French club Lyon has officially been relegated to Ligue 2 due to severe financial difficulties that have plagued the organization. The decision, made by the National Directorate of Management Control (DNCG), comes after Lyon failed to convince the financial watchdog that they had adequately resolved their financial issues during a recent meeting.

The club, which has a rich history as seven-time French champions, was initially handed a provisional relegation last November when they reported debts totaling approximately £422 million. Despite efforts to stabilize their finances, including the sale of several key players, Lyon's appeal against the relegation was not accepted. The club's owner, John Textor, recently sold his stake in Crystal Palace, which raised further questions about the financial governance of his clubs.

In a statement, Lyon called the decision "incomprehensible," asserting that they had made substantial equity investments and improved their financial status. They expressed their intent to appeal the ruling, emphasizing their commitment to maintaining their position in Ligue 1.

The relegation has implications beyond Lyon itself, particularly for Crystal Palace, which may face challenges regarding its participation in the Europa League due to UEFA regulations that prevent clubs under common ownership from competing in the same European tournament.

Lyon's history in top-flight football is significant; they last played in Ligue 2 in 1989 and reached the Champions League semi-finals as recently as 2020. The club's current predicament marks a substantial decline from their previous successes, raising concerns about their future direction under the ownership of Textor.

The appeal process will be crucial for Lyon as they seek to overturn the relegation decision and restore their status in Ligue 1, with the football community closely monitoring the developments. If the appeal fails, the club will be replaced in Ligue 1 by Reims, who were relegated after losing in the play-off.