IMAGINE, if you dare, the apocalyptic scenario of having your annual income slashed in half while at the same time seeing your expenditure fall by a miniscule amount.

Oh, and one more thing: you're already deep in the red when your revenue is reduced by 50 per cent.

It's a journey, of course, that would leave those unfortunate enough to embark upon it staring financial ruin full in the face.

Debts would rise, creditors would become impatient, and the situation would soon become unsustainable. Bankruptcy could follow.

Put yourself in the position, therefore, of a senior figure at Sunderland as the Nationwide League looms large, like football's Grim Reaper, casting a giant shadow over the grisly end of their Premiership tenure.

Having reported a £25m deficit at the end of last year, Sunderland could not have chosen a more inopportune time to fall out of English football's elite, as they surely will this season.

But as they contemplate life in the First Division after this, the most disastrous of campaigns, their problems might just be beginning.

All three clubs relegated from the Premiership last year - Leicester City, Ipswich Town and Derby County - were plunged into an uncertain financial future when they lost their top-flight status.

When Ipswich went into voluntary administration three weeks ago, one of the creditors were St John's Ambulance.

Bradford City, who went down in May 2001, flirted with liquidation and the subsequent closure of their club after amassing debts of £36m that left them saddled with negative equity.

Sheffield Wednesday only avoided financial meltdown by selling their training ground, but that has not saved them from a likely relegation to the Second Division.

Little wonder, then, that Dr Bill Gerrard, a specialist in sports finance based at Leeds University, is the bearer of bad tidings for the Black Cats.

"I can't offer many words of optimism to Sunderland," he said.

"The good news for them is they've got a manageable level of debt; they haven't been profligate.

"But they will be facing up to a 50 per cent loss in revenue and little chance of reducing their costs, other than to sell one or two of their best players."

And, of course, with the transfer market having collapsed - as Leeds United will readily testify - so the value of Sunderland's squad has fallen.

Kevin Phillips was rated in the £10m-plus bracket a couple of years ago; Sunderland would be lucky to receive half of that amount now.

The departure of Thomas Sorensen, too, would not raise the sort of cash that it would have done when the Black Cats were the top dogs in the North-East.

And as Dr Gerrard pointed out: "When clubs that go down dismantle their squads, it's the best players who go.

"Any business would feel a crunch if you took out 50 per cent of their revenue.

"The only way you can reduce costs is by getting rid of players. But the teams that have generally done well are those that have run a relatively tight ship and only lost one or two players.

"The teams that go down are still the strongest in the First Division in terms of revenue because of the parachute payments. But they typically have financial problems because they cannot sustain the high wages.

"Ultimately, you have to get it right on the field.

"Clubs have shown they can battle back, but other clubs have had to offload their better players and they've ended up playing kids or journeymen from the lower divisions. For every club like Leicester that has done really well, there is a club like Sheffield Wednesday or Queens Park Rangers.

"And with no transfer market to facilitate sales of players to Premiership clubs for 12 months of the year any more, it makes it even more difficult."

The adage that a spell in the First Division can be beneficial to a club is no longer applicable, purely because of the huge gulf in income that is received by Premiership and Nationwide League sides.

"The financial penalty of relegation now is massive; in fact, the gap has become too big," Dr Gerrard added.

To alleviate their impending problems, Sunderland could become the latest club to go down the well-trodden path of securitisation.

Such a move entails taking out a large loan - £50m is the figure mooted in the Black Cats' case - to cover for the inevitable shortfall in income that would accompany relegation.

Leeds used this method to bankroll their ambitious assault on the Premiership and Champions League; their bitter experience shows how securitisation can backfire.

Dr Gerrard said: "I can see the logic of securitisation in Sunderland's case but it's a high-risk strategy.

"If Sunderland did that, they'd effectively be mortgaging the next 25 years against a short-term gamble of getting back into the Premiership.

"It's a gamble because things can be even worse down the line. If you don't get back very quickly, you can get caught up in a very vicious circle.

"But Sunderland have a couple of things going for them. They've got the stadium complete, so in a sense they've got scope that other clubs haven't got to borrow long-term to try to tide them over in the short term.

"Leicester financed their new stadium by securing the loan against the stadium.

"Their gate receipts go straight into an account that the club cannot touch until they have enough money to pay off what they owe.

"If it went wrong, Leicester knew they could lease the stadium back, which they do from an American pension company.

"Securitisation would give Sunderland the chance to stabilise and get back into the Premiership.

"From the lenders' point of view, Sunderland are an attractive team because they would still have a reasonably loyal fan base in Division One.

"They would do the calculation of their borrowing on the minimum number of season tickets they would sell.

"Sunderland, with a £25m debt, have got the potential to borrow the amount of money they would need. That debt is not huge when you compare it with Leeds, Chelsea and Newcastle.

"The alternative to securitisation is if you offload one or two players, but you're not going to see much in the way of top money for players like Kevin Phillips.

"Everyone knows Leeds are in a distressed position, which is why Newcastle waited until just before the transfer window closed before they moved in for Jonathan Woodgate."

The possibility of negotiating a securitisation package has been considered by Sunderland, though they are at pains to point out that they are still mulling over a number of options.

A Stadium of Light spokesperson said: "We are always looking at various financing alternatives and, like most Premier League clubs, have had discussions with a number of people on all types of transactions, including securitisation.

"If we were to be involved in any such deal, it would be announced when completed and through the proper Plc channels."