Seven-time French Ligue 1 champions have submitted an official appeal after the decision was made yesterday to relegate them to Ligue 2 due to financial issues.
The appeal is important for the French football powerhouse, as it seeks to overturn the ruling and maintain its position in Ligue 1.
The relegation decision was initially provisional in November 2024 by the French football financial watchdog, the Direction Nationale du Contrôle de Gestion (DNCG), and was confirmed on June 24, 2025 despite efforts by the club owner, John Textor, to address the financial instability which included revealing debts of approximately Ksh86.1 billion and recent equity contributions.
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The decision by FIFA to relegate Lyon, one of France’s most storied football clubs, sparked outrage among Lyonnais fans, as they blamed financial mismanagement by the club’s officials, something they say they did not expect from a club that finished sixth in Ligue 1 last season.
Despite efforts to stabilize the situation, including selling players like Rayan Cherki and Said Benrahma, offloading high earners like Alexandre Lacazette, and even selling a stake in Crystal Palace, the DNCG was not convinced that the club’s financial health had improved enough.
Key Financial Figures
The whole football world is following Lyon’s situation as many modern football clubs are facing similar, if not worse, financial situations.
Lyon’s total liabilities escalated to over Ksh75 million, with significant long-term obligations and short-term liquidity gaps. The club posted a staggering Ksh17.5 billion loss for the first half of the 2024–25 season, nearly double the figure from the previous year.
Lyon’s revenue also collapsed massively, as income from television rights fell by 40%, and merchandise sales plunged by 60%. Transfer profits also dropped by over 40%, totalling just Ksh8.5 billion.
What started as a post-pandemic recovery challenge soon spiralled into a structural crisis, exaggerated by heavy investments, increased wages, and missed targets on European competition income.
Desperate Measures
Lyon’s ownership group, Eagle Football Holdings, led by American businessman John Textor—attempted a series of last-ditch financial manoeuvres like injecting Ksh12.5 in fresh capital between October 2024 and April 2025.
The team offloaded key club assets, including a minority stake in Crystal Palace, valued at approximately Ksh28.5 billion and Olympique Lyon Area, which yielded a reported Ksh10.37 billion.
The most disastrous of all was the sale of Olympique Lyonnais women’s team, which was one of the most successful in Europe.
Olympique Lyon signed off on leaseback agreements for training facilities to raise a further Ksh2.93 billion. Despite these measures, the DNCG judged that the club’s situation remained “insufficiently stabilized,” and that the proposed recovery plan lacked credibility.
Implications for the Club
Lyon will fail to compete in the French top-tier Ligue 1 for the first time since 1989, a huge fall for a 7-time Ligue 1 champion.
Olympique Lyon is also facing a risk of losing key players like Moussa Dembele and Lucas Paqueta due to lower competition level and financial necessity. Top talent from the academy and youth ranks will also have to be sold off to generate cash.
Lyon has already been under a transfer ban since January 2025, and the Ligue 2 status, plus financial constraints, make it difficult to attract top-tier talent and will affect their competitiveness for the coming years.
Lyon will also have to shift focus to free agents, youth promotion, and low-cost domestic signings to replace players who will force their departure and to have players on the bench.
Where does that leave OL?
Olympique Lyon has appealed, arguing they have raised the required capital to be able to start next season again and be able to compete in Ligue 1.
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They also argue that they have sold assets like club stakes and player rights that will generate income for the next season, having received DNCG approval earlier for a UEFA competition licence, as they qualified for the Europa League next season.
But the DNCG remains unconvinced, and unless the appeal succeeds, the club will compete in Ligue 2 in 2025/26. This would also force salary cuts, further player sales, and a reshaping of their competitive strategy.
If the appeal is unsuccessful, Stade de Reims will replace Lyon in Ligue 1 for the 2025–26 season. Despite losing the relegation play-off to Metz, Reims have been reprieved by the DNCG’s decision, which opens a spot in the top flight.
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