Lyon Relegated to Ligue 2, Club Vows to Fight 'Incomprehensible' Decision

French football was rocked on Tuesday as seven-time Ligue 1 champions Lyon were officially relegated to the second division—not because of their performance on the pitch, but due to their financial situation. The decision, announced by the French Professional League (LFP) following a ruling from financial watchdog DNCG, is a major blow for one of France’s most decorated clubs.

Lyon, now owned by American businessman John Textor through his Eagle Football Group, have been under scrutiny for months. Back in November, the DNCG had already provisionally demoted the club over €175 million in debt and the absence of a viable recovery plan. A transfer ban was slapped on them during the January window, and despite multiple attempts to ease the concerns of French regulators, the latest review confirmed the drop. 

The club wasted no time responding. In a strongly worded statement, Lyon said the decision was “incomprehensible” and confirmed they will appeal immediately. "With demonstrated funds and sporting success that has earned us a place in European competition two years running, we sincerely fail to understand how an administrative decision could relegate such a great French club," the statement read. 

In an effort to improve their finances, Lyon’s ownership group had already sold Textor’s stake in Crystal Palace for $254 million, and even offloaded the women’s team. Earlier this month, they also raised €42.5 million from the sale of Rayan Cherki to Manchester City. Still, it wasn’t enough to satisfy the DNCG. The watchdog has been monitoring Lyon closely since 2022, placing restrictions on their wage bill and transfer spending. But the situation has now spiralled into full-blown crisis, with the club officially set to play in Ligue 2 for the 2025–26 season—unless their appeal changes things. 

Textor and Lyon's director of football, Mickael Gerlinger, were both present at the recent hearing with the DNCG. They had hoped the sale of assets and fresh equity injections would demonstrate financial stability going forward. “Thanks to the equity contributions from our shareholders and the sale of Crystal Palace, our cash position has improved considerably and we have more than sufficient resources for the 2025/26 season,” Lyon insisted in their statement. 

But clearly, the DNCG wasn't convinced. 

If the appeal fails, Lyon will be replaced in Ligue 1 by Reims, who lost their relegation playoff to Metz. It's a stunning turn of events for a club that once dominated French football and regularly competed in the Champions League. For now, though, Lyon’s future remains up in the air.