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Let’s be clear - Relegation could be our ruin!

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Over the course of the last several weeks I’ve heard a host of people argue that relegation will be good for our club. Their arguments have often been well researched, and their ideas are noble in their intent; however, they fail to recognise several factors that would hinder our ability to do well in the battlefield that is the EFL Championship.

Sunderland v Manchester United - Premier League Photo by Laurence Griffiths/Getty Images

Loss of Earnings

It’s a really obvious one: less money coming in means the club as a whole will have less direct capital to use and spend. Jobs will be lost across the club as the board will look to streamline in order to save on expenditure.

In general, this won’t necessarily have a an enormous impact on the players who will most likely be able to find another club willing to pay them silly money; instead the greatest impact will be felt by those working behind the scenes - it’s the run-of-the-mill folks who will suffer the most.

Furthermore, a loss of earnings will mean that the club will have to be more tactical in their transfer dealings. Will good players come to a recently relegated side who will struggle to offer them a lucrative deal in order to play for them? Perhaps, but that would be dependent on the manager and the vision the club are able to sell to any potential recruits - something we’ve struggled to do in the Premier League

How will we do that in the Championship? In all honesty, the loss of income from television money will have a largely detrimental impact to the club as a whole.

Sunderland v Swansea City - Premier League
It won’t be the players penny pinching should we be relegated, it will be the hard-working men and women who help to run this club.
Photo by Alex Livesey/Getty Images

Attempting to be Savvy

Let’s be frank: Sunderland have mismanaged their finances for the last 5-6 years. Ellis Short has appointed a series of inept figures in an attempt at making the club a profitable venture; unfortunately his appointments have managed to do the exact opposite of that.

Relegation certainly offers us the opportunity to wipe off a huge portion of our debt (largely owed to Mr. Short himself), but do we really trust the club at delicately managing a relegation? Yes, we’d bring in enough capital through TV money and parachute payments to wipe off a significant portion of those debts, but what good is that if we can’t carefully manage that money? Debt-less, but directionless: a great combination. Not.

Martin Bain seems like a competent enough man, but will he have the nerve and the guile to help stabilize what would be an incredibly turbulent time? Possibly not, especially if the club use their finances in an attempt at wiping debt from the books rather than assembling a young, hungry squad capable of returning to the Premier League. Do you think a chairman actively looking to sell the club would necessarily put the time, effort and resources into ensuring that happens?

Rotherham United v Sunderland - Pre-Season Friendly
Would Bain be able to manage the tempestuousness of a relegation? I don’t really want to find out.
Photo by Lynne Cameron/Getty Images

Fire Sale

I remember the 02/03 relegation painfully well. The talks of a financial black hole engulfing the club were harrowing whilst the sales seemed to be incessant. Sørensen, Craddock, Gray, McCann, Reyna, Kilbane, and Phillips were just a few of those who jumped a swiftly sinking ship. In came replacements like Jeff Whitley and Gary Breen - second rate to say the least.

I can envisage something similar happening this summer if we go down. The club will look to sell their most valuable assets whose fees will help rebuild a fractured squad, only there won’t be a quick fix; it will take time and patience - something the fans might not necessarily be willing to offer the club, especially after our recent, torrid past.

Off the top of my head I would imagine that a minimum of ten first team players could potentially leave in order to seek a fresh challenge (pay packet), or bring in some much needed cash. Pickford, Kone, Khazri, Ndong, Borini and Defoe would be a handful that you’d expect to leave, but in reality the list could go on and on depending how toxic the atmosphere is in the dressing room.

Ultimately, the manager - whoever that may be - will be faced with the task of assembling a squad of talented, hungry players determined to fight their way back to the bright lights of the Premier League within three years. I say three years because that’s how long the club will have the financial security of parachute payments for, and if we aren’t back by then... well then the club face a long and difficult road back to redemption.

Sunderland v Chelsea - Premier League
You would imagine that Jordan Pickford will be one of our most valuable assets should we go down, and in a way you have to feel sorry for the lad. Who’s to say he’d want to leave? Unfortunately, the club would need the capital that his sale would provide.
Photo by Laurence Griffiths/Getty Images

So Who Benefits?

Nobody really; although relegation could certainly make Ellis Short’s sale of the club a lot easier for all involved.

That’s not to say that selling a Premier League club would be difficult, in fact it would theoretically be a lot easier. Instead, it’s more the fact that another scramble to survival might give the American in charge hope that there’s more money to be made the next season should he hold back from properly investing in the team once more. Another 17th placed finish could earn the club and its owner a tidy sum of money, but is it worth another season of underwhelming distress?

Relegation would most certainly force Ellis Short’s hand into making a sale. Since Short took full control in May 2009 our league positions have been the following: 13th, 10th, 13th, 17th, 14th, 16th, 17th. One season of top half football whilst squandering well over £70 million in the process. Shocking isn’t the word.

Take a further look into our debts and it’s clear to see that we aren’t doing well. We rely on Ellis Short to provide cash for player purchases because we simply don’t generate any other real income, and that which we do (TV Money) is spent on player wages which account for well over 70% of our spending.

It’s grim, but Short hasn’t exactly gifted us this money. Of the £160 million loaned to us, £100 million has been capitalized, meaning that cash can only be redeemed upon Short selling the club.

That serious sum of money owed to Short is also backed by over £83 million owed to a private bank called, Security Bank Corporation, a bank we owe around £6 million to every year via interest. Shocking figures.

I do find it intriguing that Short has made his billions from working in the murky world of private equity - more specifically distressed real-estate assets bought in order to sell on at a profit. Subsequently, I do have a lingering concern in the back of my mind that our current debt-ridden state closely resembles the criteria required to interest Short’s financial skill set.

Sunderland v Chelsea - Premier League
Short quite simply hasn’t taken this club in the right direction.

Conclusion

Flirting with relegation has always been a risky gamble, but to be relegated now in Sunderland’s current financial condition would be a real concern. Many fans will point to Burnley and Newcastle as recent examples of how to successfully manage a relegation, but in reality those clubs are in a totally different situation than our own.

Burnley’s frugal approach to life in the Premier League before relegation, and clever financing in the interim, allowed them to return a stronger outfit. Newcastle meanwhile have utilised the money accrued from the sales of Moussa Sissoko and Georginio Wijnaldum for over £50 million as a war chest to attempt to buy instant promotion.

Sunderland, however, would by no means guaranteed an immediate return. An uninterested chairman, crippling debts and a squad that would be torn apart through sales spells a recipe for disaster. Relegation quite simply isn’t a good option for us, not now at least. Should we be relegated, the best case scenario we can hope for is to clear the majority of our debts and find a group of hungry, young players willing to play for the badge as well as the pay packet.

For me, it’s a no-brainer: Sunderland can’t afford to be relegated this season, and if we are... well pray for the club to finally find someone capable of bringing stability to our sinking ship because as of right now, we’re on a perilous journey that looks bleaker as the weeks pass by.