Lyon Relegated to French Ligue 2 Over Financial Issues

Seven-time French champions Olympique Lyonnais have been demoted to the second-tier Ligue 2 after failing to convince France’s football financial watchdog, the DNCG, of their economic stability.

The DNCG, which oversees the accounts of French professional clubs, upheld a provisional demotion handed down in November. Lyon officials, including owner John Textor of Eagle Football Group, met with the body on Tuesday but were unable to provide sufficient guarantees to have the punishment lifted. Last October, Eagle Football Group announced debts of £422 million.

In a statement, Lyon called the decision “incomprehensible” and confirmed they would launch an immediate appeal.

“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 Lyon statement read. “We will appeal to demonstrate our ability to provide the necessary financial resources to guarantee OL’s place in Ligue 1.”

Lyon, who reached the Champions League semi-finals as recently as 2020, have not played in France’s second tier since 1989. In an effort to improve their finances, the club recently sold Maxence Caqueret to Como and Rayan Cherki to Manchester City, while also releasing high earners like Alexandre Lacazette.

Should the appeal fail, Lyon will be replaced in the top flight by Reims, who lost the relegation play-off at the end of last season.

The decision has significant potential consequences for Crystal Palace’s hopes of competing in next season’s UEFA Europa League. Both Lyon and Palace, who qualified for the competition, are part of Textor’s Eagle Football multi-club ownership structure. UEFA rules prevent two clubs under the same ownership from competing in the same tournament, with the higher-finishing league team—in this case, Lyon—typically taking precedence.

While Textor agreed to sell his 43% stake in Palace on Monday, the deal is not yet complete. Lyon’s relegation could simplify the matter for Palace, though the situation remains uncertain pending the outcome of Lyon’s appeal process, which could be lengthy.

This administrative demotion follows a similar case last year where six-time champions Bordeaux were relegated to the fourth tier due to bankruptcy.