Lyon is heading to Ligue 2 for the first time in 35 years, after the DNCG rejected its appeal over unresolved financial shortfalls.
The seven-time Ligue 1 winners Lyon were relegated to Ligue 2 on June 24 after the Direction Nationale du Contrôle de Gestion (DNCG) deemed the club’s finances have not improved enough since a preliminary ruling last November.
The DNCG held a hearing with club owner John Textor and football director Michael Gerlinger, who attempted to persuade the regulator that Lyon’s finances had improved and asked for the preliminary action to be dismissed.
In November 2024, the DNCG issued a preliminary relegation to Lyon after the club amassed debts of up to €425m and were banned from signing new players in the January transfer window.
However, the DNCG ruled the club’s finances had not improved enough despite shortening its debts to €175m. In an attempt to reduce its debts, Lyon has sold a number of its players, including Rayan Cherki and Maxence Caqueret to accumulate funds. The club also released Alexandre Lacazette to offload money from its wage bill.
L’Equipe reported the Cherki sale to Manchester City for $49.3m (€42.5m) may not have met the deadline to hand over accounts and reports to the DNCG, with the club’s debts still standing at €175m at the time of submission, an estimate according to L’Equipe.
Under Article 11 of the DNCG, the body was able to take action against the club and subsequently ordered its relegation to the second-tier of French football for the first time since 1989.
Lyon shocked
Upon the news of Lyon’s relegation, the club issued a statement intending to appeal the decision, labelling the decision as “incomprehensible”.
“Olympique Lyonnais acknowledges the incomprehensible decision rendered by the DNCG and confirms that it will immediately file an appeal,” the statement said.
Last November, Textor hit back at the preliminary decision, demonstrating proof of funds in deposits of €60m. The club’s recent statement revealed Lyon’s boardroom “have worked closely with the DNCG, satisfying all of its requests with cash equity investments exceeding the amounts requested”.
“With so much cash liquidity demonstrated, and sporting success which has earned European competition in two consecutive years, we sincerely do not understand how one administrative decision could relegate such a great French club,” Lyon’s statement said.
“Through our appeal, we will establish our substantial cash resources as necessary for Olympique Lyonnais to keep its place in Ligue 1.”
What does this mean for Crystal Palace?
Over the last several weeks, Crystal Palace’s place in the UEFA Europa League had been thrown into jeopardy due to Textor’s 43% share in the Premier League club as it did not comply with UEFA regulations around multi-club ownership, with Lyon also qualifying for the competition next season.
Textor accepted a £190m bid from New York Jets owner Woody Johnson on June 19 to offload his stake in Crystal Palace effectively allowing the club to compete in the Europa League next season.
However, Crystal Palace missed the March 1, 2025 deadline to be able to prove it met UEFA’s multi-club ownership criteria. The club’s hierarchy is expected to hold talks with UEFA regulators in Switzerland to understand the status of its involvement in the Europa League.
Lyon even highlighted the share sale of Palace within its statement. The club shared that the “equity contributions of our shareholders and the sale of Crystal Palace, our cash position has improved significantly”.
The deal with Johnson has yet to be approved and processed by the Premier League, meaning Lyon will yet to be able to show proof of funds to the DNCG until this sale has been finalised.
