Mestrov Sets Record Straight On Dapto Saga

THE EXCLUSIVE BOMBSHELL INTERVIEW WITH GRNSW CEO TONY MESTROV THAT WILL ROCK THE DAPTO DOGS SAGA

GR: I think it's safe to say that Dapto's most recent media release on Friday suggests that there'll be no shifting away from their shock decision on Wednesday. You must find that disappointing?

TM: I have found a number of things from the club in the past week disappointing if not dumbfounding. Above all that their decision has come without consultation of members, participants and GRNSW. The real shock is that while every other TAB club in NSW signed up to being funded by GRNSW for the next three years, Dapto refused and then, suddenly, when questions were being asked about their financial reporting submitted to GRNSW, they held a secretive meeting on Melbourne Cup day with a handful of people and put up the shutters. Something does not add up.

GR: With legal proceedings continuing Monday, and the prospect of more to come, have you and the board identified a dollar figure where this process becomes impossible to justify?

TM: I think the first thing we are trying to do at GRNSW is keep racing going at Dapto while at the same time out what has happened behind closed doors at the club. Something doesn't add up – the numbers don't appear to add up – and we need to do everything in our powers through a court process and police involvement if appropriate to get to the bottom of the situation. We will review our position after Monday, but for now the focus is on obtaining the truth, and it's hard to get to the bottom of anything when the Dapto club's computers and hard drives are missing and the Dapto club board has gone to ground.

GR: Are you claiming financial irregularities in the Dapto club's accounts, or even stronger that is there any suggestion they have been "cooking the books"?

TM: We can only go on what we have been provided by them, and for GRNSW these are the facts:
The Dapto Agricultural and Horticultural Society only submitted a "Funding Model Projection" for GRNSW to base its figures for 2018-19 (other clubs submitted their actual Annual Reports). Financial analysis of the provided projections from the Dapto club for 2018-19, submitted by the Society, were used to compare against actual 2018-19 Annual Report figures from a handful of other NSW TAB clubs and in summary there were some major differences in costs:
We asked why of the following:
* Dapto spends a fraction of other clubs on repair and maintenance.
* Dapto administration costs are approximately double the other clubs.
* Dapto insurances are approximately triple the other clubs.
* Accounting/Audit fees double the next highest club of similar size and are more than 8 to 9 times higher than some.
* Utilities/Rates/Taxes are approximately triple other clubs
* Depreciation is approximately five times other clubs.
I don't think it is unreasonable for a governing body such as GRNSW to seek answers as to why this would be the case? Why are the costs so high at Dapto when compared with other clubs that stage the same number of meetings each year?
The fact that GRNSW sought clarification on these financial figures appears to have been a major trigger for why the Dapto Agricultural and Horticultural Society "put up the shutters".
I know there is a lot of speculation about this, but we just want the truth – and whether we need to legally obtain it in a courtroom and retrieve missing computers and hard drives, then that's what we will attempt to do as we seek to have these questions answered.

GR: So it is true that computers and hard drives are missing?

TM: The GRNSW administrator Grant Carroll, who was put in place on Thursday, has reported missing equipment and we have legally requested the Dapto club to provide the missing items immediately. This has not been forthcoming to date.

GR: What else has the administrator reported to you? We understand the administrator was able to access the venue on Thursday and that there was a problem with electricity to the lure, the irrigation system and the track lighting. There have been suggestions of sabotage?

TM: We found some of the behaviour in getting access to the track after obtaining a court order to do so was not what I would consider appropriate. However, on any claims of sabotage, we will be looking closely into the evidence gathered on the night and I would prefer not to comment specifically right now. We were told however that security gave an electrician access to the venue at around 1pm, on the instructions of someone at the club. As to what the electrician was there for, we are still investigating. We were able to salvage the meeting and hold the races, albeit with a delay to race times.

GR: Tony, this seems more serious than anyone has suspected. Do you think it is widely understood what the situation is?

TM: We don't know the answers to serious questions, and we need to get to the bottom of it. I don't know if we are anywhere near the answers we need at the moment. All we know is something does not add up.

GR: Slightly off topic, has infrastructure supporting the Rugby League at the Showgrounds (seating, grandstand maintenance, the bar and kiosk precincts) been funded by GRNSW or the A&H Society alone?

TM: It's a good question, and one which we'd like to understand from the Society and its board. In a media release at the end of last week the Society said their facilities are also "the home of Dapto Rugby League Football Club, Pigeon, Poultry and Dog clubs, Illawarra Cancer Carers, Learning Links Bingo, Dapto Markets, Aussie Night Markets, Accelerated Training, along with numerous other stakeholders and activities". One of the serious questions asked by GRNSW was what part of the costs for the entire Society is allocated in to the Dapto greyhound club and how does the rest of the accounting work.

GR: So, do you think the Dapto greyhound club – and I suppose GRNSW – are subsidising the others?

TM: I don't know what the relationship is – or arrangements are – with the other organisations. When we sought clarity on this the shutters went up. When we looked at the Society's 2017-18 Annual Report we saw that it appears to show that the Dapto Greyhound Club has been showing far less profitability than the other greyhound clubs of similar size that we work with. Other than the discrepancies in costs between Dapto and other same-sized clubs, GRNSW has also raised this question to the Society: Is the Dapto Greyhound club effectively subsidising the wider DAHS operations From our accounting analysis based on their own submissions, 100% depreciation of all Society assets, 97% of utilities, rates and taxes and 57% of accounting and audit fees are itemised in the greyhound side of their operations. Again, when we sought clarity, to see if we were missing something, the shutters went up – and then they made a shock announcement to "cease operations". If there is a logical answer to our questions we'd like to know it. It seems odd that response is to shut the shop and go to ground, leaving any communications to an agency to talk about community facility development plans and other smokescreens.

GR: On that point, what about the Dapto Agricultural and Horticultural Society claims in its press release that only 50 people (on average) attend greyhound meetings at Dapto?

TM: My answer here is important – as I think this is perhaps the best illustration of the tactics at play here – because their quoted number of 50 is way, way below the actual numbers submitted by the Dapto club to GRNSW over the past 20 months at least. According to figures the club itself reports into the GRNSW system for official attendance numbers, this is the breakdown by month. Again, I reiterate, all clubs do this self-reporting themselves into a system called "clubsecure", so the figures entered by Dapto Club and submitted to GRNSW are:
Mar 18 – total customers 1070/ average of 214 per meeting
Apr 18 – 3480 total / 870 average
May 18 – 2580 total/ 516 average
June 18 – 480 total/ 120 average
Jul 18 – 410 total / 137 average
Aug 18 – 180 total / 180 average
Sep 18 – 570 total / 142.5 average
Oct 18 – 450 total / 112.5 average
Nov 18 – 800 total / 160 average
Dec 18 – 1040 total / 260 average
Jan 19 – 1320 total/ 264 average
Feb 19 – 1950 total/ 487.5 average
Mar 19 – 1750 total / 437.5 average
Apr 19 – 1280 total / 320 average
May 19 – 1600 total / 320 average
Jun 19 – 1150 total / 287.5 average
Jul 19 – 750 total / 187.5 average
Aug 19 – 950 total / 237.5 average
Sep 19 – 1450 total / 362.5 average
Oct 19 – 1914 total / 382.8 average
So, according to their own numbers the average over the past 20 months is 300 per meeting. These figures are entirely supplied by Dapto Club to GRNSW.
The fact that the Dapto club would say in a media release that the average was six times less than what they have been telling us for almost two years is now a further reason GRNSW would like access to the computers that appear to have gone missing from Dapto club. Again, nothing appears to add up.

GR: Apart from Chair Noel Leslie reading a brief statement on Wednesday, we haven't really seen anyone from the Agricultural and Horticultural Society put their heads up, but they have been throwing out media releases, with information you believe is inaccurate, if not just false?

TM: The fact is a handful of people made a behind-closed-doors decision that was completely against their views of a few years ago – in that closure would affect thousands of lives in the region. So instead of fronting up to explain to the public, they engaged with an agency which has released a number of statements to try to divert attention from them. You are correct, there has been significant incorrect details in those releases, and to say my "tactics to try to push through a commercially unviable deal are reprehensible," is offensive. The whole reason we were negotiating was for a win-win outcome (as we did for the other 14 clubs) and when a club like Dapto tells you their costs are so much higher (double, triple and nine times) than other clubs, then you have to ask a few questions and seek some proof of those numbers. So, as GRNSW tried to work on maximising their revenues and trying to understand their costs, the Dapto Agricultural and Horticultural Society, a little group of less than 10 people, overnight put up the shutters. I'll let others judge whose actions were reprehensible.

GR: Sydney is famous for the harbour, the Opera House and the Sydney Harbour Bridge, Bathurst for motor racing, the Northern Territory has Uluru and Kakadu, the Barossa Valley for wine, Dapto for greyhound racing … has the Dapto Greyhound Club explained why they no longer want to continue operating?

TM: The simple answer is no they haven't. We have all read their media releases, but we view many of their statements as a deflection and diversion. Remember, this is the same Dapto club and same officials who were so vocal during the NSW shut down three years ago and said that a ban on greyhound racing would affect thousands of livelihoods. So why – and I repeat why, suddenly behind closed doors, when being asked to explain their financials – did they suddenly drive a knife into those livelihoods?

GR: Many locals have commented about the downturn in marketing and promotion at Dapto, and in hindsight the club has been accused by some participants of "running dead". What is GRNSW's view on that?

TM: It was part of our concerns when negotiating with the Dapto club about their guaranteed funding for the next three years. You use the words "running dead" and we've been inundated with similar concerns from participants in the past few days asking why other clubs of the same size are thriving, and the Dapto club appears to be stuck in quicksand. If there has been self-sabotage going on for other reasons, then we want to know why.

GR: You mentioned being ‘blindsided' about the club's decision to discontinue racing, given the negotiations over funding have been protracted, is blindsided too strong? Maybe surprised or disappointed?

TM: Blindsided is probably an understatement when you consider what I have just told you. For the club to apparently hold a meeting on Melbourne Cup day to decide to cease operations, without consultation, then issue a media release the following morning, and give me a few minutes notice as I was flying back to Sydney from Melbourne, then what would you call it? Surprised, disappointed, shocked, bewildered, blindsided and more would all be correct. There's much more coming to light now that we have an administrator in place.

GR: Presuming the Supreme Court finds in GRNSW's favour, is it untenable for the management and committee at Dapto to remain in place?

TM: Questions will be asked of all individuals involved in the behind closed doors decision to cease operations – and I expect those questions will publicly require answers. As far as GRNSW is concerned, we have appointed an administrator at the club and he has successfully staged a meeting last Thursday night as well as conducted planned events over the weekend, such as the Dapto markets, which the same individuals also tried to have cancelled. When we get to the bottom of why these actions of a select few were undertaken, then we can say more.

GR: What happens if Dapto is successful in the Supreme Court?

TM: Regardless of what happens on Monday, the spotlight on the Dapto Agricultural & Horticultural Society will continue until questions have been answered.

GR: Will nominations be taken for the proposed meeting on Thursday?

TM: Yes, that is what we have planned.

GR: Is a decision from the Supreme Court likely to be reserved?

TM: We have to let the arguments play out in court. We respect the process of the NSW Supreme Court, so will let that process take place.

GR: How much money has GRNSW invested into the Dapto Showgrounds site?

TM: We are now going back through the financial reporting of Dapto and line by line spending by them and investment from our side. We will be seeking advice on how to progress with this in the right forum to pursue any actions if required.

GR: They said you never met with them in the consultation?

TM: Yes, it was also said I had "never visited the Dapto Showground to meet with our CEO or Board over this or shown a desire to work with us on a fair deal." This wasn't about me personally, it was about our organisation meeting with their club – just as we did with the 14 other clubs – and as late as the previous Wednesday, October 30, my Racing Operations General Manager was at Dapto meeting with the club. He was also scheduled to meet with the club last Monday, but that meeting did not go ahead on Dapto's instruction. GRNSW works as a team to negotiate, it's not about me as the CEO. I'm not sure why they decided to make it personal, but it's probably because I stood up on Thursday at Dapto and said I will move heaven and earth to keep racing at Dapto.

GR: How did it affect you when they called for your resignation?

TM: It was just a ridiculous comment and I will treat it as just that – after all, if that is the best response to someone who, on behalf of participants in greyhound racing in NSW, wants to shine a torch into a few dark places about what is happening at the Dapto Agricultural and Horticultural Society and Dapto greyhound racing club, then what does it say?

GR: The club and some local politicians now have come out made it clear the venue is not simply a greyhound venue, and effectively GRNSW should stop being so heavy handed. Your thoughts?

TM: I found it interesting that initially the Society spoke about having to close immediately and essentially GRNSW was responsible to ending the institution that is greyhound racing at Dapto. But on Friday, this seemed to have turned with a release from the Society stating: "The A&H Society commenced in 1857, prior to racing, which commenced in 1937. The land is for the benefit of the community as a whole, not just greyhound racing. For instance, on an average night at Dapto Dogs about 50 spectators attend, compared to the market which has been cancelled due to the uncertainty, that attracts on average approximately 2,000 people."
For starters, we are well aware of the community events in Dapto, and as such the GRNSW administrator used all resources available to make sure that events ‘cancelled' by the Society – such as Sunday's markets – without any effort or concern or care for those involved, went ahead as scheduled. It appears to me that the Society is trying to create fear by just "closing and cancelling" everything. As we have proved with an administrator in after less than a week, we can run the show. It's not that hard really.
To be clear we are not saying that greyhound racing at the site is more important than anything else, we are just wanting to continue racing as we have done for many years.

GR: Tony this has been a turbulent time for Dapto, but one thing I have noticed is the way it seems to have unified the industry, and participants are praising your leadership and the fight you are showing for the industry. That is a massive positive.

TM: While the situation is not a good one, it is great to see the industry coming together as one with a common cause, and showing our combined strength. This is not about me however, it's about doing what is right for the participants, and GRNSW supporting them, particularly those in the local area. That's why the first thing I did on Wednesday night was to head down to Dapto and speak with the local participants about what we can and will do about the situation, and then make a strong stand on Thursday morning. I have said from the time I became CEO of GRNSW, that I wanted to lead a successful and strong industry, one which is socially responsible, and to support participants, and make this sport better for all of us. We are continually trying to grow and build the sport in NSW, be it through prize money increases, major events such as the TAB Million Dollar Chase, track upgrades, promotion and advertising campaigns, and of course through our rehoming of retired greyhounds. We want a flourishing sport, and one that all participants can be proud to be a part of.

GR: It won't be a popular question, but one that needs to be asked. Talk of TAB tracks rationalization has been on the agenda for a while now. Was this not an opportunity to meet that objective with a club that's demonstrated zero interest in being part of the industry?

TM: We believe, and it has been clearly demonstrated by the participants and public opinion that we all want a club at Dapto. While rationalization more broadly has been spoken about for some time, the intention has been about optimizing racing so we can facilitate more racing, not less. What this looks like is still under review, but to answer the question: GRNSW wants the world-famous Dapto Dogs to continue and prosper, which is why we have appointed an administrator to run the club as we search for answers about what has been going on at the Dapto Agricultural & Horticultural Society more broadly.

GR: If Dapto closes, what is the future of greyhound racing on the South Coast?

TM: The answer to that is simple. We do not want Dapto to close, and we do want greyhound racing on the South Coast to continue to grow. I think I have made that clear in standing with participants to fight for them.

Note: All efforts to speak with the management and committee of the Dapto A&H Society have so far been declined.