Lyon Relegated to Ligue 2 Amid Financial Crisis

• French football giants Lyon relegated due to €175m debt
• Club says decision is “incomprehensible” and will appeal
• Textor blames UEFA restrictions despite improved finances

Seven-time French champions Lyon have been relegated to Ligue 2 by the French Professional League (LFP), following a decision by the financial watchdog DNCG, citing the club’s unstable financial position.

The move, confirmed on Tuesday, is a major blow to the historic club, which is owned by American businessman John Textor. Lyon confirmed it would immediately appeal the ruling.

“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 DNCG had initially imposed a provisional relegation in November 2023, citing €175 million in debt and a lack of a viable financial plan. The club was also subject to a transfer ban in January.

The relegation comes just one day after Crystal Palace announced that New York Jets owner Woody Johnson had agreed to buy Textor’s 43% stake in the Premier League 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 club added in its statement.

Earlier this year, the Eagle Football Group, which owns Lyon and several other clubs including Botafogo and Molenbeek, disclosed debts totalling over $574 million. Textor’s attempt to transfer funds from Botafogo to cover Lyon’s debts was rejected by French regulators.

Textor remained publicly optimistic on Tuesday, ahead of the DNCG ruling.

“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,” he told reporters.

“Not to mention the good news of the sale of Crystal Palace. Our liquidity situation has improved considerably.”

In recent weeks, Lyon has taken steps to reduce its debt load. The €42.5 million transfer of Rayan Cherki to Manchester City was completed earlier this month. However, it wasn’t enough to sway the DNCG.

Two years ago, Lyon came under DNCG restrictions for wages and transfer spending. The league imposed “a framework for wage costs and transfer indemnities,” limiting their market activity.

Lyon won seven Ligue 1 titles between 2002 and 2008, reached the Champions League semi-finals in 2020, and were narrowly beaten by Manchester United in the 2025 Europa League quarterfinals. They finished sixth in Ligue 1 last season, narrowly missing out on Champions League qualification.

The club has stated it is confident it can address the DNCG’s concerns in the appeal and avoid demotion.