Crystal Palace’s hopes of competing in next season’s UEFA Europa League have been significantly strengthened following the dramatic relegation of French club Lyon to Ligue 2 amid ongoing financial troubles.

The Ligue 1 giants, who finished sixth last season to qualify for European competition, have been provisionally demoted after failing to satisfy the financial requirements set by the French football governing body, the LFP. The decision, which is open to appeal, stems from a long-standing financial crisis, despite efforts to stabilise the club’s accounts.

The situation has direct implications for Palace, whose European ambitions were under threat due to UEFA’s multi-club ownership rules. Previously, doubts had been raised over whether the South London side would be permitted to participate in the Europa League, having qualified through their FA Cup campaign, while Lyon had also secured a place in the same competition.

Multi-Club Ownership Concerns and Textor’s Role
At the centre of the issue is US businessman John Textor, who owned around 43% of Crystal Palace through his Eagle Football Group, and is also the majority shareholder at Lyon. Under UEFA regulations, two clubs under the same ownership cannot both compete in the same European competition, unless compliance measures are taken to ensure independence.

To resolve the matter, Textor sold his stake in Crystal Palace to New York Jets owner Woody Johnson in a deal worth approximately £190 million. The sale, subject to Premier League approval, is viewed as a crucial step in removing any potential regulatory obstacles.

Textor also offloaded his shares in the Lyon women’s team in an attempt to satisfy financial regulators in France, but the LFP deemed the measures insufficient, resulting in Lyon’s provisional demotion.

Crystal Palace have insisted throughout that they share no facilities, players, or operational resources with Lyon, a point that may weigh heavily in their favour during UEFA’s ongoing review.

Implications for Palace and Lyon
UEFA’s rules state that in cases involving multi-club ownership, precedence is given to the club that finishes higher in their domestic league. With Lyon’s relegation, that point may now be moot — and Palace’s path to Europe looks increasingly likely to be clear.

The European football governing body has yet to make an official statement, but a decision is expected by the end of the month. Sources close to UEFA in Switzerland have reportedly acknowledged the recent developments as potentially decisive.

The new ownership arrangement at Palace is expected to mirror the previous structure: although Johnson will own 43% of the club, his voting rights will remain limited to 25%, shared with club chairman Steve Parish and fellow American investors Josh Harris and David Blitzer. Blitzer’s interest in Danish club Brøndby was another consideration, particularly if Palace had been pushed down into the Europa Conference League, but appears unlikely to cause further complications.

Lyon’s Fall and Premier League Connections
Lyon, seven-time French champions and former UEFA contenders, are now facing a future in Ligue 2 for the first time since their rise to dominance in the early 2000s. Their last domestic title came in 2008, capping off an era of seven consecutive league triumphs.

The club reported debts exceeding €500 million (£418 million) last year, and despite Textor’s assertion that the financial picture had improved, the DNCG (French football’s financial watchdog) took a firm stance.

Lyon’s relegation also casts uncertainty over the futures of several former Premier League stars currently on their books, including Nemanja Matic (ex-Manchester United and Chelsea), Ainsley Maitland-Niles, and Alexandre Lacazette (both formerly of Arsenal).