I just watched the 2nd episode of "Losers" on netflix, which tells the story of Torquay United's bid to avoid relegation in 1987.

They explained the relegation system, and that Torquay United was in a "system" of something like 4 leagues - the champion of the lesser 3 leagues were promoted to the league above while the last place team of the top 3 leagues were relegated to the league below. Simple enough. They said that Torquay United was in the least of the 4 leagues, and had finished last in the league in both 1985 and 1986, but 1987 was the first year of "automatic relegation". They kept saying that if Torquay finished at the bottom of the league again in 1987, the team would be finished. They would close up shop, and there would be no more football in the town of Torquay. My confusion (and I've gone back and watched this section a couple of times) is that they make it sound like the potential end of the club was because of the automatic relegation system implemented in 1987. It sounded like they were saying that if you're the last place team in the bottom league, automatic relegation means you're done and they'll find another club in some other town to take your place the following year.

That doesn't seem right to me, and I'm guessing that it was the owners of the team that were saying "enough - finish in last place again and I'm cutting my losses" and not the rules of the league itself. But that isn't what the show said.

So, if you're familiar with the whole relegation system, especially how it worked when first implemented back in the 80s, is/was there some kind of rule for what happens to the last place team of the bottom league? Is/was there no penalty associated with finishing last, or are/were you indeed relegated out of existence?