Coventry City Interim CEO Tim Fisher has said relegation has reduced the club's revenues by half.
Demotion to League One has meant that City now only receive £800k from the PL, FL etc rather than the £4m they received as a Championship club and the new Financial Fair Play rules which are coming in and mean that a club can only spend 65% of its income on players wages, will make things a lot tougher.
Speaking to the CT's Andy Turner as part of a Question And Answer session, Mr Fisher said: "The financial impact of relegation to League One has been to reduce the club’s revenues by half – virtually overnight. In addition, the Football League’s new Financial Fair Play rules mean that clubs can only spend up to 65 per cent of annual turnover on players’ salaries.
"When you consider that our player wage bill for last season would now be several millions of pounds more than our entire anticipated annual turnover in League One then the real extent of our financial challenge becomes obvious.
"As a consequence, and to ensure we can comply with the new rules facing all clubs, reducing our overall costs, significantly reducing our player wage bill, urgently seeking new revenue streams, and securing a new stadium deal, are all imperative in order for us to survive and to stabilise the club for the future.
He has urged City supporters to be realistic about the club bouncing back at the first attempt and said: "Nothing’s impossible but, given the numbers I have outlined and the challenges we now face, we must all be very realistic about the likelihood of the team bouncing straight back to the Championship at the first attempt.
"Of course, all of our immediate feelings and reactions to relegation revolve around prioritising getting back to the highest possible level as quickly as we can.
"Ideally, this would be at the first time of asking but it would be wrong for anyone to promise a play off spot or promotion at any time let alone when the club has been through such a torrid time.
"Of course we want our team to be competitive – and, like our fans, we want the team back playing at the highest possible level as soon as it is practical – but our immediate priority has to be to survive, to stabilize the club, and to agree a sustainable plan for the future.
"From those much firmer foundations, we can then rebuild and look ahead to brighter things. "