Olympique Lyonnais, once the crown jewel of French football, has suffered a dramatic and unprecedented fall from grace. On the heels of years of financial missteps and mounting debt, the Direction Nationale du Contrôle de Gestion (DNCG)—France’s financial watchdog for professional football—has confirmed Lyon’s relegation to Ligue 2. This decision comes after a series of urgent meetings, failed assurances from the club’s ownership, and ongoing scrutiny into the financial operations of John Textor’s Eagle Football Group.
This forced demotion is more than a domestic embarrassment. It reverberates across Europe, complicating UEFA’s regulatory frameworks and casting uncertainty on Crystal Palace’s European qualification. With both clubs tied to the same ownership structure, and only one allowed to participate in UEFA competitions under its rules, Lyon’s fate directly impacts the Premier League side’s hopes of competing in the Europa League next season.
Lyon have been relegated to Ligue 2 due to financial issues.
— B/R Football (@brfootball) June 24, 2025
The club can still appeal this decision. pic.twitter.com/ICs3ABejkJ
Lyon’s Financial Meltdown: From Champions League Semis to the Second Tier
Lyon’s troubles did not materialize overnight. The club, which enjoyed a golden era from 2002 to 2008—securing seven consecutive Ligue 1 titles—has been in financial decline for years. The situation reached a critical point in October, when Eagle Football Group, Lyon’s controlling shareholder, disclosed debts amounting to £422 million.
Despite efforts to rectify the balance sheet, the DNCG ruled the measures insufficient. Lyon’s financial strategy included the January transfer of midfielder Maxence Caqueret to Como and the high-profile June sale of Rayan Cherki to Manchester City, collectively generating around £45 million. These transactions were accompanied by a purge of high earners, including Alexandre Lacazette and Anthony Lopes. Even with these efforts, the club could not convince the DNCG that their long-term financial stability was assured.
In a strongly worded statement, Lyon criticized the decision as “incomprehensible,” asserting that they had provided proof of financial recovery through recent capital injections and equity restructuring. Nevertheless, the DNCG remained unconvinced, enforcing a punishment that not only drops Lyon into Ligue 2 but also erases their sixth-place Ligue 1 finish—eliminating their Europa League qualification spot.
Multi-Club Ownership and UEFA’s Rulebook: A Complicated Web
At the center of this drama is John Textor, the American entrepreneur behind Eagle Football Holdings. Textor holds controlling interests in multiple football clubs, including:
- Olympique Lyonnais (France)
- Crystal Palace (England) – 43.9% stake
- Botafogo (Brazil)
- Molenbeek (Belgium)
While UEFA has tolerated a growing trend of multi-club ownership, it strictly prohibits two clubs under “significant influence” from the same individual or entity from participating in the same UEFA competition. This regulation exists to preserve sporting integrity and prevent conflicts of interest.
Both Lyon and Crystal Palace had qualified for the Europa League—Lyon through their Ligue 1 finish, and Palace by winning the FA Cup. Under normal conditions, Lyon’s higher domestic placement would take precedence. But with the French club now relegated and their top-six finish potentially voided, Crystal Palace may claim the spot—pending UEFA’s interpretation of the situation.
Crystal Palace Caught in the Crossfire
For Crystal Palace, Lyon’s relegation could be either a blessing or a bureaucratic nightmare. While their FA Cup triumph had earned them a long-awaited entry into European competition, their participation remains under threat because of UEFA’s multi-ownership scrutiny. Palace argue that Textor holds no operational control at Selhurst Park, positioning his 43.9% stake as passive investment rather than executive authority.
Despite this, UEFA is expected to examine the extent of Textor’s influence carefully. Any perceived overlap could lead to disqualification or forced restructuring of ownership before Palace can be confirmed as a Europa League participant. The delay in finalizing these decisions hampers Palace’s preseason planning, squad development, and European travel logistics.
Even if Lyon’s appeal fails and their relegation is upheld, UEFA may still rule against Palace depending on how it evaluates the ownership ties. If Palace are deemed ineligible, the team next in line—possibly Nottingham Forest—could take their place in the competition.
Lyon’s Appeals and Legal Roadmap
Lyon have already signaled their intent to challenge the ruling. The club maintains that recent financial restructuring, including capital injections from shareholders and the planned sale of Textor’s Palace stake to New York Jets owner Woody Johnson, has significantly improved its liquidity. In their public statement, the club stressed that their financial conditions are now sufficient for Ligue 1 compliance.
Their appeals process will first go through the DNCG’s appeals commission. If that fails, Lyon may escalate the case to the Comité National Olympique et Sportif Français (CNOSF) or pursue litigation before the Administrative Court. These layers of appeal could potentially delay the final decision for weeks, if not months—keeping both Lyon and Palace in a state of limbo.
This protracted uncertainty weighs heavily on both clubs’ summer strategies. Lyon face the possibility of restructuring for a season in Ligue 2—far removed from the Champions League nights of just five years ago. Palace, meanwhile, await confirmation of their European adventure, which would mark a historic achievement for the South London club.
Broader Implications for French Football
Lyon’s demotion serves as a stark reminder of the DNCG’s authority and the growing volatility within French club finances. Just last year, six-time champions Bordeaux were demoted to the fourth tier after failing to meet financial criteria. Lyon’s relegation underscores that no club, regardless of historical success or brand prestige, is immune to the rules.
The case may also prompt closer scrutiny of foreign ownership models in Ligue 1. With American investors acquiring stakes in clubs across Europe, regulatory bodies must adapt to complex ownership webs that cross borders and raise questions about operational control, transparency, and competitive fairness.
For Ligue 1, the loss of a major draw like Lyon is a reputational blow. The club not only boasts one of the country’s most extensive fan bases but also plays a pivotal role in talent development. The relegation of such a powerhouse alters the dynamics of the league, both financially and competitively.
The European Domino Effect
The consequences of Lyon’s relegation stretch beyond domestic borders. UEFA must now determine how to enforce its ownership rules fairly while respecting both sporting merit and legal clarity. The organization is under pressure to rule swiftly, as clubs begin their preseason campaigns and prepare for European qualification rounds.
Possible scenarios include:
- Lyon’s appeal is successful: The club is reinstated in Ligue 1 and retains its Europa League slot, possibly displacing Palace.
- Lyon’s appeal fails and their sixth-place finish is voided: Palace claims the Europa League spot.
- UEFA finds both clubs ineligible due to ownership conflicts: The spot passes to the next eligible club, such as Nottingham Forest.
Whatever the outcome, this saga could set a new precedent for UEFA’s approach to multi-club ownership, especially as more investment firms diversify their football portfolios across continents.
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🚨 OFFICIAL: Olympique Lyon have been relegated to Ligue 2.
— Fabrizio Romano (@FabrizioRomano) June 24, 2025
The club has the possibility to appeal the decision. pic.twitter.com/T4UKbqYQBV
Conclusion
The demotion of Olympique Lyonnais is not merely a story of financial collapse—it is a litmus test for the governance structures of modern football. As wealth concentrates and ownership models become more intricate, the need for robust, transparent oversight grows ever more critical.
Lyon, once the embodiment of success in French football, must now fight to restore its credibility and return to the elite. Crystal Palace, in contrast, must navigate an opaque regulatory maze in hopes of tasting European glory for the first time.
This is not just a story of relegation or qualification. It is a cautionary tale about ambition outpacing accountability, and a turning point that could reshape the landscape of European football ownership for years to come.
