French football giants Olympique Lyonnais have been officially relegated to Ligue 2 following a damning financial ruling by the DNCG, the body responsible for monitoring the accounts of professional clubs in France.
Despite efforts to shore up their finances and a last-ditch meeting with DNCG officials, Lyon failed to convince the regulatory authority that their economic situation was sufficiently stable to retain their place in the top flight.
The relegation represents a dramatic fall from grace for one of France’s most decorated clubs, with seven consecutive Ligue 1 titles between 2002 and 2008 and a Champions League semi-final appearance as recently as 2020. The last time Lyon played in the second division was in 1989.
In a strongly worded statement, Lyon labelled the DNCG’s decision “incomprehensible” and announced their intent to appeal.
The club claimed it had made substantial progress in meeting the DNCG’s demands, including generating roughly £45 million in player sales and parting ways with several high earners, such as Alexandre Lacazette and Anthony Lopes.
“With proven funds and sporting success that has earned us a place in European competition for two consecutive years, we sincerely do not understand how an administrative decision could relegate such a major French club,” the club said.
Lyon’s American owner, John Textor, who also holds stakes in Brazilian club Botafogo and, until recently, English Premier League side Crystal Palace, had previously insisted the club was financially sound.
“We have made a variety of investments in recent weeks,” Textor said before Tuesday’s meeting with the DNCG. “Everything is good financially.”
Yet, the DNCG was unconvinced. At the heart of its concerns are the club’s towering debts. Last October, Eagle Football Group, Textor’s holding company that owns a 77% stake in Lyon, disclosed debts of £422 million.
Despite claims of “significant improvement” in cash flow, the DNCG upheld its initial November ruling that the club would be demoted unless drastic financial progress was made.
Palace’s European Fate Uncertain
While the shockwaves from Lyon’s demotion are being felt across France, they are also reverberating in south London, where Crystal Palace are nervously watching the unfolding drama.
The Premier League club qualified for the Europa League after a triumphant FA Cup campaign. But Palace’s participation remains in limbo due to UEFA’s strict rules on multi-club ownership.
According to UEFA regulations, no two clubs under the “decisive influence” of the same entity can compete in the same European competition.
With Textor’s Eagle Football Holdings holding a 43.9% stake in Palace and a majority stake in Lyon, the situation presented a potential breach.
Initially, Lyon’s sixth-place finish in Ligue 1 for the 2023-24 season would have seen them take precedence over Palace due to their higher domestic league ranking. But with the DNCG confirming their relegation, Lyon may now forfeit that European place altogether — a move that could clear the path for Palace to enter the Europa League.
However, the situation remains complex. Palace are reportedly still awaiting clarification from UEFA on whether Lyon’s European qualification has been nullified due to their demotion.
If it is, and UEFA accepts that Palace are no longer in breach of multi-club ownership rules, the south London side could proceed with preparations for their first campaign in European competition.
“There remains an air of caution at Palace,” said Sami Mokbel, Senior Football Correspondent. “Even if the French football authorities confirm Lyon’s points total and final league position are void, there’s still uncertainty about whether the appeal will delay the consequences or override them entirely.”
An Appeal Looms — And With It, Delays
Lyon’s confirmed appeal could complicate the timeline for a definitive decision. The French club argues it has met all requirements set by the DNCG and that equity investments now exceed the necessary thresholds.
In their statement, they emphasized that the sale of Textor’s stake in Crystal Palace to New York Jets owner Woody Johnson would further boost their solvency.
“Thanks to capital injections from our shareholders and the sale of Crystal Palace, our cash flow has significantly improved and we now have more than sufficient financial resources for the 2025-26 season,” the club said.
If the appeal is accepted and Lyon are allowed to remain in Ligue 1 pending the process’s completion, UEFA may also delay any final ruling regarding European qualification.
This would leave both Lyon and Palace in prolonged uncertainty. There are also concerns that the appeal could extend beyond the UEFA registration deadlines, putting both clubs at risk of missing the Europa League altogether.
Complicating matters further is the position of Nottingham Forest, who could potentially replace Palace in Europe if UEFA rules that Palace remain in breach due to overlapping ownership.
While Palace have insisted Textor has no “decisive control” at Selhurst Park, Forest are closely monitoring developments and may challenge any UEFA decision that favours the London club.
Broader Implications in France
Lyon’s relegation underscores the growing financial scrutiny faced by clubs in France’s top tiers. Last year, six-time Ligue 1 champions Bordeaux were forcibly relegated to the fourth tier after declaring bankruptcy, losing their professional status entirely.
The DNCG’s stringent policies are credited with maintaining relative financial order in French football but have come under criticism for lacking flexibility in high-profile cases.
Critics argue that demoting a historic club like Lyon, with recent success on the pitch and plans for future solvency, could weaken the overall image of Ligue 1.
If Lyon’s appeal fails, they would be replaced in the top division by Reims, who had lost the relegation play-off against Metz but would benefit from the administrative reshuffle. For French football traditionalists, the idea of a Ligue 1 season without Lyon is difficult to fathom.
Waiting Game for Palace
For Crystal Palace, the next few weeks will be crucial. If Lyon’s relegation is upheld and UEFA rules that no conflict exists, Palace could finally begin planning for their historic entry into European football.
But with appeals and regulatory hurdles still ahead, the club is treading cautiously. There had been hope that Palace would receive clarity on their Europa League status by the end of the week. That now appears unlikely.
Until the appeals process concludes and UEFA makes a final ruling, Palace, Lyon, and even Nottingham Forest are all caught in a complex web of legal, financial, and sporting uncertainties — with European dreams hanging in the balance.
