On the brink

DARK DAYS: Defeat to Middlesbrough tonight could pursh Newcastle into the Championship abyss. The stakes are just as high for Boro manager Gareth Southgate.

DEREK LLAMBIAS was in no doubt. “Relegation is a major fear for us,” the Newcastle United chief executive said. “We have to be ready for the future but realistically I think we’ll stay up.”

That statement was delivered in mid-February, when Newcastle’s plight, though serious, was far from critical. How laughable such nonchalance seems now: just over 10 weeks later, and the Tynesiders are on the brink of the precipice. Defeat at home to Middlesbrough tonight could just shove them over the edge.

With the stakes just as high for Boro, fear will hang heavy in the air over St James’ Park this evening, and the most panicky spectators of all will be in the directors’ box. For Mike Ashley, the Newcastle owner, and his Boro counterpart, Steve Gibson, relegation is more than just a blow to club pride: it could be the catalyst for financial meltdown.

There is no soft landing for clubs tumbling out of the Premier League. The figures are startling: both Boro and Newcastle will see their revenues from TV deals drop tenfold – from a minimum of £28m to around £2.5m – while corporate revenues will be slashed in half. When set against such losses, parachute payments of £11.5m for two seasons provide scant consolation.

The pain is particularly acute for clubs unused to life away from the Premier League money trough. Newcastle have been top flight fixtures since 1993, Middlesbrough since 1998: for players, executives and a generation of fans, relegation represents a leap into the unknown.

“This is virgin territory for Newcastle and Middlesbrough,” said Phil Alexander, the Crystal Palace chief executive who tasted relegation from the Premier League in 2005.

“They have the comfort of parachute payments for two years but it doesn’t cushion you from the financial hits you take in other areas – the corporate seats, the ticket sales, the programme sales, your commercial contracts.

“It’s right the way across the board and it’s hard to imagine that Newcastle, especially, will have prepared themselves for relegation from a business point of view.”

Informed opinion suggests they have not. While the majority of clubs involved in the relegation squabble have budgeted for the drop – Sunderland, for example, have written clauses into player contracts stipulating a 40 per cent wage cut in the event of demotion – Newcastle have spent money in the carefree manner of a European contender.

The club’s wage bill currently stands at an eye-watering £70m. While that will be eased by the summer departures of top-earners such as Michael Owen and Mark Viduka – who account for around 15 per cent of the bill – many of Alan Shearer’s squad were signed on lucrative, long-term contracts which have no break clauses.

The Tynesiders now face the grim prospect of somehow having to honour those deals while scraping for loose change in the Championship – the sort of doomsday scenario which eventually forced Leeds United, whose wage bill could only be funded by Premier League income, to call in the administrators in 2007.

“They say there’s pressure at the top at the moment but there’s much, much more at the bottom – especially when it’s clubs fighting one another to avoid relegation,” said Gerard Krasner, the former Leeds chairman who oversaw the club’s drop into the Championship in 2004 and now works as a business consultant.

“The trouble is the contracts you have, because you have to honour them. If you go down, a lot of your top players will want to leave, but it isn’t easy finding someone prepared to match their wages. If you have a player on £60,000-a-week, you might find nobody is prepared to pay that. They might only be willing to pay £30,000-a-week.”

The combination of diminished status, crippling debts and the gloom which inevitably envelopes a relegated club can be devastating and both Newcastle and Middlesbrough will have noted, with considerable anxiety, that the three clubs that dropped out of the Championship this season – Norwich, Southampton and Charlton – were all top flight sides as recently as 2005.

They join a lengthy list that includes the likes of Sheffield Wednesday, Nottingham Forest, Manchester City and Barnsley, all of whom have crashed into the third tier of English football after stints in the top flight in recent seasons. Of that group, only City, with their Abu Dhabi billions, can claim to have fully recovered.

“I think the big lesson everybody has to learn is that football has sold itself to money,” said Delia Smith, Norwich’s majority shareholder. “There is one big rich league and the rest of us have to scrabble around doing whatever we can in any way we can.

“Until somebody sits up and understands that, this is going to be the story of great football clubs like Norwich City, Charlton and others. This is going to be the sad story.”

Newcastle and Middlesbrough should pay heed to her warning. Whatever traumas they feel after tonight’s local tussle, the real pain is yet to come.