French giants Lyon have been officially relegated to Ligue 2 due to ongoing financial issues, following a ruling by French football’s financial watchdog, the DNCG (Direction Nationale du Contrôle de Gestion).
The demotion, initially handed down provisionally in November, was confirmed on Tuesday after club representatives, including majority owner John Textor, failed to convince the DNCG that Lyon’s financial situation had sufficiently improved.
In a strongly worded statement, the seven-time French champions described the decision as “incomprehensible” and confirmed their intention to appeal.
“With proven funding and sporting success that has secured European football for two consecutive seasons, we simply cannot understand how such an administrative decision can relegate one of France’s most historic clubs,” the club said.
“We will appeal to demonstrate our ability to provide the necessary financial resources to guarantee Olympique Lyonnais’ place in Ligue 1.”
Textor’s Eagle Football Group, which owns a 77% stake in the club, reported debts of £422 million in October 2023. In a bid to stabilize finances, Lyon raised around £45 million through the sales of Maxence Caqueret to Como in January and Rayan Cherki to Manchester City in June. The club also parted ways with high earners, including Alexandre Lacazette and Anthony Lopes.
Despite these efforts, the DNCG was not satisfied with the financial guarantees presented during this week’s hearing.
Textor, who also holds interests in Brazilian side Botafogo and until recently owned 46% of Premier League club Crystal Palace, insisted prior to the hearing that Lyon were financially sound. “We have made a variety of investments in recent weeks. Everything is good financially,” he claimed.
Lyon argue that further capital injections and the agreed sale of Textor’s Crystal Palace stake to New York Jets owner Woody Johnson have strengthened the club’s financial position. They stated that these moves have significantly improved cash flow ahead of the 2025–26 season.
The club’s European future also hangs in the balance. Lyon qualified for the Europa League by finishing sixth in Ligue 1, while Palace secured their spot by winning the FA Cup.
UEFA rules prohibit clubs under the same ownership from competing in the same European competition, and Textor’s dual involvement has raised concerns. The Palace sale is expected to resolve the potential conflict.
If Lyon’s appeal is unsuccessful, Reims—beaten in the relegation play-off by Metz—could be reinstated in the top flight.
Lyon, who dominated French football with seven consecutive Ligue 1 titles between 2002 and 2008, have not played in the second tier since 1989. They reached the Champions League semi-finals as recently as 2020.
Their situation echoes that of Bordeaux, another historic French club, who were demoted to the fourth tier in 2023 due to bankruptcy after falling out of Ligue 2.
