Lyon relegated to Ligue 2 due to financial breaches; American owner John Textor reportedly expected to appeal

Lyon were relegated to Ligue 2 following a decision from the National Directorate of Management Control (DNCG), French soccer's financial watchdog, seven months after they were provisionally relegated for financial mismanagement.

The club have the ability to appeal the decision and are expected to do so in the next week, buying them more time to meet the DNCG's financial requirements.

The decision came on Tuesday following a hearing in front of the DNCG, with club owner and president John Textor in attendance for the proceedings.

In November, Lyon were provisionally relegated to the second division for their multimillion-dollar debt, which by some estimates is as low as $200 million and as high as $530 million. The decision last fall from the DNCG put pressure on Textor to improve Lyon's financial standing before the organization had to make a final ruling, with several moneymaking moves in recent weeks improving the situation somewhat.

Several players have since left Lyon as the club aimed to pocket serious transfer fees, most notably with Rayan Cherki's move to Manchester City earlier this month in a deal reportedly worth $41.76 million to the cash-strapped club. Textor's move to sell England's Crystal Palace, another club under the Eagle Football Holdings umbrella, may also play a part – he has reportedly agreed to sell his 44.9% stake in Palace to Woody Johnson, the owner of the NFL's New York Jets, for a fee of around $258 million. It is unlikely that he has received the funds yet, though, which may have played a role in the DNCG's ruling.

"You can see this thanks to 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 Crystal Palace sale. Our liquidity situation has improved considerably." Textor told members of the media before the ruling came in on Tuesday, per RMC. "Everyone usually knows how much we sold Crystal Palace. This money is invested in Eagle. Obviously, we like to use it to pay off our debts. We also like to make part of it available to the company. UEFA asked us to invest a sum of money in the company to ensure our sustainability and reassure it. We agreed to his request and provided this amount. And this is the presentation we made at the DNCG."

Despite the financial ruin, Lyon finished sixth in Ligue 1 during the 2024-25 campaign and are slated to play in the league phase of the UEFA Europa League season.