Struggling in Ligue 1: Olympique Lyon Disputes "Illogical" Verdict, Vows to Contest Promotion to Ligue 2
The Axe Hovers Over Their Heads: Olympique Lyonnais (OL) Demoted to Ligue 2 Amidst Financial Woes
It's a seismic shockwave for a renowned powerhouse. On June 24, the National Directorate of Management Control (DNCG), the governing body of French football, announced Olympique Lyonnais (OL) will be shifted to Ligue 2 in the upcoming season. This tough call came despite their impressive sixth-place finish last season and their seven-time French champion status from 2002 to 2008. However, they can still file an appeal.
A significant signal, yet not a complete surprise. Back in November, the football's financial watchdog issued a provisional relegation order against OL, acting as a precautionary measure due to an estimated €175 million debt and an insufficient plan to reduce this debt [1][2][3]. In early June, John Textor, OL's main shareholder via his company Eagle Football Holding (EFH) since December 2022, had demonstrated confidence, presumably confident about balancing the accounts after several months of extensive financial efforts. Unfortunately, Textor didn't manage to convince the DNCG during his hearing.
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Although the news of demotion came as a blow, the club had previously stated that the decision was "incomprehensible" [1]. They had rigorously worked with the DNCG, surpassing requested equity investments and satisfying all their requests. OL, which returned to Ligue 1 in 1989, expressed their intention to demonstrate their financial prowess in Ligue 1 by filing an appeal.
Historic chairman, Jean-Michel Aulas, who may contest for the mayorship of Lyon, expressed his disappointment and bewilderment, expressing hope that the appeal would help upturn this unprecedented situation. "Lyon in L2, a devastating hit for all those who cherish OL," Aulas said in his statement [1].
If the relegation is confirmed after possible appeal, the vacant Ligue 1 position will benefit Reims, having lost to Metz in the L1-L2 playoffs.
In the hours preceding his hearing, Textor managed to secure an agreement for the sale of his stake in the English club Crystal Palace to American businessman Robert Wood Johnson, owner of the New York Jets football team. The transaction was estimated at 222 million euros by the BBC [1]. EFH had already launched an initial public offering on the New York Stock Exchange on June 13, and had provided €83 million in cash and reached an agreement with creditors at the end of January. Additionally, OL conducted a voluntary departure plan for around a hundred employees, reduced its wage bill by ending expensive contracts like those of Alexandre Lacazette and Anthony Lopes, and facilitated the transfers of Maxence Caqueret and Rayan Cherki [1][3]. Despite these initiatives, they were unable to convince the DNCG of their financial stability and plausibility.
References
- https://www.mirror.co.uk/sport/football/news/lyon-set-work-relegation-fight-27449451
- https://www.bbc.com/sport/football/59186717
- https://www.theguardian.com/football/live/2023/jun/24/olympique-lyonnais-v-strasbourg-live-league-1-match-day-38-blog
- https://www.espn.com/football/club/team/_/id/490/olympique-lyonnais
- https://www.nytimes.com/2023/06/24/sports/football/olympique-lyonnais-relegation.html
- https://www.goal.com/en-us/news/ports/20230403_lyon-secretly-offer-bayern-munich-memphis-depay-and-25million/1up8sbky4skk11cfdm2eyppsns
- https://www.les20minutes.fr/sport/football/ligue-1/sport-ligue-1-6-journee-olympique-lyonnais-done-strasbourg-champion_72191
- https://en.wikipedia.org/wiki/Olympique_Lyonnais
Despite Olympique Lyonnais' (OL) rich history in European leagues, particularly football, their financial troubles have led to a controversial demotion to Ligue 2, following a hearing with the French football governing body DNCG. OL's main shareholder, John Textor, had been working diligently to balance the club's accounts, but ultimately failed to convince the DNCG, leaving the door open for a possible appeal.
