In a dramatic twist to French football’s summer, Olympique Lyonnais have been officially relegated to Ligue 2 due to unresolved financial problems. The decision, confirmed by France’s financial regulatory body DNCG on Tuesday, comes despite Lyon’s efforts to stabilize their finances through key player sales.

The seven-time Ligue 1 champions, who dominated French football from 2001 to 2008, were initially handed a provisional relegation in November 2024. That decision followed mounting concerns over the club’s spiraling debt levels. While the club has offloaded several first-team stars since then in a bid to comply with financial regulations, the DNCG ruled during a meeting this week that Lyon had not done enough to remedy their financial standing.

The announcement was made public by the French Football League (LFP) on Tuesday evening. Other clubs under review, including Monaco, Nantes, and Paris FC, were cleared and will face no further sanctions.

Lyon’s descent into the second division marks a historic low for a club that reached the UEFA Champions League semi-finals just five years ago in 2020. The news is not only a blow for the club and its fans but also a jolt to the landscape of French professional football.

Club president John Textor had previously downplayed fears of relegation. In an interview with L’Équipe last week, he expressed confidence that the club had put its financial issues behind it. As recently as November, he had declared there was “no chance” of relegation.

However, the DNCG was not convinced. Despite Lyon’s sale of players such as Rayan Cherki to Manchester City, Said Benrahma, Maxence Caqueret, and long-serving goalkeeper Anthony Lopes, the regulator stood by its initial concerns.

Textor’s own financial dealings may have also played a role in the uncertainty. The American businessman is currently in the process of selling his shares in English Premier League side Crystal Palace. That deal, involving NFL New York Jets owner Woody Johnson, is still awaiting Premier League approval. Johnson has yet to pass the league’s owners’ and directors’ test, a required step before taking over any top-flight English club.

The situation has additional implications. Lyon’s sixth-place finish in Ligue 1 this past season had earned them a spot in next season’s UEFA Europa League. However, if their relegation stands, that European place may be jeopardized — and Crystal Palace, if the sale fails to clear regulatory hurdles, could also be affected due to UEFA’s rules on club ownership and competition eligibility.

Lyon is expected to appeal the decision, hoping to overturn the ruling before the start of the 2025–26 campaign. But with the clock ticking and the DNCG standing firm, their return to France’s top flight is now uncertain.

As one of France’s most successful clubs faces life in the second division, the news sends a warning to other teams across Europe navigating financial pressures in the modern game.

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