French club Lyon has been officially relegated to Ligue 2 due to the poor condition of their finances. The DNGC, the financial watchdog for professional football in France, had initially imposed a provisional demotion in November. After a final hearing on Tuesday, club representatives, including majority owner John Textor, failed to present a convincing case for reversing the decision.
Last October, Eagle Football Group, which holds a 77% share in Lyon, disclosed a debt of £422 million. The club described the ruling as “incomprehensible” and confirmed their intention to lodge an appeal. Lyon argue they have met all financial obligations and claim the outcome undermines their recent on-pitch success.
Crystal Palace’s European hopes in limbo
Lyon’s relegation could have significant consequences for Crystal Palace, who qualified for next season’s Europa League by winning the FA Cup. Under UEFA rules, clubs owned or controlled by the same entity cannot compete in the same European competition. Both Palace and Lyon fall under Textor’s multi-club ownership model, which has raised regulatory questions.
Although Textor reportedly agreed to sell his 43% stake in Palace on Monday, UEFA rules prioritize the team with the higher domestic finish – in this case, Lyon, who placed sixth in Ligue 1. If Lyon’s relegation voids that finish, Palace could retain their place in the Europa League. However, the south London club is still waiting for official confirmation.
Officials at Palace remain cautious. While Lyon’s demotion raises optimism that the club’s sixth-place position is no longer valid, any final ruling depends on French football authorities and UEFA’s interpretation. There is also concern Lyon may pursue further legal action if their appeal fails, delaying a resolution.
Lyon plan to fight ruling amid player sales and exits
To address financial pressures, Lyon sold key players, including Maxence Caqueret and Rayan Cherki, and released high earners like Alexandre Lacazette and Anthony Lopes. These moves reportedly raised about £45 million and reduced salary obligations. Despite these steps, the DNGC was not persuaded that the club’s financial restructuring was sufficient to warrant remaining in the top flight.
Lyon emphasized in their statement that additional capital was raised through shareholder investments and the agreement to sell Textor’s stake in Crystal Palace. They assert that the funds now in place are adequate to meet requirements for the 2025–26 season.
The club, which last played in Ligue 2 in 1989 and reached the Champions League semi-finals in 2020, has vowed to pursue every legal option to overturn the ruling. Should the decision remain unchanged, Reims – beaten by Metz in the play-offs – would be promoted to fill Lyon’s place in Ligue 1.
