They’re the seven-time Ligue 1 champions, five-time Coupe de France winners and two-time Champions League semi-finalists. But that hasn’t stopped Olympique Lyonnais from falling on hard times… to the point that they have now been administratively relegated to Ligue 2 over their continuing financial issues.
Make no mistake, this is a shockwave moment for European football: imagine if a club like Chelsea or Tottenham suddenly went bankrupt and were forcibly demoted to the Championship… that’s the equivalent of Lyon’s demise.
The French giants could yet appeal the decision and enjoy a late, late reprieve, but otherwise – at the time of writing at least – one of the most successful clubs in French football will play in the country’s second tier during the 2025/26 season. So where has it all gone wrong for Lyon?
Fire Sale
The scale of Lyon’s financial woes were first reported in November 2024, when the club was handed a provisional relegation to Ligue 2 as their bank balance rescinded yet further – it’s thought that they were £200 million in debt at the time of the judgement.
The National Directorate of Management Control (DNCG), which is French football’s watchdog, gave the club until the end of the 2024/25 campaign to prove that it had its house in order when it came to its finances.
Despite the issues hanging over their heads, the Lyon board sanctioned transfer spending of a staggering £125 million over the course of the 2024/25 season – their chiefs were seemingly oblivious, or ignorant to, a net spend of -£68 million at a time when the club’s finances were under scrutiny.
Indeed, club president John Textor said back in November that there was ‘no chance’ that Lyon would be relegated. They have since been scrabbling around for cash, selling Rayan Cherki and Said Benrahma in cut price deals worth £30 million and £10 million respectively, while club icon Alexandre Lacazette was allowed to leave on a free transfer.
But even that revenue was a mere drop in the ocean compared to the deep, deep water that Lyon found themselves in. Having re-examined the club’s accounts since November, the DNCG came to the conclusion that Lyon simply hadn’t done enough to steady the ship – an automatic relegation is a sanction available to the French authority.
Textor himself is swimming against the tide. He has been forced to sell his shares in Crystal Palace to the New York Jets owner, Woody Johnson, with reports suggesting that his Eagle Football Group – which owned 77% of Lyon’s shareholding – had racked up debts in excess of £400 million.
The decision to sell up was principally taken to allow Palace to play in the Europa League next season – a competition that, technically, Lyon have qualified for after finishing in sixth position in Ligue 1. It’s not yet known if the French side will be allowed to take up their spot in the continental competition, but Palace should be in the draw – Textor’s decision to sell his shares means that the Londoners aren’t bound by the rules preventing two or more sides from a multi-club ownership scheme to play in the same tournament.
However, the reality is that Textor’s group is evidently lacking in the level of investment required to sustain multiple football clubs around the globe. And so Lyon will probably have to be sold, which would require a deep-pocketed suitor willing to take on their debt while playing their trade in the second tier of French football – assuming the appeal is unsuccessful.
But there aren’t many of those, particularly with French football as a whole experiencing a financial crisis of its own. Could we end up losing a bastion of the European game?
What Happens Next?
Lyon have the right to appeal, which the club has confirmed that they will – labelling the DNCG decision as ‘incomprehensible’. They claim that they have raised the necessary funding to meet the DNCG’s demanded obligations. “Over the past few months, we have worked closely with the DNCG, meeting all of its demands with equity investments in excess of the amounts requested,” a spokesperson for Lyon said.
Thanks to equity contributions from our shareholders and the sale of Crystal Palace, our cash position has improved significantly, and we have more than sufficient resources for the 2025/26 season.
They have other saleable assets in their playing squad that could generate upwards of £50 million, so it seems as though two positions are possible: Lyon fight against their relegation and, presumably, lose, or they generate plenty of income over the summer to convince the DNCG that they are taking the situation seriously… but then play the 2025/26 season in Ligue 1 with a severely weakened team.
Whether their appeal argument holds weight remains to be seen, but French football fans will notice the eerie similarities of Lyon’s demise and that of another giant of French football: Bordeaux. In the space of 15 years, Les Girondins went from winning the Ligue 1 title to playing their trade in the fourth tier of French football – a cautionary tale of the perils of mass overspending and colossal debt.
Bordeaux, who gave the world Zinedine Zidane amongst countless other world-class talents, were relegated to Ligue 2 on merit and then, latterly, by the DNCG after the club was forced to file for administration in 2024 – that double demotion taking them down to the fourth tier.
The club would just about survive and play in Championnat National 2 in 2024/25, finishing in fourth place – not enough for promotion. It will be interesting to see how long Bordeaux have to toil in the lower reaches of Gallic football.
Lyon will probably assume that a similar fate won’t befall them. But then Bordeaux probably felt the same way too… The most dominant force in French football in the noughties, Lyon were Champions League semi-finalists as recently as 2020. But what does the future hold in store? Any repeat of the Bordeaux fiasco would be a disaster for them and the beautiful game in France.
