In a stunning blow to one of French football’s most storied clubs, Olympique Lyonnais has been relegated to Ligue 2 following a decision by the Direction Nationale du Contrôle de Gestion (DNCG), the body overseeing the financial health of French professional football clubs.
The demotion, confirmed on Tuesday, stems from Lyon’s ongoing financial struggles, with the club failing to convince the DNCG that its fiscal situation had stabilized since a provisional relegation was announced in November.
Lyon, seven-time French champions between 2002 and 2008, expressed shock at the “incomprehensible” ruling and vowed to appeal. The club’s owner, John Textor, whose Eagle Football Group holds a 77% stake in Lyon, revealed last October that the club was grappling with debts of £422 million.
Despite efforts to stabilize finances, including raising £45 million through the sales of Maxence Caqueret to Como and Rayan Cherki to Manchester City, and releasing high earners like Alexandre Lacazette and Anthony Lopes, the DNCG deemed the measures insufficient.
“We sincerely do not understand how an administrative decision could relegate such a major French club,” Lyon said in a statement. “We will appeal to demonstrate our ability to provide the necessary financial resources to guarantee OL’s place in Ligue 1.”
The club emphasized recent capital injections and the sale of Textor’s 43% stake in Crystal Palace to New York Jets owner Woody Johnson as evidence of improved cash flow.
Lyon’s drop to Ligue 2 may secure Crystal Palace’s place in next season’s Europa League. UEFA’s multi-club ownership rules, which prevent teams under the same ownership from competing in the same European competition, had put Palace’s participation in doubt after Lyon finished sixth in Ligue 1, a higher finish than Palace’s FA Cup-winning qualification.
Textor, who also owns a stake in Brazilian club Botafogo, had moved to sell his Palace shares to comply with UEFA regulations.
Lyon’s fall marks a dramatic decline for a club that reached the Champions League semi-finals in 2020 and has not played in France’s second tier since 1989. Should the appeal fail, Reims, who lost to Metz in the relegation play-off, would replace Lyon in Ligue 1.
The decision echoes last year’s financial collapse of Bordeaux, which saw the six-time champions relegated to the French fourth tier after bankruptcy.
Textor, who had dismissed relegation fears in November, remained optimistic before Tuesday’s meeting, stating, “Everything is good financially.” Lyon’s appeal will now determine whether the club can preserve its top-flight status and avoid becoming the latest French giant to succumb to financial turmoil.