Cliff Notes – French giants Lyon relegated to Ligue 2 over financial issues

Lyon has been relegated to Ligue 2 due to €175 million in debt and a lack of a clear financial recovery plan, as confirmed by the French Professional League (LFP).
The club plans to appeal the decision, asserting they have met all requirements set by financial regulators and highlighting recent improvements in their cash position.

French giants Lyon relegated to Ligue 2 over financial issues

Seven-time French champions Lyon, owned by American businessman John Textor, have been relegated to the second tier of French football due to the club’s financial problems, the French Professional League announced (LFP) announced on Tuesday.

Lyon confirmed they will appeal the decision.

Textor and Mickael Gerlinger, the club’s director of football, were interviewed by The National Directorate of Management Control (DNCG), the French financial regulators in charge of keeping checks on all professional clubs’ accounts and financial health.

In November, the DNCG provisionally relegated Lyon because of a €175 million ($203.34 million) debt and no clear plan from the club on how to reduce it. A transfer ban was also imposed in the January transfer window.

The club criticised the decision in a statement on Tuesday and said it had worked closely with the DNCG, satisfying all their requests.

“Olympique Lyonnais takes note of the incomprehensible decision handed down by the DNCG this evening and confirms that it will appeal immediately,” the club said.

“With demonstrated funds and sporting success that has earned us a place in European competition two years running, we sincerely fail to understand how an administrative decision could relegate such a great French club.”

The decision comes one day after Premier League side Crystal Palace announced that New York Jets owner Woody Johnson signed “a legally binding contract” to buy Textor’s shares. Textor sold his 43% stake in the London club for $254 million.

“Thanks to the equity contributions from our shareholders and the sale of Crystal Palace, our cash position has improved considerably and we have more than sufficient resources for the 2025/26 season,” the Lyon statement added.

In October, Textor’s Eagle Football Group revealed debts totalling around $574.85 million, raising concerns about the French club’s financial stability. Textor’s proposal to transfer funds from Botafogo, another club he owns in Brazil, to Lyon to cover the debts was denied.

However, Lyon bosses were confident on Tuesday that they would be able to satisfactorily answer all questions and provide reasons why they should not be relegated to Ligue 2.

The 59-year-old Textor gave a positive assessment of their financial position before the decision being announced.

“You can see from the contributions of our shareholders, we have invested new capital, not only for the DNCG, but also for our UEFA licensing process. Not to mention the good news of the sale of Crystal Palace. Our liquidity situation has improved considerably,” he told reporters earlier on Tuesday.

Earlier this month, they raised €42.5 million from the transfer of Rayan Cherki to Manchester City.

But the club has been under growing pressure.

Two years ago, the DNCG decided to monitor the club’s transfer activities, saying its moves on the market would be limited under “a framework for wage costs and transfer indemnities.”

Lyon won their seven league titles from 2002-08 and reached the Champions League semifinals in 2020.

Lyon narrowly lost to Manchester United in the Europa League quarterfinals and missed out on a cash windfall when they failed to qualify for next season’s Champions League after finishing sixth in Ligue 1.