Olympique Lyonnais faces provisional relegation and transfer ban

Olympique Lyonnais have been handed a provisional relegation from Ligue 1 and a transfer ban following the club's alarming financial situation. The decision was taken by France football's financial supervisor DNGC (National Directorate of Management Control) after the said ruling on Friday.

Lyon is currently positioned 5th in the Ligue 1 with 18 points in 11 games but if the club fails to improve their accounts by the end of the season, they will be demoted to the second division Ligue 2 regardless of their league finish this season. They will also be banned from signing any new player in the upcoming transfer window in January.

🚨⚠️ Official: Olympique Lyonnais have been handed a provisional Ligue 2 relegation.

It also includes a transfer BAN due to their financial situation. pic.twitter.com/jTEsT3nYb3

— Fabrizio Romano (@FabrizioRomano) November 15, 2024

The LFP (Ligue de Football Professionnel) has also confirmed that Lyon's payroll will be under supervision. After Lyon co-owner John Textor and other club officials appeared before DNCG in the hearing held earlier this day, the LFP confirmed that Lyon will be sanctioned with "supervision of the payroll and ban on recruiting, demotion as a precautionary measure at the end of the current sports season."

The woes that continue

The 7-time French champions Olympique Lyonnais was purchased by John Textor in 2023 who is the chairman of Eagle Football Group. He also owns the English Premier League side Crystal Palace and holds the largest share of Brazilian outfit Botafogo. 

The Eagle Football Group's French wing published a financial statement last week that the John Textor-owned company is in a debt of €463.8 million. Despite their reduction in net losses, the debt is about to rise to almost €500 million.

Eagle Football Group published 1Q 2024/25 revenue, with revenue excluding player trading increasing (vs 1Q 2023/24) by €4m to €37m but player sales decreasing by €61m to €30m. pic.twitter.com/G5so1yFwWj

— Greg Cordell (@gregorypcordell) November 15, 2024

Lyon's financial state worsened due to the club's huge salary cap as Lyon has reportedly the second-largest wage bill in Ligue 1 despite their failure to finish in the top four since 2020-21. 

However, DNCG has addressed the situation with a firm stance and scrutinized the situation. The John Textor-owned Eagle Football Group has time until the end of the season to raise funds and stabilize the club's financial condition as well as deny their relegation to the second division.

The fact that Girondins Bordeaux was handed relegation to the 4th tier of French Football following similar proceedings in 2023 may worry the owners and officials of Olympique Lyonnais. 

John Textor's statement

John Textor addressed the issue in the press conference after the hearing ended. He stated:

"I am confident in our figures, and we will bring in several hundred million in cash over the coming months,"

"We earn about €90 million per year from player sales. This will continue, but do not worry, it will not be your favorite player, the best player, if we do not have someone to replace them and perform even better."

However, the American businessman expressed his dissatisfaction over the proceeding, the pressure from outside, and their 'enemies'.

❤️💙📉🇫🇷 John Textor (rétrogradé à titre conservatoire avec Lyon) a toujours la rage contre le PSG ! Pauvres supporters lyonnais 👀 pic.twitter.com/8nU64QPAPn

— Paris No Limit (@Xparisnolimit) November 15, 2024

"The local auditors only looked at the French football club and did not consider the hundreds of millions of dollars coming from various parts of our organization. We are not at all worried about our sustainability."

"I can never be confident in the way a regulatory body considers these things. I believe that the DNCG is independent of some of the pressures that you see, But we have a lot of enemies, you know, on the board of directors, in the league, a big club from Qatar."

The next steps

Olympique Lyonnais will have to offload their highly-anticipated youngsters; such as 21-year-old French midfielder Ryan Cherki and 19-year-old Malick Fofana to generate revenues and reduce the salary cap. The said players are expected to be put on the market by the Club in the upcoming winter transfer window in January 2025. 

John Texter has reportedly decided to sell the 45% share he holds in PL side Crystal Palace and sell some other shares the Group holds in different clubs. Any measure that generates revenues will be beneficial for the French side as they must raise enough funds to avoid the sanction.