Olympique Lyon, a club synonymous with French footballing success in the early 2000s, faces an unprecedented crisis after being relegated to Ligue 2. This marks a stunning fall from grace for the seven-time Ligue 1 champions, who dominated French football between 2002 and 2008. The National Directorate of Management Control (DNCG), the financial watchdog of French football, made the decision following an audit of the club's finances, leaving the club and its supporters reeling.
Lyon's financial troubles have been brewing for some time. In November 2024, the DNCG provisionally relegated the club due to mounting debts, estimated to be around £200 million. The club was given time to rectify the situation, but despite efforts to improve its financial standing, the DNCG upheld the relegation decision on June 24, 2025. The club's owner, John Textor, expressed confidence in the club's financial position, citing equity contributions from shareholders and the sale of Crystal Palace, another club under his Eagle Football Group umbrella. Textor sold his stake in Crystal Palace to Woody Johnson, owner of the New York Jets, in a deal worth approximately £190 million. He argued that these measures had significantly improved Lyon's cash position and ensured sufficient resources for the 2025/26 season.
However, the DNCG remained unconvinced. Despite Lyon's efforts to reduce their wage bill by selling key players such as Said Benrahma, Anthony Lopes, and Maxence Caqueret in January 2025, and Rayan Cherki to Manchester City for £34 million in June 2025, the financial situation was deemed "insufficiently stabilized." The club's debts were reported to be over £420 million, and a loss of £177 million was reported. Promises made by previous owner Jean-Michel Aulas to generate substantial revenue through player sales and asset refinancing were not fulfilled. Questionable transfer dealings and heavy spending despite financial pressures further exacerbated the situation. In the previous transfer window, Lyon's outlay totaled €147.79 million, including a record transfer fee for Moussa Niakhaté.
The consequences of relegation are far-reaching. Lyon's long-standing presence in the top flight of French football, since 1989/90, has come to an end, at least temporarily. The club faces the prospect of losing key players due to their reduced status and financial constraints. Attracting top-tier talent will be challenging, affecting their competitiveness in the coming years. The club's brand and reputation will also suffer, impacting commercial revenue and sponsorship deals.
Lyon has confirmed that they will appeal the DNCG's decision, describing it as "incomprehensible." The club argues that they have met all the DNCG's demands with equity investments and have demonstrated sufficient cash liquidity. The appeal process could be lengthy and complex, and there is no guarantee of success.
If Lyon's relegation is upheld, it could have implications for other clubs. Crystal Palace, who finished lower than Lyon in their respective leagues, may now have a chance to qualify for the Europa League due to UEFA's rules preventing clubs with the same ownership from competing in the same European competitions. Reims would replace Lyon in Ligue 1.
The situation at Lyon serves as a cautionary tale for other clubs. It highlights the importance of financial responsibility and sustainable management in football. The pursuit of success on the pitch should not come at the expense of financial stability. Lyon's predicament is a stark reminder that even the most prestigious clubs are not too big to fail if they lose sight of sound financial principles.
