Economy warning after relegations

Business leaders said the clubs' loyal fans will stand them in good stead

The economy of the North East will pay a heavy price for the relegation of Newcastle and Middlesbrough, a football finance expert has warned.

Prof Tom Cannon, of Liverpool University, said a minimum loss to the economy would be £50m.

But he warned the overall impact could be hundreds of millions of pounds.

But regional development agency One North East said while the relegation of the two clubs was a blow, the economy did not just depend on them.

Prof Cannon, professor of strategic development at Liverpool University's school of management, told BBC Radio Five Live a minimum of £50m would come out of the North East economy.

He said much of the money would have stayed and recirculated and so there would be an impact on everything from construction to catering as well as the region's image and profile.

Lack of confidence

He said: "As a minimum you are talking about £50m coming out of the regional economy at a time when it's depressed anyway.

"If you look at the kind of figures which we have done which look at the way that money recycles we would be talking of about £100m coming out of the regional economy - most of that concentrated on the Newcastle Gateshead area.

"And of course that doesn't take into account the effect that lack of confidence, lack of self belief has on everybody from entrepreneurs to regional developments and government people so I think you are talking about not tens but hundreds of millions."

But he said if the teams managed to bounce straight back into the Premier League, the damage to their global profile might not suffer too much.

One North East chief executive Alan Clarke said the clubs had dealt with relegation in the past and he was confident they would bounce back and their loyal fan bases would stand them in good stead.

He said he was confident the breadth and depth of the region's economy would stand it in good stead.

"All three clubs are important to the economy and profile of the North East and that will continue," he said.

"There are still many reasons to be positive about the North East, not least the performance of some of our businesses during the recession."