French giants Lyon have confirmed they will appeal against the “incomprehensible” decision to relegate them to Ligue 2 after failing to convince authorities they have resolved their financial difficulties.

The seven-time French champions were hit with a provisional relegation back in November after racking up massive debts, and although they have since sold a number of first-team players, French football watchdog the National Directorate of Management Control (DNCG) upheld the relegation following meetings on Tuesday.

Lyon are owned by John Textor, and the decision to relegate them comes a day after the American businessman sold his stake in Crystal Palace to New York Jets owner Woody Johnson.

The implications of this on Lyon’s Europa League place and any further implications for Crystal Palace’s place are currently unknown.

A verdict on whether Lyon meet financial rules from the UEFA Club Financial Control Body (CFCB) is still pending.

UEFA did not comment when contacted by Sky Sports News.

Lyon, who finished sixth in Ligue 1 last season, said in a statement: “Olympique Lyonnais acknowledges the incomprehensible decision handed down by the DNCG this evening and confirms that it will immediately appeal.

“Over the past few months, we have worked closely with the DNCG, meeting all of its demands with equity investments in excess of the amounts requested. Thanks to equity contributions from our shareholders and the sale of Crystal Palace, our cash position has improved significantly, and we have more than sufficient resources for the 2025/26 season.

“With proven funds and sporting success that has earned us a place in European competition two years in a row, we sincerely do not understand how an administrative decision could have relegated such a major French club. We will appeal to demonstrate our ability to provide the necessary financial resources to ensure OL’s continued presence in Ligue 1.”

Textor told L’Equipe last week he was confident Lyon’s financial position had been resolved, having said back in November there was “no chance” the club would be relegated.

After receiving the provisional relegation last year, Lyon sold the likes of Said Benrahma, Anthony Lopes and Maxence Caqueret in January, and this summer they have already sold Rayan Cherki to Manchester City in a £34m deal.

Lyon winger Malick Fofana is a Chelsea target this summer after the Blues made an enquiry for the Belgium international.

Meanwhile, Sky Sports News has reported Lyon have been interested in signing Nottingham Forest pair Matt Turner and Danilo.

Textor sells Palace stake

Lyon’s demotion comes after Textor’s shares in Crystal Palace threatened to be an obstacle to the Eagles’ participation in the Europa League next season because he owns Lyon, who are set to enter the same competition.

Under UEFA’s multi-club ownership rules, it looked as though Palace could miss out.

However, Textor’s 43 per cent stake in the London club has now been sold to Johnson in a deal worth more than £190m and values Palace at more than £400m.

The sale is subject to Premier League and WSL approval, but may now free Palace up to play in the Europa League.

The Eagles qualified for the competition thanks to their FA Cup final victory over Manchester City.

A decision is expected within days that Palace will take their place in Europa League for first time in their history with the draw in August.

Textor, who through his Eagle Football Holdings group also owns a significant stake in Botafogo, who are the current Brazilian and South American champions, initially invested in Palace in 2021.