French soccer club Olympique Lyonnais (Lyon) have been demoted to the second-tier Ligue 2 over claims of serious financial mismanagement, but have vowed to appeal the decision.
The relegation was confirmed by French soccer’s DNCG financial monitoring body yesterday (June 24), with that body having said the club had failed to alleviate its debt situation – which came to €505.1 million ($585.7 million) last October.
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Last November, the DNCG provisionally relegated Lyon unless the team improved its poor financial situation by this month.
Lyon officials, including owner John Textor, then met with the DNGC on Tuesday but failed to convince the body that the club had sufficiently improved their financial situation, so that the punishment could be lifted.
In a statement, Lyon called the DNGC's decision “incomprehensible” and confirmed they would appeal.
The club added: “With proven funds and sporting success that has earned us a place in European competition for two consecutive years, we sincerely do not understand how an administrative decision could relegate such a major French club.
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By GlobalData“We will appeal to demonstrate our ability to provide the necessary financial resources to guarantee OL's place in Ligue 1.”
Textor’s Eagle Football Group holding company, which owns a 77% stake in Lyon, announced the aforementioned debts late last year.
That figure is what prompted the DNCG, an independent monitoring body that analyses the accounts of all top-flight Ligue 1 and Ligue 2 clubs to protect the clubs from financial distress and administration at the hands of their owners.
To stave off the threat of relegation to the second tier, it was reported that Lyon had to pay off as much as €100 million of the debt before Tuesday’s scheduled meeting.
Textor, for his part, refused to appeal that decision at the time, accepting the DNCG’s warning, and at the time played down the threat of relegation, saying outright: “We will not be relegated."
The French side raised around €53 million with the sale of players – Maxence Caqueret to Como in January and Rayan Cherki to Manchester City this month – while some high earners such as striker Alexandre Lacazette and goalkeeper Anthony Lopes have been released.
Earlier this week, Textor agreed a deal to sell his 43% stake in English Premier League club Crystal Palace to Woody Johnson, owner of the NFL’s New York Jets, for around £190 million ($255.3 million) to raise further capital. The American businessman also owns Brazilian outfit Botafogo.
However, these funds have clearly not proved enough for the DNCG to overturn its ruling against the seven-time Ligue 1 champions.
Lyon's statement continued: “Over the past few months, we have worked closely with the DNCG, fulfilling all of its requests with equity investments that exceeded the required amounts.
“Thanks to capital injections from our shareholders and the sale of Crystal Palace, our cash flow has significantly improved and we now have more than sufficient financial resources for the 2025-26 season.”
Lyon had been due to play in the UEFA Europa League, Europe’s secondary club competition, next season after finishing sixth in Ligue 1 in the 2024-25 campaign.
The decision to relegate Lyon comes after six-time Ligue 1 champions Bordeaux had to surrender their professional status after being relegated from Ligue 2 to the French fourth tier because of bankruptcy, in August last year.
Should Lyon’s appeal fail, the club will be replaced in the top flight by Reims, who were beaten in the Ligue 1 relegation play-off by Metz.
