The torture of relegation showed on the tear-stained face of David Gold, the co-owner of Birmingham City, but the real pain of falling out of the world's richest sporting league will be in the club's bank account. If the Barclays Premier League is a life of Ferraris and Dom Pérignon, the Coca-Cola Championship, which welcomes Birmingham, Reading and Derby County next season, is Ford Mondeos and the sponsor's fizzy drink.

The knock-on effects of relegation reach into every corner of a club: television money disappears, sponsors want to pay less, the best players want out and those who stay must brace themselves for smaller pay packets.

There is no guarantee of a quick return for the relegated clubs, even buoyed by a payoff, worth £23million, from the Premier League. West Bromwich Albion have managed to bounce back in the space of two seasons, but Southampton, Leicester City and, of course, Leeds United are among clubs who are proof that relegation from the top flight can be football's equivalent of falling off a financial cliff.

The Deloitte Sports Business Group calculates that the three relegated clubs will have their income slashed by a minimum of £20million each next season. Most of that is the lost share of Premier League money filled by broadcasting rights deals, worth £900million a year.

While Fulham, who earned their Premier League survival by the skin of their teeth, can expect to rake in £30million next season from the Premier League's broadcasting revenues, Birmingham, Reading and Derby can look forward to a maximum of about £1million of television money from the Football League. They will discover sponsors stop clamouring to pay big cheques, which is bad news for Reading, who are searching for a new shirt sponsor, while gate receipts will be affected if disillusioned fans stay away and refuse to buy season tickets, which could lead to a combined loss of another £3million next season.

Players who do not leave face a pay cut. According to Deloitte, average salaries in the Premier League are about £900,000, but in the Championship, they are £200,000.

The saving grace for all relegated clubs is the Premier League's “parachute payments”, two lump sums of £11.5million. But sometimes that money turns out to be fool's gold as clubs keep players on salaries they cannot afford, living as though the Premier League was on the horizon.

When they fail, they end up on the rocks. Leicester are expected to suffer record losses this year, having slithered from the top flight in 2004 and out of the Championship this season. There was no quick return to Premier League riches and, as a result, the club confessed that once their parachute payments were spent, the balance sheet started to glow red.