Lyon provisional relegation: How did French giants with American ownership end up in financial chaos?

Olympique Lyonnais have been provisionally relegated to Ligue 2 next summer unless their finances drastically improve with a transfer ban now in place and the club’s wage bill under strict supervision by French soccer’s financial watchdog the DNCG (direction nationale du controle de gestion). The mission brief between now and the end of the current season is simple: sell as many players as possible for as much money as possible while trying to remain competitive enough to qualify for continental competition via either Ligue 1 or the Coupe de France. OL’s debts are now believed to be in excess of $530 million and Les Gones are a shadow of the great club that they once were when they flew the flag for France’s Championnat in Europe.

So, how did things get so bad?

OL’s proud history

Lyon are seven-time French champions having won Ligue 1 from 2002-08 with that septuple of successes something that even Qatar-backed Paris Saint-Germain have failed to do in almost 15 years of trying. OL also boast five Coupe de France titles and have been to two UEFA Champions League semifinals with the most recent of those coming in 2020. Les Gones translates into English as The Kids and that nickname is fitting given that Lyon for years boasted France and arguably even Europe’s strongest youth academy system with a stunning array of names coming through the ranks to complement some expertly acquired talent at senior level. Current examples of pure homegrown heroes in Pierre Sage’s current squad include Alexandre Lacazette, Corentin Tolisso, Maxence Caqueret and Rayan Cherki.

Lyon’s sharp decline

OL have not been among the frontrunners in France for many years now with two costly years out of Europe altogether between 2022’s UEFA Europa League and the present UEL campaign exacerbating what had already been a barren spell since PSG’s Qatari takeover. In fact, since Lyon’s final Ligue 1 triumph in 2008, Girondins de Bordeaux, Olympique de Marseille, Lille OSC and Montpellier HSC all won the Championnat crown so blaming Les Gones’ demise on Les Parisiens’ — as some try to do — rise is not so simple and factually inaccurate. The youth academy was previously the club’s strength but its role in helping to offset the years that followed such an unprecedented period of domestic hegemony saw that talent pipeline essentially become OL’s means to survive in the modern game with players sold at increasingly young ages before they can even truly impact the first team which was always a key feature of the Lyon setup.

OL’s diminished transfer clout

Previously a model club in terms of smart soccer business, Lyon fell asleep at the wheel while at the summit of European transfer dealings and spent big in a bid to bridge the gap on increased domestic competition around the time that Qatar entered the scene with PSG. This had a crippling impact on Les Gones who have for years been targeted by comparably smaller clubs in more affluent circumstances from leagues such as the Premier League to pick off the best talents at fairly affordable rates — Chelsea’s signing of Malo Gusto is the perfect example of this. OL’s last example of truly successful links with South America which was previously another source of successful business was arguably Newcastle United’s Bruno Guimaraes. Thiago Almada’s proposed arrival via Eagle Football Group-owned Botafogo is now in major financial doubt and of dubious origin.

French soccer’s economic realities

Another brutal reality for Lyon and all other professional French soccer clubs is that Ligue 1 has suffered a sharp and alarming fall from grace. Le Championnat has been devastated by a succession of failed or diminished television rights deals with bad blood between traditional broadcaster Canal+ and the LFP (Professional Football League). This deterioration occurred at the worst possible time as COVID-19 hit and even PSG with Kylian Mbappe, Neymar and Lionel Messi struggled to keep French soccer in the traditional top five as results on the continent had also suffered. The LFP as well as many club owners past and present are guilty of horrible mismanagement who simply have not understood what it takes to modernize and grow not only Ligue 1 but also its clubs and most crucially its finances. That Ligue 1 is showing well in UEFA competitions right now is one of very few positives along with the constant supply of top-quality talent which is doing some majorly heavy lifting with big guns PSG underperforming.

Jean-Michel Aulas

OL’s former owner of almost 40 years was Jean-Michel Aulas and although he deserves immense credit for building Lyon into the power that they were, he also must bear some responsibility for allowing complacency to set in before the overdue sale of the club to John Textor. The Frenchman is now distancing himself from a comeback and focusing on women’s soccer which he has always championed. Under Aulas, OL’s women turned into a force that superseded even the men’s team over time in terms of domestic and certainly continental success yet was one of the first assets that Textor sought to sell off upon arrival. Aulas built Lyon into something great and meaningful beyond France’s borders but also arguably outstayed his welcome when a younger approach could have made a difference and sustained Les Gones to avoid this heartbreaking current scenario.

John Textor

The arrival of the American owner and his Eagle Football Group in 2022 with an initial minority which later grew into a majority and led to a bitter and damaging spat between Textor and Aulas before the Frenchman bid a tearful farewell has coincided with massive financial problems. It cannot be disputed that Lyon were in a bad way when the deal got done as precious few — if any — French clubs could boast respectable finances then and certainly cannot right now. Textor’s plan to save his OL investment appears to be to sell his 45% stake in Crystal Palace and other players from the Eagle Football Group portfolio clubs such as Botafogo and RWD Molenbeek to bring much-needed funds. 

So, what happens if that Palace stake, which is a minority stake and therefore less appealing, does not get sold soon? The American claimed that the DNCG meeting went well only for the body itself to undermine him just hours later and a hastily arranged press conference the next morning did exactly assuage fears. It was not allowed to be broadcast as it happened which is most likely due to having already embarrassed himself publicly getting numbers wrong when doing something similar a few months ago. Based on what was spoken about in that press conference, the plan appears to be to sell around six players yet Lyon’s attempts to sell last summer already failed with several players having moves brutally forced upon them and the blamed for the club’s finances if they did not agree to go. Rayan Cherki will remain the main name but expect to read much about Malick Fofana and Maxence Caqueret too.

Are OL too big to fail?

No, they are not. Just ask six-time champions Bordeaux who are now in France’s semi-professional fourth tier having lost their professional status, or even 10-time French kings AS Saint-Etienne who were in major difficult before the arrival this summer of Kilmer Sports Ventures which saved them from potential financial collapse like Bordeaux but also two-time winners and youth development powerhouse FC Sochaux Montbeliard in the past few years. Textor can bleat about French soccer and his own conspiracy theories as much as he likes, but an undeniable truth is that he did not — and still does not — understand what he was getting himself into. The major question now is if one of the great monuments of French soccer will be made to pay for his being in charge at an absolutely critical moment in the club’s long and storied history.