French giants Lyon relegated to Ligue 2 over financial issues

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Seven-time French champions Lyon, owned by American businessman John Textor, have been relegated to the second tier of French football due to the club's financial problems, the French Professional League announced (LFP) announced on Tuesday.

Lyon plan to appeal the decision, sources told ESPN.

Textor and Mickael Gerlinger, the club's director of football, were interviewed by The National Directorate of Management Control (DNCG), the French financial regulators in charge of keeping checks on all professional clubs' accounts and financial health.

In November, the DNCG provisionally relegated Lyon because of a €175 million ($203.34 million) debt and no clear plan from the club on how to reduce it. A transfer ban was also imposed in the January transfer window.

Textor's proposal to transfer funds from Botafogo, another club he owns in Brazil, to Lyon in order to cover the debts was denied.

However, Lyon bosses were confident on Tuesday that they would be able to satisfactorily answer all questions and provide reasons why they should not be relegated to Ligue 2.

Lyon owner John Textor failed to persuade French authorities not to punish the club with relegation to Ligue 2. Eurasia Sport Images/Getty Images

Earlier this month they raised €42.5 million from the transfer of Rayan Cherki to Manchester City.

And on Monday, Premier League side Crystal Palace announced that New York Jets owner Woody Johnson signed "a legally binding contract" to buy Textor's shares. Textor sold his 43% stake in the London club for $254 million.

But the club has been under growing pressure.

Two years ago, the DNCG decided to monitor the club's transfer activities, saying its moves on the market would be limited under "a framework for wage costs and transfer indemnities."

Lyon won their seven league titles from 2002-08 and reached the Champions League semifinals in 2020.

Lyon narrowly lost to Manchester United in the Europa League quarterfinals and missed out on a cash windfall when they failed to qualify for next season's Champions League after finishing sixth in Ligue 1.

Information from The Associated Press was used in this report.

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