French football powerhouse Olympique Lyonnais has been officially relegated to Ligue 2 after failing to convince France’s financial watchdog, the DNCG, of its financial stability. The club, which finished sixth in Ligue 1 last season, has described the decision as “incomprehensible” and is set to appeal immediately.
The seven-time French champions were initially handed a provisional relegation in November 2024 due to debts reportedly amounting to around £200 million. Despite offloading key players like Said Benrahma, Anthony Lopes, Maxence Caqueret, and more recently Rayan Cherki in a £34 million deal to Manchester City, the DNCG maintained its stance after meetings held on Tuesday.
In a statement released Tuesday night, Lyon expressed frustration, insisting they had “met all demands” set by the DNCG and had significantly improved their financial position with shareholder equity contributions and the sale of their stake in Crystal Palace.
“This administrative decision to relegate such a major French club despite proven financial support and sporting achievement is baffling,” the club said. “We will appeal to demonstrate our financial capacity and ensure our continued presence in Ligue 1.”
Lyon’s owner, American businessman John Textor, finalized the sale of his shares in Premier League side Crystal Palace to New York Jets owner Woody Johnson just a day before the DNCG’s final verdict.
The developments have also raised questions about European competition eligibility. Both Lyon and Crystal Palace had qualified for the Europa League, but UEFA regulations restrict two clubs under shared ownership from participating simultaneously. With Textor’s sale and Lyon’s demotion, Palace may now be cleared to compete in the tournament.
UEFA is expected to provide clarity following a scheduled financial control body meeting on Friday.
French football expert Julien Laurens described the relegation as “a massive earthquake” for French football and criticized Textor’s management, saying: “He turned a historically stable and successful club into a financial mess.”
Laurens noted that Lyon’s relegation could complicate the sale of remaining assets and player transfers as the club scrambles to raise more funds before their appeal. One of the club’s rising stars, Malick Fofana, is already attracting interest from Chelsea.
Lyon, once dominant with seven consecutive Ligue 1 titles between 2002 and 2008 and multiple domestic cup wins, haven’t been in Ligue 2 since 1989. The shock drop threatens to undo decades of growth established under former president Jean-Michel Aulas.
Meanwhile, Sky Sports News’ Kaveh Solhekol highlighted a potential silver lining for Crystal Palace, noting that Lyon’s ineligibility could open the door for the London club’s Europa League dreams next season.
The appeal process is expected to unfold quickly, as Lyon races against time to reverse the decision before the new season begins.
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