While European champions PSG were abroad in the United States competing in the Club World Cup, the French league dropped a bombshell on Tuesday.
A shocking decision has been reached to relegate giants Lyon to the second tier, sending a club with seven Ligue 1 titles and two Champions League semifinal appearances to the wastelands of the lower leagues.
After finishing fifth in last season’s league table, their place in Ligue 2 may be confusing to some who are used to seeing only those who finish bottom of the standings sent down.
The Sporting News explains why such a storied club, one which regularly competes in European competitions, may indeed play in Ligue 2 next season.
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Why have Lyon been relegated to Ligue 2?
The French football governing body announced on Tuesday that Olympique Lyonnais, one of the biggest clubs in the country, have been relegated to Ligue 2, the nation’s second tier of professional football, due to financial struggles and administration.
They had been provisionally relegated in November by the French financial watchdog, the National Directorate of Management Control (DNCG), and have been unconvinced by the club’s attempts to reverse their situation.
According to L’Equipe, a final plea from Lyon president John Textor and football director Michael Gerlinger in an interview earlier on Tuesday did not persuade the DNCG to reinstate the club’s top flight status.
Earlier that week, Textor had sold his 45% stake in Premier League club Crystal Palace valued at €200 million. The club also raised €42 million from the sale of star forward Rayan Cherki to Manchester City earlier that summer.
“We’ve made various investments in recent weeks,” Textor told L’Equipe a few days before the decision. “Everything is good financially.”
Lyon have the ability to appeal the decision, and unsurprisingly they intend to do so, according to Get French Football News.
How bad are Lyon’s finances?
Last fall, Lyon reported a debt of around €505 million ($532.6 million), including €161.7 million in short-term debts, up €61 million from the previous year.
In order to alleviate this issue, the club sold NWSL club OL Reign (now Reign FC), as well as its shares in the stadium they play in, OL Vallee Arena (also known as Groupama Stadium).
L’Equipe speculated that the financial windfall from these moves may not have arrived in time to convince the DNCG of their effect on the club’s books.
What will happen to Lyon?
First, Lyon will have the opportunity to appeal this decision, and they most certainly will do so.
If they fail that appeal, then Lyon will indeed play next season in Ligue 2.
The club will have to balance retaining enough players to compete for immediate promotion and balancing the books so they can recover their dire financial situation.
The sale of Cherki will provide some respite, but also significantly weakens the squad. They may also need to make other sales, such as top wage earners Alexandre Lacazette, Nemanja Matic, and Corentin Tolisso, among others.
Additionally, their qualification to the Europa League via their finish in league play last season could also be under threat. The UEFA Club Financial Control Board have yet to review their situation, according to Ben Jacobs of GetMetSport, and their adjudication will deem if Lyon are to retain their place in Europe or if Strasbourg are handed the spot.
