In the second of a three-part series examining the North-East's top football clubs, Business Correspondent Paul Willis looks at the highs and lows of life at Sunderland AFC.

The vagaries of David Beckham's ever-changing haircut aside, the widening gulf between the Premiership and the other divisions is perhaps the most talked about phenomenon in English football.

Revenues from TV coverage net clubs in the top division millions of pounds a year - domestic television contracts for 2001 through to this season were worth a massive £1.3bn.

That is to say nothing of the financial spin-offs Premiership status offers clubs.

Lucrative advertising endorsements from companies keen to be associated with a successful brand, extra TV revenues for European competition - the rewards can be huge for those willing to take the financial gamble.

But the outcome of a gamble is, by definition, unpredictable.

Leeds United are perhaps the most celebrated example of how the dream can turn sour.

Closer to home, Sunderland AFC experienced the financial woes of relegation two seasons ago. The club invested millions on signings and players' wages, only to see the team and business go into freefall as the club went down.

When I mentioned the "r" word at the start of our interview, club vice-chairman John Fickling gave me a weary look.

Sunderland's marketing and communications director Lesley Callaghan made a suggestion: "You might want to talk about something else - the relegation issue has been done to death."

However, it is ground that is worth going over again - if only to appreciate how far the club has come.

Three weeks ago, it announced its end of year results. Sunderland declared a loss of £1.2m, compared with £20.6m last year.

The club's debt has been stabilised at between £35m and £40m.

This is no mean feat, considering the financial consequences of relegation.

The club suffered a £10m loss in media revenue, resulting in a 33 per cent fall in turnover.

Former manager Peter Reid was heavily criticised for spending £18m on players who former chairman Bryan Sanderson said had added little or no value to the club.

With rising debts and poor performances on the pitch, Sunderland, which became a plc in 1996, de-listed from the Stock Exchange in August this year.

Cost-cutting measures, including cutting the wage bill in half and laying off nearly 100 staff, including 15 players, helped to reduce operating costs by more than £20m.

Mr Fickling said the financial climate for the football industry had changed in recent years.

He said: "The biggest change now from a few years ago is the attitude of the City towards the football business. It has fallen out of love with football and clubs have come to understand that unless you are a big global brand, like Manchester United, the advantages of being on the Stock Exchange are far out-weighed by the problems.

"We realised this and that is why we de-listed."

The fine line between success and failure in football, according to Mr Fickling, has forced clubs to adopt a more realistic, if perhaps less adventurous, approach.

"The experience of Leeds United was probably very sobering for lots of people in football," he said.

"They spent millions and ended up with nothing.

"If you look around now, you won't see many big transfer fees being paid. Clubs realise that over-extending yourself can have serious repercussions."

The modern phenomenon of big-name stars, with apparently more commitment to their endorsements than their football team, is being countered at Sunderland by the club's off-pitch activities.

Through corporate sponsorship deals with the local business community and educational projects, the club is hoping to create long-term sustainability for the team and the town.

The centrepiece of these activities is the Stadium of Light.

At the stadium, the club offers a segmented sponsorship and hospitality strategy, divided into four levels.

Main club sponsors Reg Vardy and kit sponsor Diadora occupy the top tier and the rest of the club sponsors are fitted into the remaining three levels, receiving rights and privileges according to the size of their financial commitment.

On match days, the club's corporate boxes host a range of visitors.

Last month, it also opened a learning facility at the ground.

Opened by the Countess of Wessex, the Centre of Light is the biggest educational facility of its kind at any club in the country.

The centre, which employs 35 staff, provides educational assistance to children and adult learners from the community.

As well as being an important resource for learning in the city, Mr Fickling said, the centre also makes perfect business sense.

He said: "The fact is, a lot of business today is keen to get involved with projects that require a level of social responsibility.

"This not only allows the club to give something back to the town, but helps it build up new business partners through tie-ins."

A lifelong supporter of the Black Cats, Mr Fickling's commitment to the team and the city is backed up by his ownership of a ten per cent stake in the club, and he is keen to see it play a role in attracting investment to the region.

Hence the announcement last week of plans for a £100m leisure complex next to the stadium, featuring the region's first super-casino.

He said: "Of course, our priority is getting back into the top flight. But we need to make this place a beacon for the city of Sunderland. Results are one thing, but this club has been around for a long time, and if it is to continue into the future, we need to build for the long-term."