Crystal Palace's qualification for the 2025-26 Europa League, achieved through a historic FA Cup victory against Manchester City, is under threat due to UEFA's multi-club ownership rules. This situation has drawn Nottingham Forest into the fray, as they could potentially benefit from Palace's possible disqualification.

The core issue revolves around John Textor, who holds a 43% stake in Crystal Palace through his company, Eagle Football Holdings. Eagle Football also owns a 77% stake in Lyon, which has also qualified for the Europa League. UEFA regulations prevent any individual or entity from having a majority stake or significant control over two clubs participating in the same European competition, to prevent any potential conflicts of interest or collusion.

UEFA's stance is to ensure the integrity of its competitions, preventing situations where one owner could influence the outcome of matches involving their clubs. This rule is designed to maintain fair play and prevent any actions that could compromise the competition's impartiality.

Crystal Palace argues that they operate independently of Lyon, with no shared staff, strategies, or commercial deals. They insist their FA Cup win and Europa League qualification were achieved solely on their own merit. To further demonstrate their commitment, Textor has reportedly offered to step down as a director of Palace to avoid any conflict of interest. Sources indicate he would even sell his Palace shares to his partners at under 25% of their market value if it means the difference between Palace competing in Europe or being excluded from the tournament.

Nottingham Forest, who finished seventh in the Premier League and secured a Europa Conference League play-off spot, has formally requested clarification from UEFA regarding Crystal Palace's eligibility. They stand to gain if UEFA disqualifies Palace, potentially being elevated to the Europa League. Evangelos Marinakis, the owner of Nottingham Forest, previously diluted his control of the club to avoid similar conflict of interest issues with his other club, Olympiakos.

The situation is complicated further by the fact that Lyon themselves could face sanctions from UEFA for potentially breaching financial fair play rules. UEFA's Club Financial Control Body (CFCB) is closely monitoring Lyon, adding another layer of uncertainty to the situation.

UEFA's decision could have significant repercussions. If Palace are disqualified, they might appeal to the Court of Arbitration for Sport, potentially leading to a lengthy legal battle. The draw for the league phase of the Europa League, where Palace would enter, is scheduled for August 29, leaving a narrow window for resolution.

The Premier League has also been grappling with financial fair play regulations. The league has postponed implementing new squad cost rules, which aim to limit spending on wages, transfers, and agents' fees to a percentage of club revenue. The current rules allow clubs to incur losses of up to £105 million over three years. These financial regulations add another layer of complexity to the broader issue of club ownership and financial sustainability in European football.