Lyon, seven-time consecutive Ligue 1 champions (2002-2008), have been relegated to Ligue 2 due to severe financial difficulties.
The DNCG, French professional football’s financial oversight body, confirmed the demotion following a Tuesday meeting with club officials, including owner John Textor, which failed to demonstrate sufficient financial improvement.
The club was initially relegated provisionally in November. Textor’s Eagle Football Group, holding a 77% stake in Lyon, publicly declared debts of £422m last October.
Lyon has denounced the decision as “incomprehensible” and announced an appeal.
This relegation significantly impacts Crystal Palace’s European prospects for next season. UEFA regulations prohibit multiple teams under single ownership competing in the same European tournament.
Textor, a partial owner of both clubs, agreed to sell his 43% stake in Palace on Monday. Lyon’s statement emphasized their “proven funds and sporting success,” questioning the relegation decision.
They aim to demonstrate sufficient financial resources to maintain their Ligue 1 status.
Lyon attempted to bolster their finances through player sales (Caqueret, Cherki) generating approximately £45m and releasing high-earning players like Lacazette and Lopes.
Reims, who lost the relegation play-off, will replace Lyon should the relegation stand. Only five clubs boast more French league titles than Lyon’s seven consecutive wins.
Lyon reached the Champions League semi-finals in 2020 and haven’t played in Ligue 2 since 1989. Textor previously dismissed relegation as impossible, expressing continued confidence before Tuesday’s meeting.
He also owns significant shares in Botafogo (Brazil) and is currently co-owner of Crystal Palace pending the sale to Woody Johnson.
Lyon’s statement highlighted their cooperation with the DNCG, exceeding required investment amounts and emphasizing improved cash flow post-Crystal Palace sale.
Palace’s FA Cup victory secured Europa League qualification. However, Lyon’s higher league finish would prioritize them for a European spot, triggering UEFA’s multi-club ownership rule concerns.
Last year’s bankruptcy-induced relegation of Bordeaux to the fourth tier serves as a stark reminder of the financial fragility within French football. Despite Lyon’s relegation, Palace remains cautious.
UEFA rules state that only one club under significant control of the same entity can participate in a given European competition. Palace maintains Textor has no control over their operations despite his significant stake.
Lyon’s relegation offers Palace hope, potentially nullifying the European spot conflict. However, Palace awaits official confirmation regarding their European participation.
Even if Lyon’s appeal fails, further legal action could prolong the uncertainty. Key questions remain: Can Lyon’s financial situation improve sufficiently to overturn the relegation? Can the relegation be delayed pending the appeals process? These questions weigh heavily on Crystal Palace.
Nottingham Forest’s potential benefit from Palace’s potential exclusion adds further complexity. Palace’s anticipated swift resolution regarding their European future may now be significantly delayed.
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