The world of French football is reeling as seven-time Ligue 1 champions Lyon have been officially relegated to Ligue 2 due to severe financial irregularities. The decision, handed down by the French Professional Football League (LFP) on Tuesday, June 24, 2025, marks a stunning fall from grace for a club that dominated French football in the early 2000s and consistently competed in the Champions League.
The LFP's announcement followed an investigation into Lyon's financial status for the upcoming 2025/26 season. The Professional Clubs Control Commission (DNCG), France's football financial watchdog, determined that Lyon's massive debt and fragile financial position warranted the administrative relegation. While the club has the option to appeal, the decision sends shockwaves through the French football landscape. No sanctions were imposed on Monaco, Nantes, or Paris FC.
Lyon has been teetering on the brink of financial disaster for some time. As far back as November 2024, the DNCG issued a “provisional relegation” notice after the club acknowledged a staggering financial debt of €505.1 million. On December 31, 2024, Lyon reported losses of €90 million, nearly triple the €32.6 million loss recorded the previous year. The club's financial model, which heavily relied on consistent qualification for European competitions, has proven unsustainable amidst poor on-pitch performances and inflated wage structures. The COVID-19 pandemic further exacerbated the financial strain.
The DNCG's ruling is a response to Lyon's failure to comply with financial fair play (FFP) regulations. Ligue de Football Professionnel (LFP) officials have taken a close look and decided that Les Gones financial setup isn't working anymore. The decision aims to uphold the integrity of the league and ensure financial stability across all clubs. Lyon's financial challenges pose significant risks, and immediate action is necessary.
Lyon's American owner, John Textor, has faced growing criticism over poor financial planning and sporting decisions. Textor's Eagle Football Group, which also owns stakes in Botafogo (Brazil) and Crystal Palace (England), has been under scrutiny for its financial dealings related to Lyon. Measures taken by the Eagle Football Group consortium, including the sale of John Textor's stake in Crystal Palace and the Lyon women's team, have not met the required conditions.
The consequences of relegation are far-reaching. Beyond the obvious sporting implications, Lyon faces a transfer ban and close monitoring of its payroll. Reduced income from TV rights and sponsorship deals will likely compound the club's financial woes. The club needs to meet strict financial rules to prevent being demoted for good. This includes giving the LFP a full recovery plan within the next 30 days, taking care of outstanding debts, and ensuring all FFP rules are followed.
Just a month ago, Lyon had seemingly cleared a major hurdle by avoiding a FIFA-imposed transfer ban related to a pending payment. However, this latest blow is far more devastating.
This marks a low point for a club that enjoyed a golden era in the early 2000s, winning seven consecutive Ligue 1 titles (2002-2008) and boasting legendary players such as Karim Benzema, Hugo Lloris, and Juninho Pernambucano. The club also reached the semi-finals of the Champions League as recently as 2020. The prospect of Lyon playing in Ligue 2 next season is a sobering reminder of the importance of financial stability in modern football.
