Shockwaves in World Football: Lyon Relegated to Ligue 2 as Crystal Palace Awaits UEFA Decision

French football giants Olympique Lyonnais have been relegated to Ligue 2 following a shocking financial ruling by French league authorities, casting uncertainty over the club’s future, and opening the door for Crystal Palace to secure a Europa League spot. 

Seven,time Ligue 1 champions Lyon, one of France’s most decorated and iconic football clubs, have been officially relegated to Ligue 2 after failing to meet financial obligations set by the DNCG (Direction Nationale du Contrôle de Gestion), the financial watchdog overseeing French professional football. The decision, announced Tuesday night, has sent shockwaves through the football community. 

Lyon, who finished sixth in Ligue 1 during the 2024/25 season, have been a mainstay in the French top flight since the 1989/90 campaign. The club described the DNCG’s decision as “incomprehensible” and has vowed to immediately appeal. 

In an official statement, the club said: 

“Olympique Lyonnais acknowledges the incomprehensible decision rendered by the DNCG tonight and confirms that it will immediately file an appeal. In recent months, we have worked closely with the DNCG, satisfying all of its requests with cash equity investments exceeding the amounts requested.” 

The statement emphasized that thanks to shareholder contributions and the recent sale of shares in English Premier League club Crystal Palace, Lyon’s cash position had improved significantly. The club added: 

“We have more than sufficient resources for the 2025/26 season. With so much cash liquidity demonstrated, and sporting success which has earned European competition in two consecutive years, we sincerely do not understand how one administrative decision could relegate such a great French club.” 

The financial troubles come under the ownership of John Textor and his Eagle Football Group, which is reported to have accumulated debts nearing £422 million. Despite shareholder contributions, restructuring, and major sales, the DNCG concluded that Lyon’s financial guarantees were still insufficient. 

Textor had expressed optimism just days before the decision, citing improved liquidity due to the sale of his shares in Crystal Palace to American billionaire Woody Johnson, owner of the New York Jets. 

“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,” said Textor. 

Leading up to the ruling, Lyon took several drastic measures to stabilize their finances. Star forward Rayan Cherki was sold to Manchester City for £34 million, while midfielder Maxence Caqueret was transferred to Como in January, generating an additional £11 million. In total, the club brought in around £45 million through player sales. 

Additionally, veteran players and high earners such as Alexandre Lacazette and Anthony Lopes were released to reduce the wage bill. Despite these aggressive cost,cutting strategies, the club’s efforts were not enough to sway the DNCG. 

Lyon’s relegation has further implications beyond France. The club was due to compete in the 2025/26 Europa League, having finished 6th in Ligue 1. However, with Crystal Palace , who qualified via their FA Cup victory , also set to participate, ownership conflict arose. UEFA rules prohibit one individual from owning significant stakes in two clubs competing in the same competition. 

To resolve the conflict, Textor sold his stake in Crystal Palace to Woody Johnson, but because the deal was finalized after the March 1 UEFA deadline, it was initially feared Palace could be denied entry. Under previous regulations, Lyon would have taken precedence due to their higher league finish. 

However, Lyon’s demotion may now clear the way for Palace to secure their spot in the competition. The final call rests with UEFA, but the removal of Lyon from the European stage significantly strengthens Palace’s position. 

Following the sale, it was confirmed that Woody Johnson had acquired Textor’s shares in Crystal Palace. Despite holding 43% ownership, Johnson will assume the same limited control as Textor , with only 25% of voting rights. Club chairman Steve Parish, along with U.S. investors Josh Harris and David Blitzer, will retain majority influence over decisions at the London,based club. 

As Lyon prepares to contest the DNCG’s decision, the club faces an uphill battle. The appeal process could potentially overturn the ruling, but the financial scrutiny and public spotlight will remain intense. Meanwhile, Crystal Palace, now under new partial ownership, awaits official confirmation from UEFA to secure their Europa League ticket. 

This situation marks one of the most dramatic off,field twists in recent European football history, intertwining elite French and English clubs, ownership battles, regulatory rules, and the ever,present force of financial accountability.