The Club spends $500,000 each year on radio advertising. Everyone who has looked at this knows it is a total waste as far as the Club is concerned. But it is a nice bonus for the radio station - and the agent who receives the commission.
• Overseas Travel cost $56,000 in 2010 - for 4 people to go to Singapore, Hong Kong and Macau !

Just cutting back on these, and other obvious examples of waste, would add $1 million each year to the funds available for member amenities. That in itself would put the Club on the road to recovery.

Save City Tatts Committee

City Tattersalls Club is a members club that owns the large building it occupies in one of the best locations in Sydney. Throughout it's history, it has offered a variety of restaurants, bars, entertainment and other facilities that were appreciated and supported by members - and also appealed to the thousands who walked by the front door on Pitt Street every day. It also has the benefit of the profits from over 400 poker machines. In short, it has every advantage a club could possibly wish for to be successful.

Today the Club is struggling on every front. This blog will try to explain why.

Save City Tatts Committee