What impact will Sunderland's relegation to League One have on the city's economy?

Sunderland's second successive relegation is a massive blow to the club and its fans.

Monday, 23rd April 2018, 6:00 am
Updated Monday, 23rd April 2018, 8:31 am
Sunderland AFC badge, Murray Gates, Stadium of Light.

But with the club such a huge part of the city and its self-image, what will the Black Cats falling into the third tier for only the second time in their history mean for Sunderland as a whole – economically and in terms of civic pride?

Professor Lawrence Bellamy, Dean of the Faculty of Business, Law and Tourism at the University of Sunderland, said the football club would be better equipped than many businesses to cope with the financial impact of a second relegation.

Sunderland University Professor Lawrence Bellamy

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“A saving grace for Sunderland AFC is the ongoing revenue stream of the ‘parachute payments’, around £33million in 2018-19 and £15million the year after,” said Prof Bellamy.

“Not too many businesses can be sure that they have money coming in that far ahead.

“Although there are some reductions due to broadcasting and other revenue accruing, these are much smaller than the parachute offset season to season.

“Whilst gate receipts are also likely to be down a little, there will always be a loyal fanbase attending.

Natasha McDonough

“Not all businesses can withstand such significant challenges, but football clubs are hardy due to the backing of fans, the passion (and pockets) of investors and support of the local community.

“So at least the fans will still have an opportunity to see them perform and psychologically it may be better for spectators to see winning in League One rather than losing in the Championship?”

Sharon Appleby, director of Sunderland Business Improvement District, said it was important to remember that while the club was a massive part of Sunderland’s culture, it was a piece of a wider economic picture.

“It’s obviously sad news for fans and for the city if SAFC is relegated, but we have to also look at the wider picture of the many great things that are happening in Sunderland.

Sunderland Bid, Sharon Appleby

“The club is a massive part of Sunderland, but it is just that – a part – and the other parts will continue to operate and grow and hopefully help us maintain a healthy, local economy and create reasons for people to live, work and visit here.

“At the same time, we can also hope that this will only be a short-term state of affairs for the club and that the next season will see them back on top.”

Natasha McDonough, chairwoman of the North East England Chamber of Commerce’s Sunderland committee, is urging fans to get behind the team in League One for the sake of the city.

“Not long after I moved to Sunderland ten years ago, we had a building firm working on the house,” she said.

Julie Elliott

“The owner of that business mentioned to me that he loved it when Sunderland won as it meant that his lads came into work buzzing on Monday.

“While relegation has an economic impact on the city and the region, it goes much further than that.

“It’s about being part of a city that’s on the up, that’s literally buzzing, just like those lads on a Monday morning.

“That spirit goes through every type of business in the city. Not just those involved with the club, but those of us who have staff that want to feel positive about their city, their club.

“When anyone’s winning, you get a natural boost. Call it endorphins, call it a sense of city pride, but it all boils down to the fact that we’re all much more productive when we’re happy.

“I see that spirit in my eight-year-old boy – a hardy season ticket holder, disappointed on cold Saturdays after defeats. His loyalty is admirable.

Coun Mel Spedding

“When he did see two home wins, I saw him take that determination and positivity into his week.

“Let’s not let the next generation of supporters down. It has to be about confidence next season.

“A fighting spirit. We’re a city of people with enormous soul, drive and determination, so let’s bottle that and get them back up.”

Sunderland-born Centre for Cities economist Paul Swinney is a lifelong Black Cats fan: “While Sunderland’s relegation to League One spells bad news for the club and its supporters, it’s not likely to have a big impact on the city’s economy,” he said.

“Yes, the club pulls in many thousands of visitors each year, that no doubt spend many thousands of pounds on match tickets and in local pubs and hotels.

“But the drop-off in attendances will likely be nowhere near as great as it has been after relegation from the Premier League.

“And while this spending is vital to pubs around the ground, it plays a fairly small role in the city’s economy.

“In total, hotels, restaurants, pubs and other similar businesses contribute 13% to Sunderland’s economy each year. Matchday-related spending (which takes place 23 days of the year) is likely only to be a small fraction of that.

“It’ll likely be a similar picture for the number of jobs at the football club. It’s likely that fewer staff will be employed. Again, this will be terrible news for those directly affected. But it will have little impact on the wider economy.

“The club is high profile, a name recognised well beyond these shores. But it’s role in the economy is small in comparison.

“To put more money in the pockets of Sunderland’s residents, irrespective of what league its football team is in, the city needs to attract higher-skilled, better- paid jobs. This needs to be the central focus of the city council, its partners and central government.”

Sunderland Central MP Julie Elliott said: “It is devastating for the city and anyone with a connection to Sunderland AFC that the club have been relegated for the second successive season.

“I hope new owners take over the club soon, who share the fans’ passion and ambition and get the club back to winning ays at the earliest opportunity.”

City council cabinet secretary Coun Mel Speding said: “As a football fan, it is clearly disappointing. I feel heartily sorry for the amazing fan base that Sunderland AFC has.

“They have supported Sunderland through think and thin and now we are in another thin period.

“We should not forget this is not the first time that has happened and hopefully Sunderland will be as resilient as the city has been and bounce back.

“My commiserations go to the fans who have steadfastly followed the club over the years.”

Sunderland University Professor Lawrence Bellamy
Natasha McDonough
Sunderland Bid, Sharon Appleby
Julie Elliott
Coun Mel Spedding